Cost to start a restaurant

Updated April 17, 2017

Determining how much money it will cost to open a restaurant depends on whether the restaurant will cater to posh dinner guests, individuals on a tight budget or something in the middle.

Planning to serve upscale dinner guests will require a sizeable investment in dining room furniture and accessories such as fine linen and table settings.

Identify how much money you have available to spend for the initial start-up and monthly expenses. Start by adding up all the anticipated expenses and document them in the business plan.

The Restaurant Business Plan

Developing a restaurant business plan starts with an idea of how much money you have available for an initial investment, the anticipated income and a projection of monthly expenses--and these will be determined, to a large degree, by the concept or theme for the restaurant.

A restaurant that serves gourmet food suggests an upscale concept or theme. A deli-type restaurant, buffet or fast-food restaurant suggests a casual dinning theme or concept.

The Restaurant Location

Finding a location within your budget and compatible with your planned theme is one of the most significant factors involved in the success of the restaurant venture.

Consider a location that is compatible with your budget and the comfort of your dinner guest. Any good restaurant location likely will cost approximately £1,950 a month to lease. Purchasing a restaurant location will probably represent a monthly mortgage payment of £1,950 to £3,250, depending on the purchase price.

Restaurant Promotion

Plan to join the local chamber of commerce and other network-marketing organisations to promote your restaurant. Advertising and marketing activities such as newspaper ads and samplings are among the most commonly used methods of promoting a restaurant.

Consider hosting network-marketing events at your restaurant. Compile a list of local business owners, members of non-profit boards of directors and local church members to an open-house event. Allocate £650 to £3,250 for an open-house event.

Kitchen Equipment

Buying or leasing commercial restaurant kitchen equipment does not have to be expensive. Commercial restaurant refrigeration, cook stoves and ovens can be purchased new or used. Plan to spend up to £6,500 on new restaurant equipment. Leasing restaurant kitchen equipment generally comes with a service contract.

Purchasing used kitchen equipment for half the cost of their new counterparts, without existing service contracts, may end up costing more in repairs in the long term.

Food and Labor Costs

Plan on spending a minimum of £650 on an initial food order. Buying foods that can be frozen is the most cost-effective because there is little chance of spoilage.

Hiring restaurant employees represents a monthly expense of no less than £3,250 a month for just three or four employees, including the restaurant manager.

Expect to spend a minimum of £16,250 to open a casual-dining restaurant and up to £325,000 to open a fine-dining establishment.

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