In this article, we’ll be discussing how to open a bar without money.
Are you passionate about setting up your own bar operation but little to no money set aside for actualizing such desire? It’s quite common among aspiring entrepreneurs.
Funding challenges are much lesser today than they were some decades ago.
So, is this possible to actualize such desire? Read on to find out.
Progressing From Concept To Opening
Quite a lot of steps are involved in setting up a bar or hotel operation.
They include coming up with your bar concept, picking the perfect name, picking a suitable business entity, and writing your business plan.
Others include securing funding, picking the right location, obtaining licenses & permits as well as finding a supplier.
That’s not all. You’ll also need to design a layout for your bar, purchase supplies and equipment recruit your workforce, and market the business.
All these are essential requirements necessary for the successful launch of your operations.
Funding is Crucial
So, it’s important to discover reliable ways to attract the funding needed. In most cases, entrepreneurs are faced with two options; to buy an existing bar business that’s up for sale or building one from scratch.
Both of these scenarios require sufficient funding.
Luckily, there are multiple ways to raise the cost of opening a bar.
Does it mean a Bar can be opened without Money?
This article started with the main topic which can be misleading in terms of interpretation. It’s likely to raise questions about the possibility of starting a bar without money.
What we’re simply referring to is how to open a bar business with no money of your own.
A bar business can be started with funding from a variety of sources as you’ll find out shortly. Of course, to attract funding, your bar business idea must be solid or viable enough.
For investors, the ability to recoup their investments and earn profits is paramount.
It’s Obvious that You Have Little to No Capital Set Aside
Logically, anyone seeking to start a bar business with no money has little to nothing set aside in terms of seed money or savings as well as business credit.
This is nothing to be ashamed of as it’s common among a majority of entrepreneurs.
By starting from such humble beginnings a lot of thriving bar businesses have emerged. Yours can follow suit by finding reliable funding sources as outlined below.
Here is how to start a bar without any money.
7 Ways To Open Your Bar With No Money of Your Own
There are multiple options for getting financing for your bar business idea.
These include convertible debts, grants, peer-to-peer lending, angel investors, crowdfunding, venture capitalists, and partner financing among others.
Let’s discuss each of these funding options as follows;
Under this type of funding arrangement, you get to obtain the required capital for opening your bar with the agreement that such debt is converted to equity in the future.
Here, you’re agreeing to cede some control of your bar business to the investor.
However, such an agreement isn’t automatic. Ceding some level of control is only activated after a violation of the set rate of return. It may also be activated after a set date which then allows for the conversion of debts to equity.
You must understand all such agreements in addition to seeking legal advice on their implications.
The good thing is that your bar business idea can see the light of day even without personally having dedicated funds set aside for such investment.
You can leverage government grants targeted at small businesses. However, not all businesses qualify for such.
The U.S. Small Business Administration (SBA) has a set of criteria for accessing its loans. You’ll need to find out whether your bar business qualifies or not.
If it doesn’t there’s no need to lose hope as there are tons of other viable ways to raise money for your bar business.
This is also called marketplace lending, and rightfully so because it introduces borrowers to lenders. There are lots of websites that provide platforms for both parties to interact.
Here, certain requirements are needed to qualify for funding.
Your FICO score largely determines your creditworthiness and is used as a yardstick for assessing loan applicants. Some of the top peer-to-peer lending sites include Funding Circle, Prosper, and Payoff, among so many others you can use.
Even when your bar business idea doesn’t have demonstrable growth that could attract funding from certain quarters, angel investors can be of great help.
An angel investor not only provides the needed funding but is likely to go above and beyond by providing assistance and help in any way they can.
Angel investors are likely to be experienced business people. As such, they provide the expertise necessary to ensure their investments are safe and the business idea succeeds.
This way, they’re able to recoup their investments with profits. Like other funding options listed, this creates a win-win situation for all.
Under this type of funding arrangement, a community of small investors pools their money together to fund your bar operations. Here, you aren’t defending or seeking investment from a single investment source.
With crowdfunding, you’re able to launch or see your bar business idea through its developmental phase before pitching to bigger investors.
If you can afford to cede part ownership of your bar business to an investor, then this should be an option to consider. Venture capitalists provide all the funding necessary for takeoff while they get a percentage of stake in the business.
Here, the percentage ownership to capital ratio needs to be worked out and agreed upon by both parties.
Before everything else, your business idea must be viable and must be considered as having the potential to be able to access such monies.
Under this type of funding, a seasoned player within the bar industry decides to fund the business idea. This is mostly done to have access to distribution rights, sales, and several other benefits.
You only need to explore these funding options as their effective ways of generating the needed investment to launch your operations.