Essay Example on Raising Capital for Establishing a Fast-Food Business

As an entrepreneur, raising start-up capital is an essential part of establishing any business. Since our business idea of creating a fast-food restaurant is new, there is the possibility of meeting resistance due to the amount of risk involved in funding. Obtaining finances will significantly depend on the stakeholder's creativity and diligence. Many factors that will determine the amount of start-up capital required to develop the fast-food business will be considered, and the necessary steps will be taken.

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The funds required will depend on several factors. For example, the business plan should indicate the number, type, and quality of equipment needed for the restaurant. Other requirements include furniture, refrigerators, and microwaves among others. The items above may be new or used depending on the operating capital at the beginning. It is possible to use a lot of money to establish a restaurant, but it may not be necessary to do so. For instance, a space that was previously rented as a restaurant may be considered to avoid purchasing new furniture and other equipment.

The potential source of funds will be from our families, friends, and savings. The business plan will be presented and explained to the parties mentioned above so that they will get to see our aspirations. A well-structured and written budget will be provided to the potential donors to convince them to fund the business or give the money to us as a loan (Burns & Dewhurst, 2016). As partners, we will perform a thorough inventory of all our assets including our saving accounts, recreation equipment, and collections. After gathering our resources, we will approach our friends and relatives who are willing to assist us to succeed. Everything will be put in writing, and we will present ourselves to them professionally. Priority will be given to those who can afford to take the risk of investing in the business. We could also consider taking advantage of the local, state, or federal programs that offer monetary aid to small businesses. Lastly, we may consider looking for a partner who will be willing to work with us in our venture. If lucky, the person should have resources but no interest in doing the actual restaurant work. However, a written partnership agreement must be drawn and must contain well-defined responsibilities and obligations of each party.

Short term assets of the fast food restaurant are those that the business expects to convert to cash within a year. The short-term assets include inventory, cash, and accounts receivable. The cash consists of any money in the bank or physical currency at hand. Inventory consists of the cost of food, beverages, and ingredients among others. Long term assets include kitchen equipment, buildings, booths, and cash registers. Intangible assets like patents are also long-term.

Contingency Plans

Before opening the restaurant, it is crucial to be aware of the risks that might be involved. One of the risks expected is restaurant failure. Even though all the necessary steps like hiring a chef and other workers are in place, it does not guarantee customers. If the situation explained above happens, the business will experience losses. One of the most significant risks to be aware of and adequately prepared is food safety. All the employees and staff should be educated on food handling and be warned about serving spoiled food. It would also be necessary to continually check the room temperature of the storage room to avoid food poisoning. Food storage is one of the primary risks anticipated and is related to the stocking and storage of food. Every worker will be trained about the right procedures for storing food. If customers are served with spoilt food, the business' reputation will be destroyed.

Thirdly, any restaurant is at risk of fire than any other business since cooking and baking requires high temperatures. The oil used is also highly flammable. Fire safety must be practiced to avoid the risk explained above. All employees will be trained on the precautions to avoid any fire incident and the necessary steps to be taken in case of a fire incident. Fire extinguishers will also be installed in different parts of the restaurant, and all the staff will be trained on how to handle and use the equipment. Another contingency plan to face the risk of fire is by keeping any flammable material away from flames. Lastly, the restaurant will not have more guests or tables than the ones allowed by the local fire codes.

Every business has its anticipated problems, and it is upon the entrepreneur to use the expected opportunities. First, our restaurant will be unique since it is Italian. Italians are known for their extensive meal courses and different meals ranging from appetizers, coffee, desert, and entrees among others. The business will be established in a strategic geographical area where many Italians reside to make it easier for them to access the restaurant. However, the restaurant does not perceive the Italians to be the target audience, but these people are critical since they will set the pace for the rest.

References

Burns, P., & Dewhurst, J. (Eds.). (2016). Small business and entrepreneurship. Macmillan International Higher Education.