Marlborough Leisure

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The Problem:

 I have had a restaurant for two years now and it is trading well, what are my options for funding a second site?

Expert Advice:

First of all, I will assume that you are able to demonstrate the profitability of your existing restaurant with good quality, professionally prepared accounts.  This is essential – banks and other investors rely heavily upon such evidence.

The first question that you must now consider is whether your existing venue can be properly managed in your absence.  One thing that is for sure (as you will probably remember from the first time out) is that setting up a new restaurant demands an enormous amount of your time and energy, during which you will inevitably pay less attention to the day to day management of your established business.  Do you have reliable managers, kitchen staff and operating systems in place that will permit you to concentrate on other matters with the confidence that business will continue as normal?  If the answer to this question is no, you are probably not ready to take the leap into multiple ownership! 

Setting a budget for your next project is not always straightforward.   There is no fixed formula dictating the ratios applicable to this part of the exercise, as they will be influenced by many factors, including your existing level of borrowing, the security that you are able to offer a lender and/or the portion of your business that you are willing to “sell” to outside investors (sometimes an alternative to investing your own cash!).  However, if you have built a profitable business (and retained some of the profit) and have established a management infrastructure that will allow you to effectively concentrate on the next project, there is almost certainly a means by which you can raise the necessary finance.  At this stage you should discuss your ideas with your accountant, bank manager or specialist broker such as Marlborough Leisure, all of whom should be able to provide further impartial guidance.”



Don’t lose control of your existing business, that’s what put you in this position and be careful standards don’t slip whilst you chase the dream of a second venue

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