Crunch The Numbers Carefully Before Starting a New Business
Getting a new restaurant off the ground takes more than hard work and determination: You also need a lot of money. Indeed, cash flow problems top the list for reasons why small companies go under. It’s difficult to predict how much revenue a new business will bring in at first, but expenses are a little easier to calculate. Below is an overview of the obvious and less obvious expenses associated with opening a new restaurant.
The Costs of Opening a Restaurant
The total cost of operating a restaurant can vary greatly depending upon location and dozens of other factors. Surveys suggest that the median cost of opening a dining establishment in the U.S. is about $275,000, but that number can easily soar into the millions for larger cities. Nonetheless, these are the major expenses that all restaurant owners must consider.
In addition to cookware, you’ll also need a point of sale system, coolers and cleaning supplies. Given the high costs of such items, it may be smarter to lease equipment when you’re starting out. A financing company that specializes in restaurants can hook you up with everything you need at a set monthly price.
Getting the word out is important, but hiring a professional sales team upfront may be a waste of money. A strong social media presence pays off more than TV and print ads these days.
In addition to monthly rent, insurance and utility bills, you’ll likely spend a pretty penny on decorating and remodeling your space before you open shop. If you’re a brand new business, expect to pay hefty deposits to utility companies. When making a budget, set aside funds for the emergency maintenance issues that will inevitably arise.
On top of food, you’ll need straws, cups and serving utensils. Try to make connections with local farmers to secure good prices on fresh produce.
Before you start serving, you’ll need to spend time and money on training employees. There are specific labor laws regarding food service workers, so you should consult a lawyer about your payment practices.
6. Legal Fees
Speaking of which, you’ll need ongoing legal help. Find a lawyer you trust early on to make sure you get all of the permits and licenses you need.
Let Ellicott Development Find the Perfect Spot for Your Restaurant
If you’re looking for an ideal place to open a restaurant, Ellicott Development has access to dozens of high traffic properties throughout New York and Western Pennsylvania. Contact one of our commercial realtors today so they can begin looking for the perfect restaurant spot for you.