Maybe you’ve dreamed of opening your own restaurant. You’re a great cook; you love to feed people – so this might seem like a great opportunity for you to use your natural talents and interests. One thing you need to ask – how much does it cost to open a restaurant? According to the website Lightspeed, a restaurant startup can cost at least $175,000.
Why does it cost so much? Here are the factors that you have to consider while calculating your startup costs.
Cost to buy or rent your space
You will need the right location for your restaurant. Of course, the better the space, the more it will cost. You’ll need a hefty down payment if you choose to buy a lot. On the other hand, rents can be volatile and cost more over time.
Utilities
Lights, water, gas, electricity – these all need to be paid for, so make sure to account for this in your monthly budget. Don’t forget to initial deposits with utility companies.
Equipment, Cooking Utensils, Dishes, and Other Supplies
Depending on the restaurant, you may need industrial equipment. You may also need special appliances such as a pizza oven. Make sure to include furniture and décor, including your exterior signage, your music system, decorations such as paintings or curtains – all of the things you’ll need to create the inviting ambiance you want. This includes not just interior décor but also exterior elements such as your paint job and patio area.
Training Costs
Chances are you won’t be able to do everything. Maybe you plan to do the cooking – but you’ll need wait staff. Or maybe you’ll need a sous chef to help you prep. While you may plan to hire experienced workers, the reality is that even an experienced staff would benefit from a training program based on your business model and goals.
Food
You can’t start a restaurant without this essential ingredient. Make sure you have adequate inventory for your type of restaurant. One consideration that many restaurant startups make is regarding liquor since this is often a large expense.
Marketing
It’s not enough to open your doors; you need to let customers know you are ready for business. Whether you advertise through traditional channels or hand out flyers, you’ll need to get the word out.
Planning for Contingencies
Unexpected events and expenses can occur, so it’s a good idea to have a few months of expenses on hand in case there are periods of lower sales or higher costs.
Necessary Paperwork
You’ll need to file the proper licenses and permits, get insurance, etc.
Professional Services
Not every restaurant needs to hire, say, an interior designer or architect. However, chances are you’ll at least want an accountant, and it’s probably a good idea to have legal counsel. Chances are you will also want to hire a skilled plumber or electrician rather than handling such repairs yourself.
Technical Costs
If you want a point-of-sale system or other technological features, you’ll have to add that expense to your overall cost.
All this planning is an important part of ensuring your restaurant’s success. You are more likely to turn a profit if you have a grasp of what you will need, and you’re more likely to get any necessary loans or financial assistance if you can show a meticulous plan.