Moving 12th Ave Grill, part three: Show me the money!
[Editor's note: This is the third installment of a series, following Kevin Hanney as he moves 12th Ave Grill into the former Victoria Inn space. Read part one, the overall plan, and part two, with pictures of the Victoria Inn space as it is now.]
The biggest question I have when someone opens a new restaurant is: Where does the money come from?
For Kevin Hanney, the answer's been different for each of his restaurants:
12th Ave Grill, the original
Cost: $150,000 to $175,000
Financing: Credit cards and savings
"I gutted it front and back and brought in all the equipment (used) and a new grease trap for that," Hanney says. (He can also tell stories about the pain and delays of installing 12th Ave's grease trap, but maybe we'll get to that in a later post.)
Salt Bar and Kitchen
Cost: $250,000, with all new equipment
Financing: Through four working partners: Danny Kaaialii, the manager; Quinten Frye, the chef; Tyler Uehara, who also works at Young's Market, a wine and spirits distributor; and Hanney.
The new 12th Ave Grill
Cost: Estimated at one million, $750,000 for building improvements and the rest for fixtures, furniture, equipment and training.
Financing: It's a little complicated. Hanney explains:
"For the current investment there are basically seven entities involved: the bank and six investors or investor groups. We had a minimum $50,000 investment. We of course accepted larger, which we have a few. All of the investors are customers of the restaurant. Who else is going to believe in you more than your regulars?
"Some are single individuals and some are small groups that formed LLCs, but are represented as one investment entity. Some are successful business men and most are in some way connected to the food and wine business."
Hanney also took out a loan for about 65 percent of the entire investment through First Hawaiian Bank. It's the first time he's had a personal banker. Obviously, the bank has a vested interest in the success of Hanney's new restaurant; it wants its money back. "I've really learned for the first time that a bank is a great resource for you and they can help you with a lot of things," Hanney says. "They have all sorts of connections and complicated Excel programs [for finances and projections]. I'm learning how to utilize the bank as a partner and take advantage of its vast experience."