If you read our page on how to create a budget for opening your restaurant, you know how to make a budget successfully, but do you actually know what you need to budget for? Let’s look at some of the larger costs associated with opening your own restaurant:
- The actual location; this is often one of, if not THE most expensive part of opening a restaurant, especially if you are looking at purchasing a building or land to build the building where your restaurant will be. The costs are not just rent/mortgage (and a down payment if buying is your thing) but also legal costs, land transfer, inspections and any repairs or upgrades that need to be done to get the building up to code- and that is before any renovations related to turning the building into your dream restaurant. Make sure you break down and consider each and every cost associated with the actual site to ensure you have the money set aside to do these things.
- Labour and staff; you will eventually need to hire and pay staff to serve your drinks and food. This is a cost that cannot really be avoided and will be crucial to the success and sustainability of your restaurant and therefore should be budgeted and accounted for upfront. There are different wages and requirements in different countries and regions, so be sure to look into this. One way to minimize labour costs is to consider part time employees who will be much less costly than full time employees. With that said, try not to cut too many corners as employees are your biggest asset and therefore biggest investment.
- Equipment, furniture and décor
You will have to budget to fit up your building with the necessary appliances and equipment to cook food, make drinks and do all of the basic things that make a restaurant a restaurant. You will also have to invest in furniture and décor to make sure people have a place to sit and enjoy their experience at your restaurant. Don’t forget a POS system to make sure orders make it from the wait staff into the kitchen
- Permits and regulatory requirements; there are different requirements and regulatory obligations such as liquor and food licenses that will be required to get you up and running so be sure to set money aside for these different obligations.
- Food and drinks; You will have to initially invest in developing the perfect menu which may involve spending money on trying different dishes, chefs, and drinks. Eventually, you will also have to have the money to spend on all necessary ingredients to make the food and drinks on your menu.