How Much Does it Cost to Start a Restaurant? – 5 Major Points to Consider

How Much Does it Cost to Start a Restaurant? – 5 Major Points to Consider

Obviously you have to know how much does it cost to start a restaurant if you want to get into this kind of business. You can calculate the estimates but starting up a restaurant depends on some factors. These factors can also depend on where you choose to open your restaurant.

Restaurant Size – It would cost you an average of $100 per seat if you’re going for a small restaurant that will have around 30 customers. While a bigger setting of around 250 people might spend an average of $300 per seat. Of course the cost would be higher if you want some custom made tables and chairs.

The smaller restaurant might be good with 900 square feet of space and the bigger ones might need around 11,000 square feet to meet their goals. Generally you have to consider 30% of that space is allocated for your kitchen, storage and other needs.

Location – There is a very big difference when it comes to the cost of the lease in different parts of the country. In one area you may be paying $15 per square foot, while in the downtown city you can end up paying $40 per square foot. Many landlords will ask fees for basic maintenance, insurance, land taxes on top of the basic lease cost which can have you spending $5 to $16 more per square foot.

One that’s common in this industry is that the cost of the lease should be about 9% – 11% of the yearly sales. If you think that you would be spending a little more than the average, then you should be very careful because the restaurant business run on small profit margins.

Cuisine – What meals are you going to provide? If you’re planning in opening up a fine dining steak or a seafood house then your meals would be expensive and you’re also going to need an expensive equipment to prepare and store them. On the other hand, you only need some basic equipment if you’re going to setup a small coffee shop.

Equipment – A high temperature charbroiler for beef and pork costs around $2,000 to $5,000. A small scale charbroiler for chicken starts from $1,600, while the cost for a convection oven is $4,000 to $6,500. You can also go for second hand equipment but you have to take a close look if they’re still in good working condition.

Regulatory Permits – Most of the time new owners don’t pay too much attention on the costs of permits and making sure that their restaurant is in accordance with health and safety codes. Getting your health and safety permits can cost you around $790 to $1,900 and this will depend on the needs to improve your restaurant.