If you’re considering entering the restaurant business, this free restaurant startup costs calculator can help you get started on a strong financial footing. By understanding the average cost to open a restaurant, you can more accurately plan how much funding you’ll need to open the business, and how much you’ll need to stay afloat until you become profitable.
Download our free restaurant startup costs breakdown calculator, then keep reading to get the answers to the most frequently asked questions about this topic, including “how much does it cost to open a restaurant?”
How Much Does it Cost to Open a Restaurant?
Before diving into all the startup costs for a restaurant, it’s important to know the answer to the question “how much money do you need to open a restaurant?” The answer varies greatly depending on your location, service style, menu, and other considerations. With that in mind, these are some restaurant startup cost ranges to keep in mind:
- Insurance: $4,450-$23,300
- Equipment: $180,000-380,000
- Renovations: $280,000
- Technology: $450-$1,500 for hardware and $50-$200 per month for a cloud-based POS
- Rent and utilities: 5-10% of your projected sales
- Inventory: 25%-40% of projected sales
- Labor: 25%-35% of projected sales
- Marketing and advertising: 25-35% of annual sales
What Is a Restaurant Startup Costs Calculator?
Keeping the above in mind, our restaurant startup costs calculator is a spreadsheet designed to help you understand and determine all of the costs that go into opening a foodservice business. It comes with four worksheets, including:
- Startup-costs: Figure out how much it will cost to open your restaurant. This sheet prompts you to think about things like furniture and equipment, rent and renovations, and much more.
- Revenue: Use this worksheet once you’re in business to understand your average, total, and daily revenue, and to determine your food vs. beverage sales mix percentage.
- Controllable costs: Calculate what running your restaurant costs in terms of the cost of goods sold, labor costs, and operational profit margin.
- Financial forecast: Import revenue and profit from the previous two worksheets, and consider your expenses to understand your restaurant’s financial outlook.
Why Should You Use a Restaurant Startup Costs Spreadsheet and Calculator?
A restaurant startup costs spreadsheet and calculator can help you get a full picture of your restaurant’s initial expenses, such as:
- Purchasing a commercial space or finding a place to lease,
- Furnishing and decorating the site,
- Procuring kitchen equipment,
- Buying dishware, glassware, and silverware,
- Installing a POS system and other technology, and
- Obtaining permits
When you anticipate all of the costs that go into opening a restaurant, you can get funding and finance your entrepreneurial venture more effectively. For example, you can take your calculations to the bank and use them to apply for a business loan. Or, you can present them to potential investors and business partners.
Furthermore, by determining these costs in advance, you can get a better idea of what to expect and what to prioritize. If you discover, for example, that you’ve allocated too much of the budget to seating solutions, you could shop around to lower those costs. Then, you can invest the difference in more important areas where you need the funds.
Ultimately, knowing all of the startup costs for a restaurant upfront can help you determine where you can save and where you need to spend more, giving you more control over your startup expenses.
To learn more about these investments and other costs to open a restaurant, download our free restaurant startup costs calculator.
