18 – 20 February 2020 • Russia • Moscow • Crocus Expo IEC, pav.1

Investments in the restaurant business

Restaurateur Pavel Kosterenko, founder of the Local Band Group (Americano, Breakfast Club, Local, Table One, Favorite Cake) shared his thoughts on why you shouldn’t look for an investor to develop a project and what to do if you don’t do without it.
Attractive formats for investors

«In my opinion, almost everyone is interested in investing in a restaurant. Everyone thinks about his cafe, bar, coffee shop - this is due to the accessible form of business. There are a lot of good cafes in the city that can really inspire you to open your own, and this is normal.

The first option is a concept built around a single product: for example, only supercoffees, crabs, eclairs, and so on.

The second option is a complete project. Many cafes in Moscow are good copies of restaurants from England, Italy, France, Portugal, America; there are worthy concepts of their own, so to speak, from the head».


Investor Search

«I want to advise you not to look for an investor, but to think about creating your project. This is a new level - work for yourself. So, investors or people who can lend you will always appear if you sincerely wish to open your own business.

I think investors will not invest in a startup. That is why we have a lot of good projects: the guys come together and add up savings, or everyone takes a consumer loan and builds his project.

Investor is the worst way; smart investors I have not met. It is better to borrow at 20% per annum and that's it».


Terms of cooperation

«The common model is 70/30: the management company takes 30% for the work, and the one who gave the money is 70%. In my opinion, this is not true. How can the project develop, bringing the owner 30%, and an investor who does not work - 70%? I advise you not to enter into such a partnership.

The ideal form - the restaurateur receives 60%, and the investor 40%». 



Expectations and risks

«The investor expects to return the money in a year or three. It is this attitude that ruins a business: an investor demands money, since it is already the second year, and for example, there is no desired result. It is necessary to look for a partner who understands that one project will not bring anything: you need to invest in a team and develop. You can not open and wait, you need to do something new.

The statute needs to prescribe that build the project and the risks of 50/50. The contract must be such that the investor understands: no one guarantees a profit. If the institution is unprofitable, then it closes and no one owes nothing to anyone. Learn how to sell your idea, and not to borrow.

The most common mistakes in cooperation with investors are the standard charter, the lack of a partnership agreement. Create documents for yourself. What you come up with, then you need to add, so that after a year or five years not to return to it.

If an investor is unhappy, it means that we must part, let them go with losses, sell a share for one dollar».


Loan or investor

«The loan must be taken when your company, not you, can provide it. An investor is the first step, but you should always say goodbye to him».

By link - http://www.horeca-magazine.ru/article/7317/