Are you keen to open a pizzeria but don't have the money? Starting up any business means needing a certain level of initial investment, but that's not to say that it's impossible to launch a pizzeria without any money (or with a very small amount) - it simply requires a lot of determination and careful planning.
In this practical guide, you’ll find everything you need to know about how to open a pizzeria with no money - including what sources of financing you can use and how a good business plan can make all the difference in convincing investors to fund your venture.
Is it possible to open a pizzeria without money?
Is opening a pizzeria without money a total pipe dream? Not necessarily. It all depends on the type of pizzeria you'd like to set up.
There's no chance of you joining a franchise (which requires a substantial initial investment) or creating a gigantic restaurant with 10 pizza ovens and a 100-seat capacity, for example. But if you have your sights set on a smaller restaurant, which needs relatively limited initial investment, your pizzeria dream could be well within reach. You'll still need some contribution, but there are solutions to build this - which we'll discuss later on in this guide.
It's important to have your wits about you, though, as you'll still have to answer all the financing needs of how to open a pizzeria with no money regardless of whether you can dip into your own pockets or not. Between the deposit for the premises and the purchase of tables, chairs and decoration for the restaurant, to the kitchen equipment and initial stock, your start-up costs will need to be counted up and quantified.
You should also bear in mind that most banks will only lend you a loan if you can justify a personal contribution representing a significant part of your financing needs (usually at least 30%).
However you make up your initial contribution, it needs to be enough to launch the business and have enough cash left over so you can operate whilst building up your customer base, compete with rival pizzeria restaurants on an even-enough playing field and reach your break-even point.
Love Money and crowdfunding: a safe alternative to bank loans?
Crowdfunding can be an effective alternative to bank financing. Two possibilities are available to you:
- Donation-based crowdfunding
Crowdequity is where individuals or angel investors provide funding to support your business in exchange for shares in your business.
This can double-up as an opportunity to find potential business partners, who can provide you with advice regarding the launch of your project, and allow you to divide out the overall funding and provide the bank with evidence that your business is worth supporting.
If you decide to opt for donation-based crowdfunding, it will involve setting up a campaign on a crowdfunding platform, telling your story and collecting donations from kind-hearted individuals who wish to financially support your venture.
Being (most likely) pizza lovers, contributors may expect a small reward linked to your business in exchange for their generosity, such as a free meal or VIP invite to the launch of your pizzeria. It's up to you to quantify the size of the gesture according to the generosity of the donation.
In either case, crowdfunding will not only help you raise funds for your business, but can also be used as a lever to get those within the wider community talking about your venture and build up some hype around it. Don't downplay this level of excitement when applying for a loan - as it could be wildly effective in convincing a bank of the strengths of your business idea and even make them forget that it's derived from humble beginnings.
Opening a pizzeria with no money may, therefore, be a lot easier with a well-run crowdfunding campaign. For example, after setting a fundraising goal of £30,000 to launch a pizzeria and cooking school last year, pizza enthusiast Barry Lewis received double this amount in donations and is set to launch his dream business in Weston-super-Mare, a small, seaside town in South West England, in September 2021.
State aid available to help you open a pizzeria with no money
State aid for entrepreneurs can also provide a considerable boost when figuring out how to open a pizzeria with no money.
This can consist of government grants which are available in many kinds of forms - from cash awards to free equipment to help your restaurant flourish.
If you are in the UK, to find out more about support available, you can visit the gov.uk Business Finance Support Finder. Another option is to apply for the Start-Up Loans Scheme. Supported by the government, this scheme offers personal loans of up to £25,000. The interest rate on such loans is just 6% and entrepreneurs also receive access to free mentoring and business support.
In the US, the SBA works with various organisations to provide small businesses with grants. Check out their website to see if you meet the criteria to apply.
Another option would be to find out about regional business start-up awards and competitions set up by your local government that reward and fund business start-up projects.
How a business plan assesses the feasibility of your pizzeria business
Writing a business plan is an essential step in setting up a pizzeria with no money.
A business plan forces the entrepreneur to examine every aspect of his or her business, so they get a gauge of the exact means needed to bring it to life.
This will give you the ability to estimate your initial financing requirements and how profitable your business is likely to be in its first three years of operation.
You'll then have an idea of whether the amount is too large (to the extent that you'll have to say a sad farewell to your project), or if it's possible to raise the amount needed by applying for the loans, donations and grants listed above.
The business plan, therefore, enables you to check, once and for all, whether your pizzeria business is financially viable, at least on paper, and to assess how long it will take you to reach the break-even point after it has been launched.
To learn more, check out our guide on writing the business plan for a pizzeria.
The business plan to convince financial partners
Finally, it's important to remember that the business plan is the document with which you'll present your business idea to potential investors, whether they're banks, acquaintances or public bodies.
The business plan is therefore an essential document. Here again, the objective is to convince potential financial partners of the business's strengths and its profitability.
In a simplified way, a business plan is made up of two major components:
- A financial forecast that aims to highlight the expected profitability of the business and the initial financing requirement.
- A written part that presents, in detail, your project, the team, your business strategy, and your medium-term objectives.
Given how detrimental a role the business plan is in securing funding, it needs to be impeccable and convincing - and look the part, too.
This is a complicated process, especially if you're tackling this task for the first time. That's why we recommend that you try using online business plan software to guide you through the writing process.
There are several advantages to using specialised business plan software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan.
- You can be inspired by already written business plan templates
- You can easily create your financial forecast by letting the software take care of the calculations and financial aspects for you.
- You get a professional document, formatted and ready to be sent to your bank.
If you are interested in this type of solution, you can try our software for free by signing up here.
As you can see, there's certainly no shortage of solutions when it comes to raising enough funds to open a pizzeria with no money.
Would you like more information on how to best go about launching a pizzeria? Then read our guide on how to create an accurate financial forecast for a pizzeria.
If you have any other questions or queries related to the launch or operation of a pizzeria, please don't hesitate to get in touch with our team.
You can also read more on The Business Plan Shop:
- Business plan template for a pizzeria
- How to improve the profitability of a pizzeria
- How to take over a pizzeria
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