How To Open A Restaurant With NO Money? | Small Business Advice Restaurant Funding 2020


Hey, guys. My name is Wilson. Today, we’re going to be talking about, how
do you start a restaurant with $0? Big, fat $0. A lot of you guys have been messaging me about,
“Hey, you know what? I have this brilliant idea. I have grandma’s recipe. I’m in this really, really good area and community,
which I want to be able to open up a restaurant. But, the biggest thing is that I don’t have
the capital and the investment.” When I first started off, I didn’t have the
capital, either. However, I was actually able to save up from
other businesses, which allowed me to diversify and invest in this business. I know some of you are not in that position,
which is the reason why I’m shooting this video with you, to share with you the four
secrets on, how do you actually raise capital in order to run your own restaurant, in order
for you to be able to bring that recipe to life, and in order for you to be able to create
something that you’re so excited in building. If you guys do stay until the end, I’m going
to share a story with you on how we were actually able to raise $200,000 Canadian from my ice
cream shop business. So, make sure you guys stay until the end. Otherwise, we’re going to dive right in. The number one way to raise capital, easiest
way out there, is through friends and family. Now, I’m going to explain to you the pros
and cons of raising capital through your friends and family to run your restaurant business. The pros of that is that it’s the easiest
to get the money. You don’t need to show them a proof of concept. You don’t need to show them a pitch deck. You don’t need to show them too, too much
things. The only reason why they’re investing is in
you. Okay? As much as they want to say that they want
to check out the location, they want to check out the product that you are serving, they
want to check out your business plan, all those honestly is irrelevant because at the
end of the day, if they’re looking for a business opportunity, they would be investing in you. Okay? It’s just simply put. Let’s just put it out there, guys. It is because they love you, they trust you,
and they want to support your dreams in building a food and beverage restaurant. That’s the reason why it’s going to be the
easiest way to raise capital, and that’s the number one pro of raising capital through
your friends and family. On the flip side of raising capital through
your friends and family is that you’re going to be under a lot of pressure. You’re going to be risking the relationship
of you and your family, you and your friends. That is a really, really big risk that you’re
taking on, because if the business is successful, great. Everyone is happy. Okay? You’re making money for your friends. You’re making money for your family. And on top of that, you’re able to bring your
vision to the world. Now, on the other hand, if your business is
not successful, then technically speaking, you’ve just lost a friend. You’ve just lost a family member. You need to understand and weigh the risks
of this, because there are so many of my friends that I see that when they take on different
projects and raise money through different… of their families and their friends, they
have lost their friends. They have lost their family. They get into arguments because they didn’t
set the right expectation. So, having said that, if you are to be willing
to raise money through your friends and family, do make sure to make sure that you set the
right expectation. Let them know the duration of how long this
investment is going to be. Second of all, let them know that 80% of the
time, if not 90% of the time, they need to understand that the money that they’re investing
in you is at risk of being completely gone and that you are going to try your very best
in order for you to help them grow the money, but there’s no guarantee and that they should
have that expectation of, this is a high-risk investment. Okay? When you’re able to set that expectation,
hopefully you can actually keep this relationship intact. That’s the number one way to raise money for
your restaurant if you have no money. Raising money through your friends and family
is one way that I highly, highly would not recommend to any of you guys. However, there’s a lot of people that do that. I, personally, value my relationships much,
much, much more than running a business, which is the reason why I would never, ever ask
my friends and family for money, and I would highly recommend you not do the same, as well,
because at the end of the day, what good does it bring when you have a successful business
when you don’t have your friends or family to share that happiness with? What good does that bring? For me, it doesn’t mean anything. I’ve seen too many sad stories of how entrepreneurs
and people have lost their friends and family through business, and it’s just a really,
really sucky feeling, which I don’t really want to go through, which is a reason why
I do not recommend it, even though this is the easiest way for you to get money. The second easiest way to raise money for
your restaurant if you have $0 is through governments, banks, grants, loans, and all
this sort. The pros of that is that it’s much, much more
easier to deal with than your friends, your family, or your grandma, because during Christmastime,
your banker is not going to be there asking you about, “Hey, how’s the restaurant coming
along?” And give you pressure. The cons and the flip side of raising money
through banks, governments, and loans is the fact that it may be a lot more paperwork. You need to be able to prove your concept. You need to have different collateral to make
sure that the bank has something in their hands in order for them to lend you the money,
right? At the end of the day, you may need a guarantor
who is going to sign on your behalf, so then that way, if you do lose all your money, there
is someone to guarantee that you will pay back that money. Right? On top of that, it’s much, much more strict
process or a longer process for you to be able to get the money because you’re going
to have to write a legitimate business plan, you’re going to have to write a forecast for
your business, and you’re going to have to actually prove the concept to your banker
and convince them or their agencies that this business is viable, that the recipe that you
have in mind is going to be exceptional when it comes to the competition, which is, a lot
of times, a lot more difficult than raising money through your friends and family. But, this is something that I highly recommend
if you are short on cash, because you are not going to have to deal with the stress
of dealing with your friends and your family. For different cities, different countries,
there are different agencies, different banks. They all have different roles, which is a
reason why I can’t give you one straight answer of who to go to. It really comes back down to your city that
you’re in and the country that you’re in. I’ll give you an example of how we have done
it in Vancouver, BC Canada, is that we actually raise our money through the Bank Development
of Canada, and they’re very, very lenient with their process of lending money because
this bank is actually backed by Canada. Oftentimes, they lend up to 90% of what you’re
asking for. For us, when we’re borrowing money, we’re
able to actually borrow up to $100,000 with zero collateral because this bank of them,
they have much more higher risk tolerance for small businesses, because this bank is
made to provide funding for small businesses. In your specific area, Google and actually
try to find out and do research on specific associations, specific banks, specific programs
that actually support small businesses, and you’re going to be able to find one that is
relevant in your specific area. The third way to open up your restaurant with
$0 is to find a partner. Okay? What I mean by that is, if you only have $50,000,
you need to be able to raise the other $50,000, and you don’t want to go through friends,
you don’t want to go through with family, you don’t want to go through governments,
then you can actually bring on a partner who can fill that $50,000 pot for you. That way, you can actually work with someone
that can actually grow the business with you. Aside from the cash injection that your partner
brings, they can potentially also be a good partner that you can actually bounce ideas
off with. They can actually take on different types
of operation within your business. For example, you have to deal with marketing,
finance, logistics, front of the house, back of the house, HR, all this crazy stuff, and
it’s a lot of work when it down to it, which is the reason why finding a good partner who
can actually bring value to the table is so, so, so important when it is about choosing
the right partner. That is something that is a really major advantage
of finding the right one. Now on the flip side, we always, always hear
crazy stories about how partners are running away with the money. Partners are not doing anything. Partners are suing each other. All these crazy things are what you would
be expecting if you find the wrong partner, and that’s the risk about bringing in someone
that you’re working with. That’s the reason why in this video, we talk
about, how do you find a partner that you can actually work with in building your business? Now, out of the three different options that
I’ve mentioned, friends and family, banks, loans, all these different places and through
partners, I think finding a good partner and finding a suitable partner is something that
I, personally, would choose. Now, this is a really, really tricky situation
because it really comes back down to your alignment, in terms of culture, in terms of
vision, how you guys do things. Right? We talk about the vision of the work. What is he going to do, and what are you going
to be doing, and is he okay with you taking on, let’s say, marketing while he’s taking
on the finances? Right? So, how do you guys divide up the work, which
both of you guys are happy. Now, if you’re able to find that sweet medium,
this equilibrium, that that means you’re going to have an exceptional relationship with your
business partners. Okay? In this video, we talk about exactly how you
find that partner that’s going to be able to help you build this dream restaurant of
yours, and that’s what we’re able to do with 720 Sweets. My partner, Brian, this is his face, so check
him out, super, super amazing guy. He does all the operations while I take care
of the vision. He just puts in 120%. Throughout the last five years of us partnering
up, I can’t thank him enough for pulling in all his weight, and also, we may have arguments,
but we always, always know it’s because we’re arguing for the sake of the betterment of
the company. It was never personal. He always is putting in 120%. You know what? I can’t say any more good things about this
guy, because without him, we wouldn’t have 720 Sweets, and let’s just put it that way. Right? So for me, I got really lucky, but it was
also very strategic when I brought in Brian. It was also a lot of hard conversations that
we had in the beginning to set the right expectations so he knows what to expect from a partner
like me, and I know what to expect from a partner like him. That’s how beautiful dream team is being built. The fourth way to open up your restaurant
with $0 is to find angel investors. So many people have actually messaged me and
asking me, “How do I find investors, and how do I find angels invest in them?” I just find this question really, really dumb
and really stupid. It is because, why would anyone, okay, with
the right mindset would invest in you? You just don’t ask that question. Why would anyone who has the money, okay,
invest in you? What makes you different? Why is it that I’m risking 100, 200, 300,
half a million dollars on you? Why do I have to do that? What makes you special? A lot of people think that investors and angels
are dumb people who just happen to have money that would invest in anything and everything,
and that is precisely wrong. Okay? People who have money, they got their for
a reason. It is because they are able to actually do
the research. They’re able to actually be in the trenches. They know a lot more about business. This is actually the most difficult place
for you to be looking at investment from, because angels investors, they invest in things
that they think and see opportunity in. So, when it comes down to it, when you’re
asking yourself, hey, I want to raise money through angels investors. Ask yourself that one question. What makes you different? Simple as that. The pros of raising money through angels investors
is the fact that these guys have tons of money and are willing to be able to invest in you. You don’t need to see them for Christmas. You don’t need to see them during your off
time. So then that way, you’re still going to have
a good relationship with your friends and your family. Now on the flip side, they are much, much,
much more different to align because they would always ask, why you? Make sure you have that question answered. Make sure you’re able to actually convince
these angels investors. And on top of that, these guys, oftentimes,
would invest in people with more track record with their money. They also would invest in bigger projects. We’re talking about maybe multiple chains,
and they would also look at what you have done in the past to make sure that, hey, if
this person is telling me that they have built a 10 shop chain, and now they have a new concept,
which they want investment in, hey, you know what? Maybe this guy knows what he’s talking about,
and he just needs another extra $500K in order for them to scale to the next level. Right? Then that’s how investors and angels think
when they’re investing in food and beverage concepts like this. By far, out of four different ways to raise
money, I think this is the most difficult one, because like I said, why you? You need to answer that question in order
and be super convincing on that note in order for them to invest in you, because at the
end of the day, think about one thing. Just because you have a crazy, delicious recipe
doesn’t make you any different from the millions of chefs out there. If they really want to get into this business,
they can easily hire a chef to be able to do R&D on this recipe. They don’t need you. So, make sure you answer that question. If you have something that is so different
about you, your background, your resources, your connection, anything, you know what? Bring everything of that to the table. Then, perhaps, you would have a chance. Other than that, I would highly recommend
just sticking to the first three different options and raising funds for your food and
beverage restaurant. So, there you go, the four ways to open up
a restaurant with $0. First way, through friends and family. Okay? Second, through banks, associations, grants,
loans, whatsoever. Third, it is through partners, and fourth
and lastly, through angels and investors. These are the four ways for you to be able
to raise capital if you don’t have any to start running with your restaurant business. As I was sharing with you and as promised,
I’m going to be sharing with you a story of how we actually got $200K in investments in
720 Sweets, our ice cream shop. This actually happened three years ago when
I was actually documenting my journey and building this ice cream shop, now an international
chain for 720 Sweets. Throughout this period, we were experiencing
some cashflow problems, which is a reason why we’re like, “Hey, you know what? We’re suffering. We’re challenged, and we really need help.” One person that was actually following along
the story reached out to me and actually asked me, “Hey, you know what? What do you need help with?” We started having a conversation, and then
turnkey was actually able to see a lot of different opportunities, opportunities from
us partnering up with one of the biggest Asian supermarket in Canada, which is owned by Loblaw’s
T&T Supermarket. Okay? The second opportunity is for our expansion
into China. This was two very, very big selling points,
which at the end, through numerous conversations, we were able to raise more than $200,000 for
our project. At the end of the day, I, personally, wouldn’t
bank on this type of investment because, you know what? It’s very, very difficult to raise funds through
investors. But, nonetheless, this is the short story
of how we were able to raise $200,000 for our food and beverage restaurant and shop. If you guys liked this video, I’m sure you’re
going to find a lot more value in the link below. Check out in the link below, I actually share
with you my very beginning to where we are at right now from the A to the Z, from starting,
from negotiating free rent to choosing the perfect location to crafting the right menu,
which ensures us to have at least 20% margins to marketing tactics to diving into your customer’s
mindset and offering them something that is irresistible to all the marketing stuff that
we have been doing, everything within that link below. If you guys are interested, make sure you
guys check it out because that’s where we share all the things that I’ve been learning
throughout the last 10 years of running a business. Okay? Make sure you check out the link below. Otherwise, subscribe within this journey because
I’m going to be sharing a lot more of these videos of one-on-ones. If you guys liked this video, make sure you
guys show some support. Smash the like button. Comment in the section below of what you thought
about this video. Otherwise, I’ll see you guys in the next video.

5 Replies to “How To Open A Restaurant With NO Money? | Small Business Advice Restaurant Funding 2020”

  1. Wilson K Lee says:

    *JOIN THE SECRET RESTAURANT SUCCESS FACEBOOK CLUB* http://bit.ly/Restaurantsuccessclub

  2. Jeremy Tran says:

    One way you can open a restaurant or raise money if you're a chef wanting to open a restaurant/ test the market is using social media to your advantage and selling food from your page.
    For example, take pre-orders on Instagram stories or show what you're cooking on Instagram stories and mention how much servings you have left.
    This can be useful in many ways besides raising capital for your restaurant

  3. Volonteer Life-Style says:

    Thank you so much 😃

  4. Stranjah says:

    You're a wealth of knowledge, thank you for your content!

  5. Louie B says:

    I want to open store that sells all kinds of potato chips. And vending machine of coke to go along with that

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