Hello everyone, I've decided to look into getting a shop instead of working out of my home or my Grammas (I have a inside dog and she's never home lol) Plus neither of us are comfortable with strangers parading in and out of our home lol. Any who I was wondering if anyone had any tips on where to find loans or grants and what kind of things you need to do them...Thanks for the help!
This websites is helpful:
See what the requirements are for your area: City, State
DON'T BUY ANYTHING UNTIL YOU KNOW IT IS ALLOWED IN YOUR SHOP.
You can never learn too much to benefit your future.
Happy Baking and Decorating,
These days it is very difficult to get business loans, and you can forget about grants. The first step is to have an airtight business plan, but considering the failure rate for new food service businesses you will need a competitive advantage that really sets you apart from the competition to attract investors, and you may have to give up equity.
Another alternative is to look for a commercial kitchen you can rent, if you find one in your area you should be able to get up and running with a minimal initial investment (less than $5K). Of course you would still need a business plan to determine if it's even worthwhile to pursue this kind of business in your area.
I agree with Jason. Loans are not available. And in this market, I'm not sure your house would be viable collateral. Cash is pretty much the only way that is going to work.
A storefront will be anywhere from $50K to $100K and up in bigger cities. The way most of these you see are financed are through family or private loans or savings. I know all of my competitors and we all had the money or someone in the family provided the funds. My business is debt free.
Another thing to think about: In this economy, even opening debt free is not easy. Add to that a substantial loan payment and the numbers are difficult to work into a business plan. Then add the possibility of failure, 85% for new businesses, and that loan will still be hanging over your head for many years after the doors are closed.
Because of health codes, a food service establishment is far more expensive than a cute gift shop that can open on a deposit and first month rent with some collected beginning inventory. The buildout and specialty equipment will be the expense. Both my husband and I have our contractors' licenses and it was substantially lower. But we still have $25K in it and we owned the already finished to spec space.
Thanks guys...sigh* I guess I just need to stick with hobby baking and my real job then....No way I can ever have enough money to start up out of my own pocket (I'm a single mom that lives in a town of about 8,000) I'll hang on to the dream that one day I can make a business out of doing what I love Have a great day!
I had impeccable credit and was in business 4 years (as it cakes was my only source of income) when I tried to get loans to open my shop 4 years ago and got JACK except for an equipment loan (which was a lease-to-own deal where if I defaulted they came and took it all away) so I charged it. All of it. It will be paid off this year (FINALLY!! ). Don't count on loans.
Thanks KoryAK I really didn't want to do loans anyways cause I don't like owing large amounts of money to anyone. I have a key to my Grams place so I have a place to bake now and permission to use a room at the tech center here in town to do consultations so problem solved lol