Financiers consider the restaurant industry as novel investment interest. Assuming that you have weighed your restaurant startup options, we suggest you approach investors with your idea of a new business. The ideal investor should be passionate about the restaurant industry, meaning that they know what questions to ask regarding your business. Always keep in mind that investors have high expectations and if you are not prepared for the possible queries, getting the funding for your venture may be quite a task.
The next step is to create a list of all the ways in which you want to scale your business after launching it. If your restaurant is a quick service, include food trucks that focus on serving specialty items. Any investor would want to know all your growth plans for the long-term as it exhibits bigger potential returns on their investment.
You may be looking for active investors whose industry expertise you can put to use. Sell them the fact that they too can work with you. Here again, you have to create a list of the positive things your business can enjoy if the investor becomes a part of your company. This clarifies to them that you are also open to a partnership. When a deal is signed and all agreements are made, investors want your business to succeed as that means more returns for them. Near-term benefits are preferred compared to long terms from their side and should be on the safer side as well. Hence, they are eager to know if they can jump in and lend a helping hand to fetch more profits.
Most owners of restaurants offer promotional perks and discounts on meals to their investors as incentives. Make a list of all the facilities you would like to provide investors for mixing some sweetness to the deal. Keep this idea hidden when your pitch meeting is going on and reveal it when you see the investors agreeing to your earlier ideas.
Making a good first impression is important to take the thing forward.
Since you are not writing an informal letter, write a brief email to the investor, introducing yourself, the type of business and why you wish to meet with them. Remember, share only those points that arouse their interest as they hardly have time to read a long email.
If you simply ask the investor to meet you, he will not take you seriously. Let him know a suitable time when you would want to meet. You can come up with two or three time slabs and tell the investor that you are free to meet him at a time appropriate to them.
Attach your pitch deck’s copy to the mail as a pdf file and avoid using a Dropbox download as this is going to develop an unwanted hurdle that the investor would better avoid in his busy schedule.
Now that you have scored an investor meeting, ponder over how to present the best pitch in life. Consider it to be a matter of life and death and do the following.
Defining Investor Benefits
Before you start crafting your pitch deck, you have to define how investors can benefit from investing in your venture. With strong benefits, you can achieve the ultimate objective: persuade investors that your business is worth their investment. Read on to know how you can attract a potential investor. Preparing a pitch for investors involves a lot of time and thinking. Your actual pitch deck may be written from certain parts of your business plan, you need to check your financials very carefully for preparing the answers you will face. Take a note of the things you wish to offer investors.- The percentage of ownership you want to give investors.
- The worth of your business in the current period.
- The perks and discounts you are ready to offer the investors.
- Your long-term goals
- What will you do to heighten your business?
Rate of return
When the gain or loss on an investment made over a particular time-period is shown as a percentage of the cost of investment, it is called the rate of return. Equity investors can be specifically interested in their “return on equity”. This is the income they will earn as a percentage of their equity provided to your business. An investor finally wants to know the amount of money they will make from investing in your business. At first, think about the worth of your ownership. You can calculate this number by dividing the amount of investment by the value of your restaurant. For instance, a $25,000 investment purchases 50% of a restaurant worth $50,000. You need to have an approximate idea about what these figures are for your restaurant. This assists you to know how much of your business you can offer in exchange for your capital.
