Start A Restaurant With No Money

Can someone actually start a restaurant with NO money?

The answer is YES, but it's very rare. I've seen it done, and I almost did it myself.
(If I'd known I was going to write a book about the restaurant business I would have done it with no money click here to read that whole story...)

Of course, starting your restaurant with no money is NOT for everyone. If you have a specific design, location, niche and atmosphere you want to create it will be almost impossible. However, if you are flexible and open to "golden opportunities" when they arise, you might be able to start a restaurant with no money down.

To start with, you'll have to be ready to pounce when opportunities present themselves. If you credit is less than perfect there are a lost of things you can do to repair it so your prepared to go forward when the time is right.

You should study restaurant percentages and ratios and gather a real understanding of what separates the successful restaurant owners from the ones who close their doors in less than a year.

And then you must start watching and waiting for a specific opportunity.

To own a "no money down" restaurant you'll have to adjust your focus.

Let's make a comparison to the real estate market. Most first time restaurateurs want to start a restaurant the way most people look for their first house, or have a house built. They start with a list of what they want. Granite counter-tops, dual vanities, large backyard, 3 bathrooms, etc., They want to pick the location, the layout, the school district, the colors and the finishes. When you start with YOUR list, you'll pay the premium, non-discounted price.

However, some real estate investors aren't looking for a laundry list of "wants". They simply look for "what's available" that no-one else wants. Then they do an evaluation to see if they can turn a "nobody wants" to a "everybody wants" at a minimal price.

For example, you find a house that smells like cats, has pealing paint, broken kitchen cabinets and garbage everywhere. It is a large, custom built house in a nice neighborhood. When prospective buyers come to see it the smell, lack of maintenance and garbage quickly turns them around. No one puts an offer in and the price goes down and down. Eventually the buyer gives up all hope and prays for someone to offer them "anything". A savvy real estate investor can usually buy this property for "zero down" and fix the problems, put it back on the market, and make a huge profit.

Of course, if you don't know what you are doing, you can lose your shirt! You don't want to buy someone else's problem and then find out your have even more problems.

The same thing can happen in the restaurant business. Many restaurateurs want to sell their restaurant but don't get any offers. Of course, if the restaurant is packed every night and profits are spilling out of the till there's a long line of prospects who will want to buy the restaurant. These type of successful restaurants are VERY expensive.

The tired restaurant owner that is barely breaking even probably doesn't have the energy to rejuvenate their restaurant to make it easier to sell. So, their restaurant sits unsold. They are motivated vendors and would be willing to negotiate a "no money down" deal for someone to take their burden off their shoulders.

As a potential "no-money-down" buyer you need to know what you can fix, and what you can't. You don't want to end up owning someone else's problem that CAN'T be fixed. For example, if it's a terrible location there isn't much you can do to change that (unless you have access to a huge crane!) There's a long list of things you must evaluate before you decided whether to buy this restaurant, make a few changes, and start your own restaurant with no money down.

This method requires a different point of view, and the ability to make an analysis, research and make quick decisions. You have to wait for a golden opportunity to come along, evaluate it quickly, and then decide if it's right for you. If it's not right, walk away. They'll be another opportunity to buy an existing struggling restaurant and turn it around coming along very soon. This is how a few savvy restaurateurs have started their restaurants with no money.