Business Start-Up Costs for A Restaurant

How Much Does it Cost to Start a Restaurant?

Set up expenses for a small restaurant business are significant when compared to other business models and it can be difficult to start up for under $100,000. The average startup costs for restaurants in average can vary from a few thousand dollar up to a few million dollar. Let’s look at a few of the start up expenses that you could be up against as you plan to open your restaurant and how you can go about carefully budgeting to make the most of your start up funds.

One of the key reasons for new restaurant failure is a lack of cash flow, six to twelve months down the track. The fact is that for most restaurants income growth rates will be slower than expected so you must keep cash available to support your restaurant until you become established.

Firstly you should not allow sales associates to talk you into the latest equipment or fittings. Purchase only what you need and increase purchases as you gradually grow your business. Shop around for bargain prices on the internet or at auctions.
The major costs are to do with securing a suitable location. Expenses can vary dramatically here depending on whether you rent, buy or even build your building. Then you will have refurbishment costs in addition to continuing utility expenses to think about.

If you are looking for a space for your restaurant then now is a good time to do this as you should be able to find some bargain prices with the current economic situation.
Your city will have health, business and zoning regulations and you have to get an accurate idea of what these involve so that you can allocate funds for permits and other formalities.
You may well have to hire consultants to advise you during the start-up phase and beyond and their substantial fees may be able to be offset by the help and direction that they can offer.

It will be necessary to fully kit out a commercial kitchen. As soon as you know more about the seating capacity and the dishes that you intend to serve you can seek opinions online from websites about restaurant equipment whether if you are looking for commercial combi ovens or fryers, you can find what you need.

Dining room, reception area, and restroom needs also require a lot of thought. You will need to purchase all of the furniture, serving equipment and table settings to suit your theme and you need to request kitchen plumbing services to install your equipment.
Many restaurant owners notice stock always being taken, so you need to consider installing systems to track and protect inventory. Systems for taking customer orders and passing them on to the kitchen and systems for processing payments are also all part of the restaurant game these days.

You will need to have a brand name designed for use on signage and menus. Promotion costs can also be extended as you need to start advertising well in advance of the opening day and pretty much keep on testing new methods until you discover a way to bring customers in on a regular basis and have become well known in the market.
Go out to eat at a restaurant and take a look around, and you will be astonished at how there are so many small items and costs that you would never think about.
From commercial refrigeration to staff uniforms, your list of estimated restaurant start-up costs will depend on the volume of your business, your theme, seating capacity and the market niche that you are targeting.

Calculating set up costs is one thing, but you should also identify the ongoing fixed costs which involve purchases of foodstuffs and supplies, rent, payroll and advertising costs. These costs will have to be paid whether your restaurant is full or not, so you need to have capital put aside to cover them if revenue is worse than expected.
Set out a plan for funding your restaurant, carefully budget your seed capital and be sure that you have emergency financing sources if necessary.

Start your restaurant off the right way be ensuring that you thoroughly comprehend the start-up and running costs that you can expect to incur. Don’t go too far into debt right away as you may need access to credit while you get through the difficult period that every business goes through in the beginning. Entrepreneurs that accurately estimate costs and budget accordingly have the best chance of emerging with a successful restaurant.

Julia