By Doug Radkey, Foodable Industry Expert
You’ve developed your restaurant concept plan, you’ve completed a feasibility study, and you’ve written a pretty solid business plan. Or maybe you’ve been successfully operating a restaurant for years and are looking to expand. Fantastic! But now what?
Due to the high level of risk for independent restaurant related startups, the traditional bank loan is never an easy option. A majority of food service start-up or growth projects need an investor or business partner with the financial means to assist an aspiring restaurateur through the development stages.
However, you cannot approach an investor or potential partner without being prepared with factual research, a strategic forecast, and an execution plan. Investors are looking for opportunities that present scalability, profitability, consistency, and sustainability-related characteristics.
Here are a few tips to assist you through your first pitch!
No. 1 Perfect Timing. The first thing to keep in mind when pitching to an investor is their time. They will likely not want to read through the 100+ pages of feasibility, concept, and business planning content you’ve accumulated.
You need to first develop a “pitch deck,” a 10-15 page document (print and/or slideshow) that showcases the most relevant and important data from those plans. These points should quickly attract the investors attention, further exciting them and engaging them in key points of conversation.
No. 2 Being Prepared. Delivering a winning presentation starts with practice. Create a series of “pitch tests” to speak in front of friends, family, and other business or restaurant industry acquaintances. Adjust your timing, look for questions the investors may ask, and receive feedback on your presentation style (voice level, eye contact, posture, and more).
You can also watch episodes of “Shark Tank,” “Restaurant Startup,” or other investor-related shows and look at the questions they ask of the pitchers. Formulate a list of frequently asked questions and ensure you know the answers to them for your restaurant...quickly!
No. 3 Being Passionate. As much as you’re selling the restaurant concept and explaining the gap it will fill within the market, you are also selling yourself. This is the opportunity to tell your story — a great way to start your presentation. Show your passion for food, beverage, hospitality, and general business.
Quickly highlight your education and industry experience. Why do you want to open or grow this restaurant? What makes you the best fit for this concept? Why did you choose that specific name? If there is a story, tell it!
No. 4 Simple and Memorable. Include only key points within your pitch deck while using photos, graphs, and even quick video clips if it’s a digital presentation to help visualize and explain. Use investor and industry-related keywords while also leveraging any current food and beverage industry related trends.
If possible and safe to do so, have a small sample of your proposed and unique food or beverage offerings for the investor(s). This will help drive your value proposition points while indicating to the investor an element of your secret to success.
No. 5 Strategic Content. Keeping it simplified, along with it being approximately 30 minutes in length, will force you to concentrate on the most important points. Ensure that you identify the following:
- The gap within and size of the market
- How you will deliver a solution to the market
- Your secret(s) to restaurant success
- The overall concept and revenue model
- Your unique F&B menu options
- The summary of your marketing plan
- The current competitive landscape
- The structure of the management team
- Your projected key performance indicators
- Start-up or development costs plus exit strategies
For each key point, formulate three levels of time for discussion. Each point should be delivered or described in 5 seconds. However, you should be prepared to explain the point in detail over the course of 30 seconds and also 90 seconds if the investor would like to discuss it further.
No. 6 The Numbers. Ensure you know your numbers. Know your market size, ideal customer counts, break-even points, seasonal fluctuation, total square footage needed, total kitchen size, detailed start-up costs, value of assets, interest rates, return on investment, food costs, labour costs, and the list goes on.
Yes, it’s hard to memorize all of this data. Most investors will not penalize you for having a ‘cheat sheet’ with all of the summarized data points for yourself. Include the most important ones within your pitch deck.
No. 7 No Guarantee. Nothing in life is ever guaranteed. If your pitch fails, don’t be discouraged. Note areas of concern for the investors, learn from any lessons during the presentation, and adjust your pitch for the next one. Look for other investors, visit local start-up incubators, attend industry-related trade shows, and build your network within the industry.
First impressions count, but good things come to those that work towards a second opportunity!