Have you ever dreamed of owning your own restaurant? Maybe you’re a sous chef with a desire to become a head chef and run your own bistro.
Perhaps during the COVID-19 lockdown, you realized you have some insane cooking skills?
Whether you fall into the above calories or not, you’ve probably thought to yourself at some point, “What’s the cost to start a restaurant?” The answer can vary depending on several factors.
If you want to learn more about it, read on.
Location, Location, Location
That’s right. We’ve all heard that phrase before, and it certainly rings true. Your location can not only make or break your bottom line, but it can also add to or reduce costs.
If you’re in a prime spot, you’ll have a steady business without even trying. However, it’s going to cost you. Along with that, it also matters what part of the country your restaurant is located in.
Most of the time, downtown commercial real estate and rent will be the highest.
There are also some other places that will have high rent too, places such as Beverly Hills, Hollywood, and other posh, hip, or “place to be seen” locations.
You’ll need to decide if you can afford these places, or you need to strategize for a restaurant in a less popular area and figure out a way to bring customers to your tables.
Cost To Start a Restaurant
According to a recent survey, it cost an average of $375,500 to open a restaurant in 2020. If you want to break it down per square foot, that’s around $113.
Construction costs will take up the bulk of your startup budget. Those will average $200,000. Median construction costs take up 57.9% of all startup costs.
Once you’ve secured funding and a location, it’s time to worry about getting the proper equipment. A good restaurant owner knows the importance of his or her tools, as do chefs, dishwashers, and servers.
You should do everything you can to purchase or attain the best equipment possible.
Ovens, silverware, commercial deep fryers, sanitizing equipment, among other tools are a long-term investment and should be treated as such.
The average kitchen and bar equipment for a 3,000 sq. ft. kitchen will run you $95,000 initially.
Preopening Expenses
Similar to when you move into a new home, there are always extra costs that come up. With starting a restaurant you need to take care of most of that before you open your doors.
Startup fees or administrative charges are $100-$250. Then, you have to purchase insurance which can be up to $6,000 per year. A food service license will cost you about $100-$1,000 depending on where you’re located.
A beer and liquor license will cost about $3,000-$5,000. A full-service liquor license will cost around $12,000. Don’t forget to factor in your salary, and any renovation costs needed.
Ready. Set, Go
Now you know the cost to start a restaurant. You’ve got the business, and cooking skills or both so go out and make it happen. If you want some more great advice, check out our Tips section.
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