How Much Does it Cost to Open a Restaurant

How much it costs to open a restaurant is a difficult question that can't be answered without gathering all of your information.

Like houses, restaurants vary greatly in price. Are you leaning towards a quick-casual joint, a full-service establishment, or perhaps something more upscale like fine dining? Each category has its own set of financial implications.

Then there's the matter of logistics. Will you be leasing or purchasing your space? Is it a second-generation restaurant, or will you be building out a shell? How much TI will the landlord give you? Are there any Economic Development incentives that you can capitalize on?

Some restaurants will need to incur major expenses that others will not, such as grease traps, vent hoods, expensive cooking equipment, recipe development, and extensive training plans.

But let's not overlook the aesthetic details. FF&E (Fixtures, furniture, and equipment) can cost as much as the space's buildout. From chairs to speakers and everything in between, they all have a cost, and they are significant. Knowing where to buy and how to use the failures of previous restaurants can save you hundreds of thousands of dollars in start-up costs.

Of course, the size of your space plays a pivotal role. Does it align with your seating requirements, or will modifications be necessary?

And that's not all. There's the matter of contingencies for construction overruns, working capital, initial inventory, uniforms, insurance, workers' comp, payroll training, office supplies, and so on. Oh, and don't overlook lease and utility deposits or the need for interior and exterior signage.

Marketing is another crucial consideration. Pre-opening expenses and a well-thought-out marketing plan for the first year of operation are essential for success.

In my experience, the start-up cost of a restaurant can vary significantly depending on numerous factors. I have seen restaurants start in a second-generation space for less than $100,000, and I have seen a space take 12 million dollars to build out.

For instance, a modest 1,500 square foot restaurant could easily tally upwards of $300,000.00 in start-up expenses. Before diving into any restaurant endeavor, please contact us and let us look at your plan and its feasibility. We have experts that can help you raise capital and prepare your business plan. I have seen too many restaurants run out of money before they were ready to open and either launched a partially finished project or locked the doors before they were ever open.