The average restaurant startup cost is $275,000 for a leased building or $425,000 to own the building. Recurring monthly costs range from $48,000 to $75,000. (Sage, 2021). Knowing inventory levels keeps costs down. Doing weekly stock counts can add 10% to your bottom line yearly.
Funding and Budgeting
Starting any business has costs. Determine funding sources – either self-fund, loans or savings until profit. Quick-service restaurants are fast-food restaurants emphasizing quick service, not table service or extensive menus. Opening costs vary by restaurant type and scale. Forecast carefully, overestimating startup costs. Have 6 months operating expenses on hand. Know when your business becomes profitable.
Exploring Restaurant Startup Costs
According to a survey from Restaurant Owner, restaurant startup costs can range anywhere between $175,500 and $750,500. With careful planning, you can project your startup costs and ongoing expenses before applying for loans and financial assistance.
The median price of setting up a new restaurant is $375,000. This covers everything needed to open a restaurant, including equipment, furnishings, licenses, and permits.
In this article, we’ll break down the startup expenses and provide insights on managing your budget. Startup costs can vary depending on various factors like location, cuisine style, restaurant size, and concept. Rent an already existing commercial space with a similar plan to yours when possible to cut remodeling costs.
Capital Costs Breakdown
Restaurant startup costs range from $175,500 to $750,500 with the median being $375,500. Determine your funding sources and forecast your startup costs carefully. It is advised to have 6 months of operating expenses ready before opening.
Startup costs include:
- business permits and licenses
- equipment
- buildout and construction
- furniture
- signage
- security deposits
- inventory
- payroll
- marketing
- opening event
- contingency fund
Also budget for soft costs like payroll, software, professional fees, travel, office supplies, employee training, cleaning, and more.
Managing Ongoing Monthly Expenses
Ongoing monthly expenses can average from $48,000 to $75,000 and may cover:
- rent
- payroll
- food costs
- utilities
- maintenance
- accounting
- advertising
- credit card processing fees
- music licensing
- cleaning services
- security monitoring
- trash pickup
- pest control
- laundry service
- landscaping
- taxes
- insurance
- other services
Carefully budget all startup and monthly operating costs. Revenue alone does not guarantee success. Manage costs and aim to become profitable quickly.