Running a restaurant, hotel or any other facility in the field of hospitality business means that you need to have control over a substantial sum of money and plan it right. Not always you will have enough money to cover all the expenses and pay the whole personnel, so you as a financial manager must think of a way on how to find money for unexpected situations.
In fact, the financial matters should be foreseen well before starting the business, which means that you need to have a plan A and plan B for any unwanted outcomes. To help you out with your planning, here are several ways to find money for your hospitality business which you can later include in the investor pitch deck.
Several Ways to Find Money to Fund Your Hospitality Business
Crowdfunding is a popular way to collect money from different investors around the world with an exclusive benefit to not rely only on one investor. This method to find money connects you with investors who are willing to invest in your business, under their conditions and the amount of money. It is a rather fast way of raising funds and more and more people are using it.
Angel investors are experts that share their experience and knowledge with you and help you achieve success with finances and any other segment in running the business.
Usually, they want a stake in the company, but the fact that they have a lot of money to give you so it is up to you to determine whether giving them a percentage of your company will be worth it. Also, you can more easily persuade them than venture capitalists on business ideas.
Government programs are always a good idea to follow to find money when it comes to financing your hospitality business because they usually consist of grants that will cover plenty of your financial problems.
One disadvantage though is the fact that the application process is rather long and arduous and it can be quite stressful if the deadline to cover the expenses is closing in. On the other hand, it is a very reliable and secure amount of money that you can count on if you qualify.
Secured or Unsecured Loans
The secured loans will grant you low-interest rates but you will have to secure the loan against a business asset. This means that you will need to have a valuable asset that can be secured in the first place. On the other hand, there is the possibility of unsecured loans which are riskier.
Even though you will find money faster because you will have to take on higher interest rates. The reason for this is because you are not giving anything up as assurance, so you will also need a personal guarantee and having an excellent credit rating.
Entrepreneur Funding Contests
Lats, but not least, is the opportunity the entrepreneur funding contests give every business manager. You can apply for such a contest and follow the rules and terms to win money. They take place often and most of them are international, so it wouldn’t be a problem to apply for one even if you are from another country.
The Bottom Line
Preparing an investor pitch deck and raising funds for your hospitality business can be a very stressful process, especially if your budget is small. In such cases, it is recommended to consult an expert with experience in hospitality consulting.
They will tell you how to explore your options and will help you with the investor pitch deck. You can also, research the net and find possible solutions and read about different experiences with different methods of raising money and decide which one will work best for you.
The only thing that you should remember is that you need to go through every idea, plan, or concept thoroughly and analyze it in detail so you can be sure that the method you choose is the right one for your business.
This should be done at the beginning stage of the process of opening a hospitality business because to find money to finance your project matters out along the way is never a good idea.