Thursday, May 19, 2011

Don't underestimate how hard it is to make money

I'm not wealthy. TM is not wealthy. Our parents are far from wealthy. And for better or for worse TM and I have both moved around a lot in the industry in order to leave behind lawsuit-worthy levels of sexual harassment, aggressive and unchecked bullying, outright deception from management, wages that boiled down to as little as $5.50/hour, and lack of arguably basic standards including health insurance or a clean and safe working environment. I understand that we have "chosen" to forgo the sort of career path that potentially enables impoverished restaurant workers to find investors that will help them start their own concepts. On the flip side, I wouldn't go back and stay a minute longer at any of the places I've left if given the opportunity.

So when - at the behest of our well-meaning friends enamored with TM's cooking - we set out five months ago to open our first restaurant, we naively believed that we would be able to win over more than a couple potential investors with our innovative ideas on how we would demand better from the industry. We even designated a whole month to our efforts - affectionately dubbed "Fund-raising February." Come May, we have gained verbal commitments from several individuals who we will be forever indebted to as the-ones-who-believed-in-us. The big investors, however, the ones loosely swinging around numbers in the 5 or 6 digits have all but disappeared.

Shaken but not deterred, we have sought additional options. This included revising our earliest projections from a healthy $750k in start-up capital to a very lean $300k. We have obtained quotes for used kitchen equipment, renegotiated with our landlord to spread upfront costs over the term of our lease, and reconfigured operations so that I'm on the line. We have also sought new financing opportunities, including loans through the California Redevelopment Agency and the Small Business Development Center. We worked painstakingly on a Kickstarter video and are even considering using credit cards to bridge any final gaps.

Despite the nerve-racking process this has all turned out to be (and continues to be), I have to admit that I'm grateful for the experience. I'm grateful because it has made me even more resourceful and will make me a better money manager. And ultimately, if we can look back years from now on a successful restaurant launch, I will be able to say with not a little glee that choosing to stand up for ourselves was never a detriment.

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