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How Much Does it Cost to Open a Restaurant?

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  • How Much Does it Cost to Open a Restaurant?

    Not only does opening a restaurant involve time, energy, and a lot of preparation, it also involves a significant amount of financial investing. There is no fixed price on the amount it costs to open a restaurant because the costs depends on a number of factors that include the size of the restaurant and the number of seats, location of the establishment, type of food being served, the equipment required, and the type of restaurant. Depending on what you want, it can range from as little as $25,000 to over a million dollars.

    Location: Fees to lease an establishment can vary not only to a local location, but also across the country. A large city may charge $40.00 per square foot, while a rural location may be cheaper. You also have to consider taxes, insurance, and maintenance costs which can vary. One industry standard is that leasehold costs run "about 9% to 11% of annual sales."

    Size: Costs can also vary according to the number of seats in the restaurant. A small dining establishment with 30 seats will cost much less than a large establishment with 200 seats.

    Type of Food Served: Costs will vary according to the type of food you serve. For instance, a lobster and steak restaurant will have higher costs than a fast food restaurant. The equipment costs will vary as well. For instance, equipment to make high end seafood meals can cost thousands of dollars. A small coffee shop will have minimum equipment costs. If you require a large walk in refrigerator/freezer, the costs can run up to $25, 000. The prices from restaurant suppliers will vary.

    Permits: You also have to factor in regulation costs. Maintaining all of the various governmental regulations such as health and safety codes can run you thousands of dollars depending on the type of permit and how much you need to do to comply. Permit fees range from several hundred to a couple of thousand dollars.

    Cosmetic Features: You will want your restaurant looking its best. This will include fixtures, paint, pictures, lights, table clothes, dinnerware...etc. Depending on what type of restaurant you have, this can cost you tens or even hundreds of thousands of dollars.

    Marketing/Advertising: To get your restaurant name out to the public, you have to spend money on advertising. This can include: radio, television, newspapers, magazines...and more. This is money that is considered an investment with the return being customers. It is a necessary expense to the success and survival of the restaurant.

    Inventory: You will need such up-front items as food, beverages, ingredients, cookware...etc. Depending on the type of restaurant, acquiring all of these items by opening day can cost a lot of money. It can run up to $10, 000 or more.

    The key to having a successful restaurant opening is to create a list of all of the costs involved. This will allow you to establish a plan with a sound budget that takes unexpected costs into consideration. By planning your restaurant carefully, you will have a successful and profitable opening that will be remembered by all those attending the event.

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