Marketing is indeed fuel for your restaurant. It is a key ingredient in your success. Did you know you can use small business loansto help pay for your marketing? Most restaurateurs are swamped juggling menus, chefs, wait staff, vendors, customers and all the other details of daily operations. Who has time to become an expert on small business loans?
That’s why United Capital Source (UCS) exists. I started this company to help restaurant owners and other small business entrepreneurs succeed beyond their wildest dreams. It takes money to build your business. But finding the right type of small business loan can be daunting. And time-consuming. When you partner with us, you can stay focused on running your restaurant.
So let’s look at how you can get a small business loan to fuel your marketing.
WHY DO YOU EVEN NEED MARKETING?
The owner of Australia’s Marketing4Restaurants once asked his mom this question. She was in the restaurant business for years. Her answer? “So customers knew we hadn’t closed down.” She pointed out that brand new establishments advertise like crazy. Then they get busy. They’re a success! They figure there’s no need to keep marketing. “This is where they’re wrong!” said mom.
Competition is intense among restaurants. Trends and tastes change. Customers are fickle. Marketing is essential to keep you top-of-mind with diners. Without it, your restaurant can just drop off their radar.
If your marketing plan works – and we know it will – you’ll want to meet that new demand without missing a beat. You may need more working capital for other things. For instance, you’ll probably need more staff, in the front and/or back of the house. Small business loans can help you secure the working capital you need to hire more great people. Those new people can help manage restaurant operations or handle office work. That gives you more time to spend with family. Remember them?
But first, you need that money for marketing. https://www.sba.gov/blogs/6-options-financing-your-small-business-marketing-plan Caron Beesley for the SBA says, “If you can’t afford to allocate a sufficient slice of your sales revenue to fund your marketing strategy, you might consider financing it just as you would new equipment or inventory.”
SMALL BUSINESS LOANS TO FUND YOUR MARKETING
There are several types of funding appropriate to fuel your marketing. You could try friends or family. Just promise to repay in kind. (But remember that the cash you receive will be reduced by food and labor costs.) More likely, you’ll want to consider:
- Short term business loans
- Business line of credit – this is a great reason to use that line
- Accounts receivable financing
- Merchant cash advance
- SBA microloans ($500 to $50,000, usually administered by non-profit organizations)
Less-than-delicious credit? You can still get the money you need for marketing. Any of these options may be your best choice. That’s because these loans are based on your income and ability to pay. Not your past credit history. Is your revenue consistent enough to make regular bank deposits? If so, you may also be able to borrow against that predictable income.
Small business loans like these are good options if your restaurant is newer, too. Young businesses often have a “no credit” problem instead of a bad credit problem. On the other hand, if you have a longer history you may have a stronger credit score. You can also look at SBA loans.
Traditional SBA 7(a) loans can be used for many different things, including marketing. These are usually long-term loans for high dollar amounts. However, here at UCS we can now link you with SBA Marketplace loans – their “express” option. You can borrow up to $25,000 without collateral. And it’s fast. We can get you approved and on your way within seven days. Talk to us to learn if your restaurant might be eligible.
TASTY MARKETING IDEAS
How will/should you spend your new funds? You may already have a detailed marketing plan ready to go. But I thought you might be in the market for a little inspiration. Online advertising powerhouse Wordstream has compiled 25 marketing ideas and strategies for restaurants. They say they will “help you improve your business and get attention from growling stomachs everywhere!”
MANAGE YOUR MONEY WISELY
Wise borrowing can give your marketing budget a needed and timely boost, but conserving the cash you do have gives you more working capital.
Adopt ways to improve your cash flow:
- Negotiate discounts or deals with your vendors.
- Lease equipment to reduce payments. You can always finance a purchase later on if you want to keep it when the lease expires.
Reduce your debt. Don’t run up balances on your business credit card or line of credit. Keep balances low for when you really need the money. Your new marketing campaign, for instance. And pay off balances as quickly as you can. Otherwise you’re wasting money on interest you could put toward something else.
Work to repair your bad credit:
- Don’t over-use any of your business credit options.
- Repay loans on time, every month.
Caron Beesley says you can https://www.sba.gov/blogs/how-cut-your-marketing-budget-and-build-your-brand-profitably trim your marketing budget and still build your restaurant brand and increase profitability. Just don’t cut it out entirely. Remember that admonition about people thinking you went out of business. You don’t want it to become a self-fulfilling prophecy. One way to streamline spending is to use guerrilla marketing. As we noted in an earlier blog article, “Guerrilla marketing is generally defined as fun, funny rule-breaking, attention-demanding tactics that – ideally – take more creativity than money to execute.” That means you can rack up more new business per dollar spent.
Talk to us at United Capital Source. We’re here to help. It’s what we do, and frankly we’re very good at it. But the best reason to call us is that we’re in it for the long haul with our clients. Sure, we want to help you get a restaurant business loan now so you start your new marketing campaign. But that’s just today. Our goal is to help you make savvy borrowing decisions for your restaurant long term.