For new restaurant owners, opening one is not an easy task. You have to come up with both a strategic business plan and an effective marketing plan, find the perfect site for your restaurant, and then you need to open on time while managing all of the challenges that come with running this type of food service business.
That's why we created this checklist for opening your restaurant: a survival guide that will help you get from clueless to confident by your opening date!
Why start your own restaurant business?
Having a restaurant is not about the money, it's all about living your dream! Opening your own business will give you the chance to make your ideas happen, on your terms and timing. The restaurant industry is still recovering and there are great opportunities to open a successful business. There are many reasons to start, but most importantly is that you do it out of a passion for good food and seeing smiles across your future employees' and your customers' faces.
It's possible for restaurants with limited budgets or experience to find success in this industry. It doesn't have to be too difficult or expensive for you to open up that little spot in town with amazing food and great service. However, even money can't solve everything, because proper restaurant planning is what leads you to your goal.
The checklist of successful restaurants will help you prepare for the day that has come, but it's never too early (or late) to start planning! Take time beforehand to explore ways this type of project may be connected with what you're currently doing.
The investment in starting a restaurant
If you're on the fence about starting a new restaurant business, the startup costs are probably one of your most pressing concerns. So, how much does it cost to start a restaurant and what are the associated expenses?
There is no easy answer to this question, as it depends on several factors such as the type of restaurant you want to open, its location, and how big it will be. Do you plan to offer in-restaurant dining or exclusively takeout and delivery services?
Identifying these aspects and calculating the associated expenses of establishing and running a restaurant can assist you in determining how to boost sales.
Based on estimates:
- If you want to have a small restaurant/bakery, then your startup costs budget will be around $30,000.
- A larger restaurant with a bar might cost about $200,000 - 300,000.
- An upscale restaurant could cost as much as $500K or more for the startup costs
Not every restaurant needs millions to start and you don't have to start with an expensive location, but be prepared for unforeseen costs such as food, security systems, equipment financing, furniture replacements, and more. With equipment financing, your monthly payments are usually secured by a fixed interest rate that doesn't change over the course of the loan. This makes budgeting easier and can help you avoid payment shocks down the road.
Do not forget about taxes (Income Tax, GST/HST, PST, CPP, and EI). Everyone has to pay these amounts, including the employer! The costs will depend on how many employees you have working in your restaurant. Remember that if you hire people to work for tips, then you are only responsible for paying the minimum wage.
However, investing your time and money in restaurant management will only bring you more profit in the long term. If you need more information about cutting down on your operating costs, properly managing orders and inventory, food and beverage costing, and other useful money-saving tips, we have other blog posts you may be interested in!
As for now, we will give you the checklist you've been waiting for...