Financing

Every planned or existing business in the hotel or restaurant industry should have an economic objective target in the form of a plan calculation and financing strategy that has been aligned with the specific needs of the company.

Because of our extensive experiences in this field we were able to identify the following “classic” financing mistakes:

• Purchase price too high
• Amount of own capital insufficient
• Amount of fixed expenses too high
• Underestimation of operating resources
• Incorrect calculation for personnel and related costs
• Connection between development of sales and raise in personnel expense
• Realistic competitive prices are below company’s price structure
• Dependence on any particular client or exclusive vendor
• Neglect of accounting
• Chronic liquidity issues leading to consistent use and abuse of line of credit
• Missing growth opportunities through an untimely early granting of  securities
• Firm’s bank denies subsequent loan because of past communication issues
• Incorrect assessment of customer’s payment ethics
• Failure to apply for public financial aid programs, neglect to investigate possible combination options for such programs
• Selected incorrect form of financing  (long-term investments financed by short-term loans and vice versa