Overcoming financial hurdles
nd there’s yet another challenge for entrepreneurs in the hotel and food service industry: 45 per cent of those surveyed in the METRO Start-up Study said that the financial uncertainty is a burden. “It’s very difficult for food service providers to get a loan, because banks consider the hotel and food service industry to be risky,” explains Manfred Troike. The good news is that, in general, there are diverse funding opportunities for entrepreneurs and self-employed individuals in Germany – federal, state and EU bodies offer public funding. Potential sources of funding are available for all stages of setting up a business, whether it’s for a prospective business owner who needs start-up capital, a café owner who wants to invest in a new refrigerated counter or a bar owner whose revenues are low. “Unfortunately, the funding landscape is very confusing and the programmes are constantly changing,” adds Manfred Troike. Expert advice is needed when it comes to seeking out and selecting the right source of financial support. A good place to start is, for example, the online funding database of the German Federal Ministry for Economic Affairs and Energy.
“Many entrepreneurs need significantly more capital at the beginning than initially calculated, since, among other reasons, buffers are needed to compensate rough starts,” Troike explains. But there are also businesses – an ice cream truck or a corner café, for example – that only need to make modest investments. Microloans can be the right choice for these businesses. For example, the German federal government has established the fund Mikrokreditfonds Deutschland specifically to improve access to capital for small businesses.
Another form of financing is also gaining ground: with crowdfunding, entrepreneurs present their projects on specific online portals and solicit financial support. The aim is for the projects to be funded by “the crowd” – that is, by a pool of people. In the United States, this source of funding is well established in the hotel and food service industry, but there are also examples of success in Germany, from the frozen yogurt chain Wonderpots to the Berlin dumpling restaurant Häppies. Even town pubs are jumping on board: in the Bavarian village of Altenau, a project group raised funds on the internet to restore and reopen an old town inn that had been closed down.
In addition, there are grants for start-up coaching. Under certain conditions, small and medium-sized businesses can, for example, receive financial support from the federal government. This applies both to food service providers who are just starting up and to those who have been on the market for a while.