Do you like the idea of winning over hearts within your local community through the medium of fancy bread and fresh produce? If so, you may be keen to launch your very own deli...but there's just one problem - you don't have the funds to start your own business.
So how does one go about starting a deli with no money? Is it even possible?
We're here to tell you that it is, although you'll need a lot of determination and a solid plan.
Don't know where to even begin? Don't worry - in the guide below, you’ll find everything you need to know about starting a deli with no money - including possible sources of financing and how a good business plan can make all the difference in convincing investors to fund your venture.
Is it possible to start a deli with no money?
Starting a deli with no money can raise a whole host of questions: how do I go about it and is it really feasible?
The short answer is yes. On the condition, of course, that you don't sight your sights too high on a deli that's either huge or has daily specials including foie gras or caviar.
To successfully start a deli with no money, you'll need to be reasonable about the size of your business: a modest-sized room and a menu composed of a few carefully-chosen recipes is a good place to start.
Setting a more realistic goal in terms of your deli's size and menu will also enable you to reassure investors when securing funding to launch it. The investors will play a huge part in covering the initial investments for your business (from the premise deposit to the purchase of furniture, stock and kitchen equipment), so it's important that they view investing in your business as a safe bet, rather than a threat to their own pockets.
You will also need to have enough cash to operate your deli for the first few months and promote it to attract and retain customers.
Love money and crowdfunding as alternatives to a bank loan
Before embarking on your search for financing to start your deli with no money, assess how much you need as accurately as possible.
Let's now look at the possible sources of financing.
Getting your loved ones involved in your business
The first source to consider is love money. As you may have guessed, this is the money you can collect from your family and friends, in the form of donations, loans (interest-free or not), or investments.
Raising a bit of love money, in the form of capital investment, loan, or donation can be an effective way to get the funding you need to start your deli with no money.
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 an investor you've never met before.
The success of crowdfunding and how it works
Another potential source of financing to start your deli with no money is crowdfunding. Here, two options are available to you:
- Crowd equity: this is where individuals or angel investors may provide funding in exchange for shares in your company.
- Donation-based crowdfunding: here, you set up a campaign on a crowdfunding platform, tell your story and collect donations from individuals who wish to financially support your venture. Being (most likely) sandwich enthusiasts, contributors may expect a small reward linked to your business in exchange for their generosity, such as a box of free baguettes or cheese. It's up to you to quantify the size of the gesture according to the generosity of the donation.
Crowdfunding can be particularly effective as it enables you not only to raise funds for your project but also to introduce it to your wider community and create some hype around it.
The potential effectiveness of crowdfunding can be seen in the example of Monty's Deli. Starting off as a market stall in South London, its owners launched a fundraising bid of £50,000 in October 2016 in the hopes of opening a restaurant. After exceeding their target within just one month, they launched the franchise's first ever restaurant, having since expanded to a total of three locations within London
Gathering contributions via crowdfunding is also an excellent way to demonstrate to a bank that future clients have a keen interest in your project, making for a more compelling argument that it’s worthy of a loan.
State aid available to help you start a deli with no money
If you have your sights set on starting up a deli with no money, you can also count on state assistance for entrepreneurs.
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 the 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 and loans. Check out their website to see if you meet the criteria to apply and start your deli with no money.
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.
Other ways to build up the funds to start a deli with no money
Still unsure as to how you'll make up the funds needed to start a deli with no money? Here are a couple of other ways you can build up your initial contribution:
- In the months preceding the launch of your deli, try increasing your income by taking on a side-job (such as a Deliveroo driver on weekends), work overtime, or pick up some freelance or consulting work.
- Review your expenses to cut or reduce any that seem unnecessary
How a business plan assesses the feasibility of your deli
Writing a business plan is an absolutely essential step in starting a deli 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.
It's vital in:
1. Checking that your deli can be profitable
A business plan enables you to accurately assess the initial financing requirements of starting a deli. By balancing these with the amount of money you're able to raise, you can ultimately determine whether starting a deli without money is feasible or not.
This is done by estimating how much money you'll need to launch your business and then sustain it until you reach the break-even point.
The financial forecast in your business plan will guide you by outlining these aspects, as well as helping you calculate the break-even point, the time needed to reach it and, most importantly, whether your deli is likely to be profitable or not.
2. Allowing you to present your business to investors to attract financing
Finally, the business plan is the document with which you'll present your business idea to potential investors, banks, acquaintances or public bodies to start your deli.
So you simply can't underestimate the importance of a business plan when launching a deli with no cash: it is the missing piece of the puzzle when it comes to reassuring them of your dedication to your business.
A business plan works as a point of reference for the business owner and management team, so should be looked at from time to time to keep your deli on track.
The essential elements of a deli business plan
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.
How do I write a business plan for a deli?
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 start a deli with no money.
We hope that this article has helped you to better understand how you can start a deli with no money. If you still have questions, do not hesitate to contact us for any questions related to the creation of a deli.
See also on The Business Plan Shop
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