Have you always dreamed of owning your own bar but just don't have the funds? Or maybe you'd like to try to take over an existing bar?
Although not being able to dip deep into your own pockets makes the process a bit more complex, you can rest easy knowing that it is, in fact, possible to take over a bar with no money. The key is to familiarise yourself with a few tricks that will not only enable you to raise the necessary funds but also show your dedication to your business idea and its ability to succeed.
In the guide below, you'll find our top tips on how to take over a bar with no money. As well as going over the main sources of financing you can access, we'll take you through how to write a convincing business plan - a document that showcases your business as one worthy of financing.
Call on your family and friends for help when taking over a bar with no money
One way to build up enough capital to take over a bar with no money is by using love money.
Love money is, quite simply, money that comes in from your loved ones. Raising a bit of love money, in the form of capital investment, a zero-interest or interest-bearing loan, or donation can be an effective way to get the funding you need to launch your business.
Your loved ones know you well and know what you are capable of, it is therefore often easier to convince them to invest in you and your business than to convince a stranger.
Raising money in this way also gives you the opportunity to talk about your business model with people who know you and ask them for advice when taking over a bar with no money. Their opinions could be valuable in helping you improve your concept and how you present your idea to investors.
A substantial amount of capital raised through love money often goes a long way to convincing institutional investors such as banks that the project is well worth putting their faith and money into.
It is important to watch out, though when taking over a bar with no money. Love money has its own drawbacks - in that the amount of money raised is often fairly limited and close relationships can sometimes become hard to manage once mixed with business.
It's also important to remember that investment in a very small business is risky - so make sure you're asking for money from those who truly have it, and at an amount they can afford to lose.
Kick-start a fundraising campaign on a crowdfunding website
To raise money through ways that don't involve turning to the bank, you can also opt for crowdfunding.
You have two options when it comes to raising funds in this way to take over a bar with no money:
- Crowdfunding with equity participation: in this case, investors finance the company and become shareholders of it.
- The crowdfunding of donations: in this case, the benefactors support the project without any financial counterpart. It should be noted, however, that this is not always the case - as some companies offer their donors a counterpart in relation to the type of activity being carried out.
For example, if you want to open a wine bar, you might consider offering your most generous donors a wine tasting evening, with the category just below getting a bottle of wine and the smallest donors, a glass or two.
Crowdfunding, whether it's via donation or equity participation, is a particularly interesting way to raise funds because, in addition to actually funding your passion project, it allows you to introduce it to the wider community around you and pique the interest of the future customers. This is also a big asset when it comes to presenting your project to the bank.
Successful examples of bars raising money via crowdfunding:
With thousands of pubs, bars, and restaurants unable to operate in the midst of the pandemic, countless businesses have sadly been forced to shut up shop for good. Dynamo, a craft beer bar based in Dundee, Scotland, raised £13,115 via a crowdfunding campaign in December 2018 to secure its ability to undergo a full refurbishment and re-open its doors that month.
Searching for partners or investors
Another way to raise the necessary funds to take over a bar with no money is to bring investors into the company's capital.
Before undertaking a project without any personal contribution, particularly in the catering industry, you need to master the art of knowing how to present your project well, defend it and make other people as enthusiastic as you are to see it come to fruition.
Your objective is to take on more business partners and, above all, to get as many investors involved in your project as possible - as well as encouraging them to increase the stake they're willing to devote to your bar take over with no money.
It's imperative to therefore have confidence in your ability to see this project through and present your plan in a convincing and enticing manner. How does one possibly do this, you ask? By creating a flawless business plan.
Writing the business plan for taking over a bar without money
A business plan is a document that you'll use to both study the financial viability of your bar takeover project, and present your future business to banks and investors.
It is with this document that you’ll communicate your business’s concept and plan of action to potential investors when taking over bar with no money. It must therefore be precise and make people want to embark on your entrepreneurial adventure with you.
If you've never written up a business plan before and aren't sure how to go about it, you can use online business plan software to guide you through the writing process.
There are several advantages to using specialized 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 make your financial forecast by letting the software take care of the accounting aspects for you.
- You get a professional document, formatted and ready to be sent to your banker.
If you are interested in finding out more about this type of solution, you can try our software for free by clicking here.
Other ways to build up a contribution to take over a bar with no money
Finally, there are also some additional ways to build up the funds to take over a bar with no money.
The key is to try to multiply your sources of income to raise the equity needed: try overtime or working as a freelancer or consultant.
And why not also review your expenses to cut those that seem superfluous or to reduce those that can be?
We hope that this guide helped you understand how to take over a bar with no money. If you have any doubts about any of the points mentioned or for any other questions about taking over and setting up your business, please don't hesitate to get in touch with our team.
Also on The Business Plan Shop