Recipe for Choosing Restaurant Location
Q: I am having a hard time finding the right place to open a small restaurant. Do you have any ideas?
--Thomas Orozco,
Rancho Santa Margarita
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A: You can find restaurants listed for sale in newspaper classified ads and specialty publications, or you can contact a commercial broker. You should look for a location with lots of foot traffic, high visibility, good signage and adequate parking. Once you have several possibilities, spend some time at the locations, especially during the hours you think will be the peak periods for your restaurant.
If you’re locating in a strip mall, look carefully at the other tenants and the other food service establishments and restaurants in nearby blocks. Are there lots of potential competitors? You want to be one of only a couple of alternatives in the area. Are there businesses that would complement your operation, such as popular stores that attract customers who might have lunch at your place? Check out the hours of the other businesses in the center. If most of them close at 5 p.m. and you’re going to open a dinner house, you may have trouble.
--Arthur M. Manask, restaurant
consultant, Manask & Associates,
Burbank
Factors, Brokers Can Help With Cash Flow Q: I am seeking investors for my company, which imports soap and bath products from France. My products are high-quality and several high-end department stores are interested, so I should have some purchase orders by the end of the month. The problem: The packaging cost me a great deal, and I ran out of money just when I need to order inventory. Please help.
--Lida Paukert, Fleur de France,
Beverly Hills
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A: When it comes to raising money, small start-ups usually turn to friends and family or to equity in their homes for financing. If you go to outside investors, you will find they want to take most of your business. In addition, raising venture capital is a long process that takes a lot of preparation.
An alternative, if you have orders lined up, would be to bring in a middleman--also called a factor--who will pay your supplier, bill your clients and advance you about 80% of the invoice. When the factor gets paid, he will pay you the remaining money, minus his fee. Factors will hit you upfront for between 1% and 10% of the order, and then “factor” the invoice on the back end, probably for an additional 3%.
Cash flow brokers also can help you find the money, through asset-based financing, factoring or other arrangements. Contact the American Cash Flow Assn. in Orlando, Fla., at (800) 253-1294 for more information or visit their Web site, https://www.acfa-cashflow.com.
--Adrienne Frank-Musson,
Cash flow broker, Synergy Business Solutions, Northridge
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If you have a question about how to start or operate a small business, mail it to Karen E. Klein, Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016, or e-mail it to kklein6349@aol.com. Include your name, address and phone number. This column should not be construed as legal advice.
