Hey, guys.
My name is Wilson.
Today, we're going to be talking about, how do you start a restaurant with $0?
Big, fat $0.
A lot of you guys have been messaging me about, "Hey, you know what?
I have this brilliant idea.
I have grandma's recipe.
I'm in this really, really good area and community, which I want to be able to open up a restaurant.
But, the biggest thing is that I don't have the capital and the investment."
When I first started off, I didn't have the capital, either.
However, I was actually able to save up from other businesses, which allowed me to diversify
and invest in this business.
I know some of you are not in that position, which is the reason why I'm shooting this
video with you, to share with you the four secrets on, how do you actually raise capital
in order to run your own restaurant, in order for you to be able to bring that recipe to
life, and in order for you to be able to create something that you're so excited in building.
If you guys do stay until the end, I'm going to share a story with you on how we were actually
able to raise $200,000 Canadian from my ice cream shop business.
So, make sure you guys stay until the end.
Otherwise, we're going to dive right in.
The number one way to raise capital, easiest way out there, is through friends and family.
Now, I'm going to explain to you the pros and cons of raising capital through your friends
and family to run your restaurant business.
The pros of that is that it's the easiest to get the money.
You don't need to show them a proof of concept.
You don't need to show them a pitch deck.
You don't need to show them too, too much things.
The only reason why they're investing is in you.
Okay?
As much as they want to say that they want to check out the location, they want to check
out the product that you are serving, they want to check out your business plan, all
those honestly is irrelevant because at the end of the day, if they're looking for a business
opportunity, they would be investing in you.
Okay?
It's just simply put.
Let's just put it out there, guys.
It is because they love you, they trust you, and they want to support your dreams in building
a food and beverage restaurant.
That's the reason why it's going to be the easiest way to raise capital, and that's the
number one pro of raising capital through your friends and family.
On the flip side of raising capital through your friends and family is that you're going
to be under a lot of pressure.
You're going to be risking the relationship of you and your family, you and your friends.
That is a really, really big risk that you're taking on, because if the business is successful,
great.
Everyone is happy.
Okay?
You're making money for your friends.
You're making money for your family.
And on top of that, you're able to bring your vision to the world.
Now, on the other hand, if your business is not successful, then technically speaking,
you've just lost a friend.
You've just lost a family member.
You need to understand and weigh the risks of this, because there are so many of my friends
that I see that when they take on different projects and raise money through different...
of their families and their friends, they have lost their friends.
They have lost their family.
They get into arguments because they didn't set the right expectation.
So, having said that, if you are to be willing to raise money through your friends and family,
do make sure to make sure that you set the right expectation.
Let them know the duration of how long this investment is going to be.
Second of all, let them know that 80% of the time, if not 90% of the time, they need to
understand that the money that they're investing in you is at risk of being completely gone
and that you are going to try your very best in order for you to help them grow the money,
but there's no guarantee and that they should have that expectation of, this is a high-risk
investment.
Okay?
When you're able to set that expectation, hopefully you can actually keep this relationship
intact.
That's the number one way to raise money for your restaurant if you have no money.
Raising money through your friends and family is one way that I highly, highly would not
recommend to any of you guys.
However, there's a lot of people that do that.
I, personally, value my relationships much, much, much more than running a business, which
is the reason why I would never, ever ask my friends and family for money, and I would
highly recommend you not do the same, as well, because at the end of the day, what good does
it bring when you have a successful business when you don't have your friends or family
to share that happiness with?
What good does that bring?
For me, it doesn't mean anything.
I've seen too many sad stories of how entrepreneurs and people have lost their friends and family
through business, and it's just a really, really sucky feeling, which I don't really
want to go through, which is a reason why I do not recommend it, even though this is
the easiest way for you to get money.
The second easiest way to raise money for your restaurant if you have $0 is through
governments, banks, grants, loans, and all this sort.
The pros of that is that it's much, much more easier to deal with than your friends, your
family, or your grandma, because during Christmastime, your banker is not going to be there asking
you about, "Hey, how's the restaurant coming along?"
And give you pressure.
The cons and the flip side of raising money through banks, governments, and loans is the
fact that it may be a lot more paperwork.
You need to be able to prove your concept.
You need to have different collateral to make sure that the bank has something in their
hands in order for them to lend you the money, right?
At the end of the day, you may need a guarantor who is going to sign on your behalf, so then
that way, if you do lose all your money, there is someone to guarantee that you will pay
back that money.
Right?
On top of that, it's much, much more strict process or a longer process for you to be
able to get the money because you're going to have to write a legitimate business plan,
you're going to have to write a forecast for your business, and you're going to have to
actually prove the concept to your banker and convince them or their agencies that this
business is viable, that the recipe that you have in mind is going to be exceptional when
it comes to the competition, which is, a lot of times, a lot more difficult than raising
money through your friends and family.
But, this is something that I highly recommend if you are short on cash, because you are
not going to have to deal with the stress of dealing with your friends and your family.
For different cities, different countries, there are different agencies, different banks.
They all have different roles, which is a reason why I can't give you one straight answer
of who to go to.
It really comes back down to your city that you're in and the country that you're in.
I'll give you an example of how we have done it in Vancouver, BC Canada, is that we actually
raise our money through the Bank Development of Canada, and they're very, very lenient
with their process of lending money because this bank is actually backed by Canada.
Oftentimes, they lend up to 90% of what you're asking for.
For us, when we're borrowing money, we're able to actually borrow up to $100,000 with
zero collateral because this bank of them, they have much more higher risk tolerance
for small businesses, because this bank is made to provide funding for small businesses.
In your specific area, Google and actually try to find out and do research on specific
associations, specific banks, specific programs that actually support small businesses, and
you're going to be able to find one that is relevant in your specific area.
The third way to open up your restaurant with $0 is to find a partner.
Okay?
What I mean by that is, if you only have $50,000, you need to be able to raise the other $50,000,
and you don't want to go through friends, you don't want to go through with family,
you don't want to go through governments, then you can actually bring on a partner who
can fill that $50,000 pot for you.
That way, you can actually work with someone that can actually grow the business with you.
Aside from the cash injection that your partner brings, they can potentially also be a good
partner that you can actually bounce ideas off with.
They can actually take on different types of operation within your business.
For example, you have to deal with marketing, finance, logistics, front of the house, back
of the house, HR, all this crazy stuff, and it's a lot of work when it down to it, which
is the reason why finding a good partner who can actually bring value to the table is so,
so, so important when it is about choosing the right partner.
That is something that is a really major advantage of finding the right one.
Now on the flip side, we always, always hear crazy stories about how partners are running
away with the money.
Partners are not doing anything.
Partners are suing each other.
All these crazy things are what you would be expecting if you find the wrong partner,
and that's the risk about bringing in someone that you're working with.
That's the reason why in this video, we talk about, how do you find a partner that you
can actually work with in building your business?
Now, out of the three different options that I've mentioned, friends and family, banks,
loans, all these different places and through partners, I think finding a good partner and
finding a suitable partner is something that I, personally, would choose.
Now, this is a really, really tricky situation because it really comes back down to your
alignment, in terms of culture, in terms of vision, how you guys do things.
Right?
We talk about the vision of the work.
What is he going to do, and what are you going to be doing, and is he okay with you taking
on, let's say, marketing while he's taking on the finances?
Right?
So, how do you guys divide up the work, which both of you guys are happy.
Now, if you're able to find that sweet medium, this equilibrium, that that means you're going
to have an exceptional relationship with your business partners.
Okay?
In this video, we talk about exactly how you find that partner that's going to be able
to help you build this dream restaurant of yours, and that's what we're able to do with
720 Sweets.
My partner, Brian, this is his face, so check him out, super, super amazing guy.
He does all the operations while I take care of the vision.
He just puts in 120%.
Throughout the last five years of us partnering up, I can't thank him enough for pulling in
all his weight, and also, we may have arguments, but we always, always know it's because we're
arguing for the sake of the betterment of the company.
It was never personal.
He always is putting in 120%.
You know what?
I can't say any more good things about this guy, because without him, we wouldn't have
720 Sweets, and let's just put it that way.
Right?
So for me, I got really lucky, but it was also very strategic when I brought in Brian.
It was also a lot of hard conversations that we had in the beginning to set the right expectations
so he knows what to expect from a partner like me, and I know what to expect from a
partner like him.
That's how beautiful dream team is being built.
The fourth way to open up your restaurant with $0 is to find angel investors.
So many people have actually messaged me and asking me, "How do I find investors, and how
do I find angels invest in them?"
I just find this question really, really dumb and really stupid.
It is because, why would anyone, okay, with the right mindset would invest in you?
You just don't ask that question.
Why would anyone who has the money, okay, invest in you?
What makes you different?
Why is it that I'm risking 100, 200, 300, half a million dollars on you?
Why do I have to do that?
What makes you special?
A lot of people think that investors and angels are dumb people who just happen to have money
that would invest in anything and everything, and that is precisely wrong.
Okay?
People who have money, they got their for a reason.
It is because they are able to actually do the research.
They're able to actually be in the trenches.
They know a lot more about business.
This is actually the most difficult place for you to be looking at investment from,
because angels investors, they invest in things that they think and see opportunity in.
So, when it comes down to it, when you're asking yourself, hey, I want to raise money
through angels investors.
Ask yourself that one question.
What makes you different?
Simple as that.
The pros of raising money through angels investors is the fact that these guys have tons of money
and are willing to be able to invest in you.
You don't need to see them for Christmas.
You don't need to see them during your off time.
So then that way, you're still going to have a good relationship with your friends and
your family.
Now on the flip side, they are much, much, much more different to align because they
would always ask, why you?
Make sure you have that question answered.
Make sure you're able to actually convince these angels investors.
And on top of that, these guys, oftentimes, would invest in people with more track record
with their money.
They also would invest in bigger projects.
We're talking about maybe multiple chains, and they would also look at what you have
done in the past to make sure that, hey, if this person is telling me that they have built
a 10 shop chain, and now they have a new concept, which they want investment in, hey, you know
what?
Maybe this guy knows what he's talking about, and he just needs another extra $500K in order
for them to scale to the next level.
Right?
Then that's how investors and angels think when they're investing in food and beverage
concepts like this.
By far, out of four different ways to raise money, I think this is the most difficult
one, because like I said, why you?
You need to answer that question in order and be super convincing on that note in order
for them to invest in you, because at the end of the day, think about one thing.
Just because you have a crazy, delicious recipe doesn't make you any different from the millions
of chefs out there.
If they really want to get into this business, they can easily hire a chef to be able to
do R&D on this recipe.
They don't need you.
So, make sure you answer that question.
If you have something that is so different about you, your background, your resources,
your connection, anything, you know what?
Bring everything of that to the table.
Then, perhaps, you would have a chance.
Other than that, I would highly recommend just sticking to the first three different
options and raising funds for your food and beverage restaurant.
So, there you go, the four ways to open up a restaurant with $0.
First way, through friends and family.
Okay?
Second, through banks, associations, grants, loans, whatsoever.
Third, it is through partners, and fourth and lastly, through angels and investors.
These are the four ways for you to be able to raise capital if you don't have any to
start running with your restaurant business.
As I was sharing with you and as promised, I'm going to be sharing with you a story of
how we actually got $200K in investments in 720 Sweets, our ice cream shop.
This actually happened three years ago when I was actually documenting my journey and
building this ice cream shop, now an international chain for 720 Sweets.
Throughout this period, we were experiencing some cashflow problems, which is a reason
why we're like, "Hey, you know what?
We're suffering.
We're challenged, and we really need help."
One person that was actually following along the story reached out to me and actually asked
me, "Hey, you know what?
What do you need help with?"
We started having a conversation, and then turnkey was actually able to see a lot of
different opportunities, opportunities from us partnering up with one of the biggest Asian
supermarket in Canada, which is owned by Loblaw's T&T Supermarket.
Okay?
The second opportunity is for our expansion into China.
This was two very, very big selling points, which at the end, through numerous conversations,
we were able to raise more than $200,000 for our project.
At the end of the day, I, personally, wouldn't bank on this type of investment because, you
know what?
It's very, very difficult to raise funds through investors.
But, nonetheless, this is the short story of how we were able to raise $200,000 for
our food and beverage restaurant and shop.
If you guys liked this video, I'm sure you're going to find a lot more value in the link
below.
Check out in the link below, I actually share with you my very beginning to where we are
at right now from the A to the Z, from starting, from negotiating free rent to choosing the
perfect location to crafting the right menu, which ensures us to have at least 20% margins
to marketing tactics to diving into your customer's mindset and offering them something that is
irresistible to all the marketing stuff that we have been doing, everything within that
link below.
If you guys are interested, make sure you guys check it out because that's where we
share all the things that I've been learning throughout the last 10 years of running a
business.
Okay?
Make sure you check out the link below.
Otherwise, subscribe within this journey because I'm going to be sharing a lot more of these
videos of one-on-ones.
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Otherwise, I'll see you guys in the next video.