How Much Does it Cost to Start a Restaurant?

Venturing into the wonderful world of food is an exciting journey. Not only will you be testing out new recipes and pleasing the palates of many, but you’ll also create the perfect ambiance to accompany main courses, side dishes and the like.

Now, before actually opening your restaurant, you need to figure out a budget. Questions regarding the amount you have saved, how much you’re willing to spend and what amount you want left over will factor into this decision.

What exactly is the cost of starting a restaurant though?

The Figures:

Well, according to Forbes Magazine article entitled “How To Run A Restaurant: start-Up Costs” by Maureen Farrell, the amount will likely vary from $100,000 to $300,000. A large gap clearly exists between these numbers, and you want a better sense of toward which side your budget should lean. You’ll need to consider the following factors when estimating a more firm number.

Size of the Restaurant:

How big or small the restaurant shall be is a huge factor when determining the cost. A little beach side eatery with a few plastic tables and umbrellas will cost a good deal less than a formal restaurant with seating for hundreds of people as well as a space for large wedding receptions and other celebrations. Places that are more middle of the road will, of course, fall in between the two extreme price ranges.

Types of Materials:

Speaking of plastic chairs, the materials with which furniture are being constructed is another major component of the budget. All wood tables and chairs as well as an authentic fireplace will place your restaurant toward the higher end of the estimates. Additionally, building the exterior of the restaurant comes into play. On the lower side of the budget, you would be able to have folding chairs or plastic chairs and perhaps a counter or window where people order food and then take it back to their seats.

Restaurant Essentials:

Of course, you’ll also need commercial size stoves and ovens. If you serve some sort of specialty, such as brick oven pizza, you will need to factor in the cost of that equipment as well. In order to successfully open up the restaurant, you’ll also have to hire staff and decide what their salaries or hourly rates would be. These numbers are not included with the aforementioned start-up costs, so paying employees will be an additional expense. The type of food you’re serving will certainly change the price too. Buying burgers and fries is a lot less expensive than purchasing prime rib, fresh vegetables and all of the finest spices.

Permits:

You also must consider permits when you are starting up a restaurant as you certainly cannot open up a restaurant out of anywhere. Check with the local town and with the state to find out what you need to do to open up the restaurant. Furthermore, if you want to serve alcohol at the establishment, securing a liquor license is a necessity.

Starting a restaurant is an exciting endeavor that will hopefully provide you with many profits. Before you can start reaping the benefits though, you’ll need to be fairly generous with your bank account to start building up the business in the best way possible.

Estimates for Opening a Restaurant in South Africa:

160 Seater Middle to Upper Service Restaurant Out of the Box Cost:

Kitchen equipment R475 000.00
Refrigeration R275 000.00
Storage R75 000.00
Dining area (tables, chairs) R250 000.00
Sound and sight R75 000.00
Kitchen smalls R65 000.00
Dining room equipment R80 000.00
Signage R95 000.00
Shop fitting R525 000.00

Sub total R 1 915 000.00

This excludes vat as well as wet works. These numbers are based on current prices but can vary according to the type of quality products used. Franchise groups work on a per square meter charge of between R9 000.00 and R14 000.00 per square meter.

What has been your experience when starting your own restaurant? Leave a comment below.

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