Independent hospitality is built by people who back themselves. Every neighbourhood restaurant, every bakery with a growing wholesale list, every second site opened to keep a brilliant head chef, began with someone deciding their idea was worth the risk. What comes next is almost always the same question: where does the money come from, and how do you ask for it well?
It is one of the least discussed parts of running a hospitality business, and one of the most consequential. Finance shapes what you can build, how much of it stays yours, and who sits across the table from you for the years that follow. Yet operators are so often left to work it out alone, learning the hard way what they might have known from the start.
This series sets out to change that. Over the coming months we have asked one of the sector's most experienced funding specialists to walk through what independent operators actually need to know, from whether an idea is investable at all, to running a raise without giving away more than you should, to choosing the kind of finance that genuinely fits the business you are building.
Our guide is Ian Woodley, co-founder of Finance Kitchen. He has spent years funding the businesses that give our high streets their character, and in this series Ian shares what he has learned from the other side of the table.
Do investors want your restaurant? Or do they want 10 of them?
Ian Woodley on whether your idea is investable in the first place, and what you can do to make sure it is.
One of the key questions I always ask is, will the idea scale, and of course does the founder have the ambition to scale. Scale equals revenue, profit and a brand that in the future could be worth a lot more than when the investment was originally made. Investors aren’t interested in your dream of having your own restaurant, they are interested in having 10 sites with the option of cashing in making many multiples of the original investment.
That is the hardest sentence in this article and a lot follows from it. But scale is not the only story, and if you have no plans to conquer the food world there is a route that suits you better, which we will come to. Before any of that, the question worth answering honestly is whether what you have built is the kind of thing somebody would want to back, and who that somebody is likely to be. This piece is about getting to that answer.
The market you are walking into
The pandemic sub divided two very different investment markets. Before 2020, if anything the problem was over supply with too many new openings. Bored city types embracing a new career in street food, fuelled by an upswing in interest in the food and hospitality sector, and funded by crowdfunding, the new sexy way to get the public to have fun with investment and be part of the story of a new restaurant business.
The next two years of being closed, partially closed and the well-meaning Eat Out to Help Out scheme did a huge amount of harm to the sector and therefore its attractiveness to investors moving forward. The bounce seen in some sectors never really happened in hospitality. Further headwinds, food inflation, energy costs and staff costs, employer NI in particular, have all made it harder for restaurants to grow and made them less attractive to investors who could put their money in the green revolution or tech or medical science, all a lot less fun but more likely to get a bigger return.
Enough of the doom and gloom, all is not lost. All of the fundamentals remain, it’s just tougher, which means the work you do before you ask anyone for money matters more than it used to.
Prove it in real life first
It starts with an idea, and the good news is that through pop ups, residencies, supper clubs and street food, any aspiring food entrepreneur has the opportunity to trial their food and build a bit of a following. Social media is key these days as it’s relatively cheap to create a bit of a buzz around your brand, and by the way it’s the brand the investor will be investing in, as it’s that which will be worth the money some sunny day.
A business plan with no live experience is a lot harder to get any traction. If you have a live location the investor can also come taste your food and you can learn what works.
The exception: when scale isn’t the point
Investment in fine dining flies in the face of the scale argument, but then again these are what we term “vanity investments” where people want to be associated with the project, have somewhere they can entertain and have no real expectations of getting their money back anytime soon. If that is the money you are chasing, you are having a different conversation, and it pays to know which conversation you are in before you start it.
If you’re not planning to conquer the food world
Serious investors are looking for growth, so where does that leave the thousands of single site operators with no ambition to build an empire? For them, the money is far more likely to come from closer to home. It pays to network within your local business community, where a good neighbourhood operation can tap into the philanthropic instincts of successful local entrepreneurs who would rather see their money doing something they can walk into.
Community raises are worth a serious look too. The big crowdfunding rounds are not the hot ticket they once were, but community raises still do well, and many a rural pub has been kept alive by exactly this strategy. If your business matters to the people around it, that is something you can raise against, and none of it depends on dreaming of ten sites.
Make yourself worth backing: SEIS and EIS
Tax is also something you have to think about, not for you but for your investor. Investments in young companies can attract SEIS, the Seed Enterprise Investment Scheme, and EIS, the Enterprise Investment Scheme, which means your investor gets a good tax break by buying shares in your business.
Armed with a business plan you should be contacting HMRC to get what’s called an Advance Assurance letter, which basically means all things being equal investment in your company will mean your investor can write off against his own tax bill. Before anyone thinks they have discovered the silver bullet, this tax relief is open to investment in most new businesses, not just yours. Not having Advance Assurance though is a turn off, so it’s worth the hassle of applying.
Where that leaves you
If you have something trading, however small, a brand that means something to the people who have found it, an honest answer to the scale question and an Advance Assurance letter in your inbox, you have done the part that most people skip. We need entrepreneurs to build new concepts to market, it’s what drives the sector, and the sector is short of them right now.
What comes next is the raise itself: the deck, finding the right investor, working out how much of your business you are prepared to part with, and the uncomfortable business of being assessed by someone who may or may not be good for you. All of that is another matter entirely, and one worth taking every bit as seriously as this.
Ian Woodley is the co-founder of Finance Kitchen, the specialist finance broker built specifically for the independent food and drink sector. After a career spent in financial services, he turned his attention to hospitality, a sector that traditional lenders have long found difficult to understand and even harder to fund well.
Finance Kitchen exists to close that gap, helping operators of every size, from pop-ups and street food traders to established restaurants, raise capital through equity, debt and asset finance, and matching them with investors and lenders who actually understand the business they are backing. In 2026 the company was named Specialist Asset Broker of the Year at the Finance Connect Summer Awards.
