The items below include a summary description. What cannot be fully explained here are the nuances of these tasks, their Resolutions for your particular project circumstances and the associated costs in potential dollars or time. The value of how the team is assembled and is expected to work together and held accountable is a dynamic and multifaceted process. Project-specific circumstances will dedicate the schedule and the sequence of tasks as well as the costs of each. However, in the early stages of this process, the key to these scope items is being able to achieve them financially. For most projects there will be three sources of money required to gain proper control of the deal and ultimately open for business. They are...
Pursuit Money – cash, not a loan, and typically not investor dollars, is vital to putting a deal like this together. Having the money to invest in securing control of the project and reaching a point where you are able to move forward. Spending on architectural and civil as well as the operating agreement and business plan is key.
Equity – this is of course cash from investors. The timing of their commitment and level of engagement is the primary factor that determines whether they are “silent” partners in a project. The need and use of your Pursuit Money is key in this regard.
Debt from a lender - this is typically in the form of an Acquisition and Development (A&D) loan. SBA loans are common for Ranges. The A&D loan will not cover equipment, fixtures, and finishes, which get funded separately.
If you do not have the necessary Pursuit Money, the project has a very low probability of becoming a reality for several reasons.
Pursuit costs typically include ten items including the budget and financial package of projections, operating agreement, etc. Then the Pitch Deck can then be completed (anything beyond casual conversations with investors prior to securing deal control is ill-advised). We’ll discuss the right strategy to put you in the right position ASAP.
A cautionary word: There are more ranges that have not been built because the search for quotes on range equipment costs, efforts to secure suitable property, or engaging an architect as initial steps in fact makes getting control of the project more difficult.
To avoid the pitfalls in this process, a methodical approach is necessary. It will involve the following in a modified sequence, with some issues running concurrent and others sequentially.
However, each project is unique and so too is prioritization of the tasks. This is not intended to serve as a guide but rather to provide you with understanding of a sampling of issues so that, should we have the opportunity to work together, you will be better informed as to the effort to reach grand opening. The process should be seen as both an art and a science.