By Vanessa Cavasinni, editor Australian Hotelier
Michael Dixon, director of Dixon Hospitality Group, explains how he first got into the pub game.
With Dixon Hospitality Group having rapidly become one of the fastest growing pub operators in the country, we asked Dixon how he raised the capital for his first venue, before the company grew on such a grand scale.
“Without a doubt, the hardest hotel is your first. Raising and finding enough capital, not only to buy but to sustain and grow [is difficult].”
Dixon suggests that for a first venue, the traditional avenue of saving is the best bet.
“Saving enough personal wealth and approaching the banks is the easiest way to purchase the first asset. For myself it was trying to attain the asset without any debt against it, so I left enough room to grow not only that hotel, but future expansion of other hotels.
Dixon’s advice is simple: “The less you have to rely on debt in the early days will only help more in the longer term.”
Of course, as an operation grows, reliance on savings may not always be possible.
“Raising capital has changed to some extent in the past few years. As we have grown in size, the need for a lot more capital became apparent. The best way was to raise funding in this case is via external shareholders. Approaching equity firms with a very detailed Information memorandum has worked for me.”
Michael Dixon will be speaking at length on funding and investing in hotels at the Pub Leaders Summit on 21 March. Make sure you grab a ticket to the conference and expo before tickets sell out at www.publeaders.com.au