Raising money for a loan can feel both daunting and difficult. I should know — I’m in the middle of raising a round of investment for our second location Noe Valley Bakery West Portal
Once we signed our new lease, the truth of what I had done sunk in: I had a very limited amount of time to find the funding I needed to pull this off. As I have moved through the fundraising process, I’ve felt grateful that Michael, my business partner, and I started laying a foundation for this business loan long before we needed it.
If you are even thinking of expanding, opening a second location, or opening new branch in even the next five years, here are things you need to start thinking about now.
- Start preparing before you’re ready: Michael and I knew we needed to start looking for a second location years ago. And so we started talking to friends and business colleagues. We started laying the groundwork. And let me tell you, when opportunity finds you, it’s going to hit you like lightning. Someone is going to say to you, “I’m selling my foodtruck, do you know anyone?” You want to be prepared to jump on the opportunity and say, “Yes, I am. Can we talk?” If you have to scramble to start thinking about a loan (which can take 60+ days just to process) the opportunity can pass you by.
- Invest in your best asset: your NETWORK. Every single person who is helping me with the expansion of the bakery is someone I had a prior relationship with. I know when running a food business, it’s easy to believe that you don’t have time to go to that restaurant association meeting or to think about your long-term business visions — you’re in the weeds trying to get the schedule set for the month or get that order out the door. But this is going to be the thing that will help you long before it’s go time.
- Go to the Bank. Before I really even knew what kind of loan I was looking for, I started by making an appointment at my commercial bank. I met with my banker, and explained the kind of expansion that I thought we might want to undertake. This was a great starting place because they were able to start educating me on the kinds of loans that were possible. Plus, I was able to make some much-needed face time with the people who later are helping me get a loan.
- Clean Up Your Paperwork. Loans require an absurd amount of documentation. The bank will want to see everything, and having it scanned into a PDF, filed and sorted will make everything a bit easier when you’re under a time crunch. What surprised me? While we had our last 3 years of tax returns scanned and ready, I’m currently looking for the paperwork associated with any vehicles for the bakery.
- Start Talking About It. And Showing Up Where You Want to Be. In getting the new location for the bakery, we had two things that really worked in our favor. First, we started telling people that we wanted to expand. We told people specifically what neighborhoods we wanted to be in. We attended neighborhood meetings in our top choices. We introduced ourselves to people and started listening to the needs of that area before we set anything into action. This helped us two-fold. One, it helped us better understand what areas were going to be good fits for us long term. Two, it helped the people of that neighborhood be our eyes and ears. The day that the old tenant announced they were closing, we got a phone call. And I was able to call my commercial real estate agent and ask her to investigate. We might have been first in line for our top choice location, simply because we had put our intentions into the world, and the number of eyes watching for an opportunity multiply.
What is the hardest thing about getting a lease and raising money? I’d love to hear your questions and answer them in a future blog post!