5 Start Up Costs To Consider Before Starting A New Restaurant
If you have dreamed of owning your own restaurant since you were young, you will be disappointed to know that the start up costs can be hefty in making your dreams become a reality. Starting a restaurant will take a huge investment and if you do not have the necessary capital to not only start the restaurant, but to also bare the running costs until you start making revenue, then your restaurant will quickly fail. Have a look at five of the costs to consider before starting your own restaurant.
Finding the perfect location for your new restaurant could prove to be difficult as you’ll not only need to find somewhere populated, but you’ll also want to find a location where competition isn’t too high. The costs when it comes to premises will vary greatly depending on the location and the size of the premises, and also if you decide to rent or buy the premises, but you can be sure it’s going to require a big deposit either way.
One of the most expensive parts of starting a new restaurant is when it comes to the refurbishing. You may have to completely gut the premises and then hire contractors to come in and do their business. You will have to think about new restrooms, a new kitchen, new flooring, as well as plenty of other things to make sure the place looks attractive enough to dine in. You could easily spend $100,000 on just the refurbishment alone, which means you are going to need a big investment to start your restaurant project.
You will need to buy new furniture and appliances for the kitchen, which is going to be expensive, but you’ll also need to buy furniture like tables and chairs for the main restaurant area. A good step to take here is to buy restaurant chairs online, as it will be a fraction of the cost of buying furniture from your local furniture store. You could also do the same for tables and the other bits of furniture to make customers feel comfortable. As well as the furniture needed to make the restaurant work, you may even want to buy ornaments and pictures to make the place look more attractive.
This would be more of a running cost than a startup expense, but you will need to make sure you have enough capital to pay staff wages for the first year until you start getting enough revenue to cover them. You will need to pay managers, chefs, bar staff, waiters, cleaners, and maybe even a handyman to keep the place in tip top condition. Staff wages will be a big cost so you will need to start earning revenue as soon as possible to bear the costs, otherwise you could end up being in a spot of bother. Restaurants provide no revenue guarantees either, so even if you do make a big investment, it could quickly dwindle into nothing.
As well as all of the above you will also have to consider the costs of buying food and drinks from the suppliers, and also the need to buy new cutlery, glasses, plates, and much more to ensure your restaurant works the way it should. The initial start up costs of a new restaurant should be thought of in great detail otherwise you could miss important expenses that may end up proving costly. As you can see from just a few of the costs listed above in starting a restaurant business, it’s going to take a very big investment to get the business started, but it will also take another big investment to ensure the running costs are covered for a long period until the restaurant becomes a success.