Crowdfunding: Can It Work for Brick & Mortar?

By , Crowdfund Beat Guest Post,

Founder + CEO of PieShell – Crowdfunding for food + beverage,

Having a store front or restaurant is expensive, especially when you’re just getting started. Between build-out and equipment costs, starting inventory, licenses, fees, and working capital, starting a brick and mortar business can easily add up to hundreds of thousands of dollars. It’s because of this that many people say that rewards-based crowdfunding isn’t a good option for brick and mortar businesses, but we beg to differ.

Crowdfunding is a great option for restaurants, bakeries, coffee shops, and more (if it’s done in the right way and on the right scale). We’re here to tell you how to make crowdfunding work for brick and mortar operations!

First, A Word of Advice

In previous blogs we’ve cautioned against being overly ambitious when it comes to crowdfunding. Instead, we advise breaking down your grand vision into a series of stepping-stones, picking one and making that the first stepping-stone for your crowdfunding project. Ask yourself, what’s the next step in my business?

We’re doubling down on this advice. If you’re already in business, we recommend using crowdfunding for upgrading or expanding your existing restaurant operation. You may want to invest in new kitchen equipment, renovate your space, or add new offerings to your menu. If you’re still pre-launch, then crowdfunding can be an excellent way to supplement funding from traditional sources like investors and banks. In fact, sometimes crowdfunding can be a precursor to traditional investment, as it shows that there is genuine interest in your venture.

For Existing Restaurants

Crowdfunding, much like running a restaurant, is time consuming and can be hectic. However, we think that brick and mortar businesses actually have a leg up when it comes to crowdfunding.

Unlike online-only businesses or those without a permanent location, owning a restaurant gives you the opportunity to interact with potential supporters in person and on a regular basis. Use this exposure to reach people who love what you’re doing and want to see it continue. Your “regulars” are the perfect people to tap for support, either by asking in person or advertising your crowdfunding project in your space (get ready to make some killer table tents!).

A great example of restaurant crowdfunding comes from Manu Alfau, chef and owner of La Bodega in Seattle, Washington. Manu used his existing customer base to raise $9,000 to build an outdoor patio. For gifts, he offered parties and food from La Bodega — things that he already knew his supporters would love.

For Startups

If you’re in the pre-launch phase, make sure that you’ve invested in the community where you plan to set up shop. That means doing things like being at local farmers’ markets, building an audience on social media that’s made up of people who are local to the area, and networking with other business owners to tap into their pool of customers.

Like we said earlier, it’s unlikely that you’ll be able to raise the full cost of starting a restaurant, so pick a reasonable crowdfunding goal and plan on supplementing it with personal funds, traditional financing, or a combination of both.

For startups, one advantage of crowdfunding is the opportunity to make people feel like they are truly invested in the success of your business. Simply put, crowdfunding is a way to create a sense of community ownership, which is incredibly important when it comes to sustaining a small business.

Gifts that Make Sense

Brick and mortar businesses also have a great opportunity to make a positive impression through gifts. Gifts should get people back into your establishment where they can experience the fruits of their contributions and also become repeat customers!

For example, in 2010 in the small town of Vergennes, Vermont, Julianne Jones and her husband decided to take over a former laundromat and transform it into a French-style bakery. They rewarded their supporters with tokens that could be exchanged for goods once the bakery opened.

Obviously, this strategy is limited to those in the area, so make sure to have a back-up plan for supporters who won’t be able to make it in person.

Meet OUR First Brick and Mortars

Ok, ok, there’s a reason that we chose to focus on crowdfunding for restaurants for this blog. We’re welcoming our first three brick and mortars to the PieShell family!

The first, The Cookie Cups, was live on PieShell at the end of 2016 and successfully reached their first stepping-stone, moving them closer to their bakery cafe dreams!

Second is Bon Chovie, a rock-and-roll seafood restaurant that started life at the “flea food market” Smorgasburg. They will be launching their crowdfunding project on PieShell in the next couple months to help fund the move to a new location in Brooklyn.

And last but not least, LC Farmery. A casual and engaging experience, connecting West Chelsea patrons to passionate craft producers from around the state via a rotating menu of locally sourced ingredients from farmers, fisherman, and purveyors, will be launching a project in the spring.

We’re excited to see them pave the way for many more restaurants to come!


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