| Oct. 20 2008 at 11:58 AM |
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Hello I am trying to start a gourmet café and I have already been scammed by a so called angel investor. Money that I have saved and asked family and friend to let me borrow. And I have nothing to show for it just a hard lesson. I have picked myself up again and I am more determined this time to try to find an investor that can and is willing to help me get this company up and running. I have gone to findthatmoney.com but I cant afford the fees as well as gobignetwork.com. Does anyone know where I might be able to go to find a company that invests in café funding? That are free of course. Any and all advice welcomed.
Thank you
Faye
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| Oct. 24 2008 at 12:22 PM |
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Hi Faye. I hate to be the bearer of bad news, but starting a business without any liquid funds being contributed by the entrepreneur, will hardly have any chance of becoming a reality.
Let’s just be realistic for a moment, most business proposals that require support from investors aren’t that unique at all. With other words, what is it that you offer that an investor couldn’t do without you? Why do you think an investor will assume the risk of going into business with you if you don’t have any skin in it?
I know this sounds harsh, but that’s the reality.
If you think you got scammed by a pseudo angle investor or predatory website, think about making a stand. Send them a formal demand letter demanding your money back, hinting that you are tempted to take your case to the State Attorney’s Office, may just do the trick.
I hope this helps.
Mark
Nothing is as powerful as an idea whose time has come.
http://www.FastVentures.com
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| Dec. 18 2008 at 2:55 PM |
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I just posted a blog on www.mrfranchiseman.com regarding the current state of financing sources for new businesses and franchises-14 changes. Not wishing to repeat it here, the gist is this: better have airtight credit scores, no blemishes, another source of income and good cash flows projected.
mrfranchiseman.com
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| Dec. 19 2008 at 2:37 AM |
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FKing wrote:
Hello I am trying to start a gourmet café and I have already been scammed by a so called angel investor. Money that I have saved and asked family and friend to let me borrow. And I have nothing to show for it just a hard lesson. I have picked myself up again and I am more determined this time to try to find an investor that can and is willing to help me get this company up and running.
Thank you Faye
Hello Faye,
Unless you have quite a bit of business experience and very good personal credit, you'll find it very hard to finance a startup business. Many lenders consider startups as high risk because many business startups failed within two years, way before the loan would be paid off. You can go to your local banks and lending institutions and see what they offer but they would require you to have a sound business plan, financial statements and income tax records. If you haven't started your business yet, going to the banks won't give you encouraging results, I think.
You might want to read How To Finance A Business Startup for other options.
Small businesses for sale | Buy a small business | Selling a business
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| Dec. 23 2008 at 9:35 PM |
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Hi Faye,
I don't want to add place another straw on that proverbial camel's back, so I'll just say I agree with all the above. I just found a straw; if the business is a new business, it is bad enough. If it is the food service industry (restaurant or catering), forget it, unless of course you have sufficient collateralized assets.
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| Dec. 23 2008 at 9:37 PM |
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Hi Faye,
I don't want to add place another straw on that proverbial camel's
back, so I'll just say I agree with all the above. I just found a
straw; if the business is a new business, it is bad enough. If it is
the food service industry (restaurant or catering), forget it, unless
of course you have sufficient collateralized assets.
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| Jan. 02 2009 at 3:04 PM |
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Mark and Matt are absolutely correct. You are not going to find an investor (much less a commercial loan) for a start up cafe. Even in the best of economic times you would not be able to find easy funding. Today? Forget about it. That's where we are folks.
If you want to open a gourmet cafe you will probably need to start slowly and it will probably take a few years of hard work and savings.
Let's say the economy miraculously turns around and banks start financing loans again...you will still need to have perfect credit, major collateral, 20% of the cash needs on hand (your own money), plus industry experience.
The best thing to do would be to get a job at a similar cafe so you can satisfy the industry experience requirement (if you don't already have it). And scrimp and save to get the 20% cash. Write a kick *&% business plan, then approach friends/family and banks. All of that is easier said than done and will take at least a couple of years. So, reasses your needs and adjust your dream as needed. You can do it, but it won't be easy.
Sylvia
SmallBusinessStartup.BIZ
Biz Startup & Biz Plan Help
BLOG for PRENEURAHOLICS!
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| Jan. 02 2009 at 3:54 PM |
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You may also want to consider buying an existing Cafe with a high amount of seller financing. I have always endorsed the idea of working in one first to get your feet wet and obtaining valuable experience, before committing the next 5-10 years of your life to it.
The final Deal structure is very important too. There are plenty of sellers today and there will be more in 2009 as the retail implosion makes its way across USA. It is a buyer's market and financing is short so you have to be Creative
mrfranchisman.com
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