Launching a restaurant business is undoubtedly a great choice because a lot of people enjoy eating out. However, the food services sector is highly competitive, with data indicating that about 60% of restaurants fail just after their first year. Therefore, entrepreneurs need a solid business plan before venturing into the restaurant industry in order to boost their chances of success.
Still, becoming a restaurant owner isn’t as easy as it seems since opening a restaurant demands much money, time, and effort. Several factors influence the startup costs of a restaurant business, so you could be looking at anything between $175,500 to $750,500. Below are some specific startup costs you should factor into your budget to determine exactly how much you’ll need to save to open your restaurant.
All restaurateurs incur operational costs when running their businesses, so these expenses should constitute a significant part of your startup budget. Generally, kitchen equipment purchases would take up much money, since you need equipment like dishwashers, freezers, ovens, and slicers to run your enterprise effectively. However, it is always best to avoid buying new equipment when launching your restaurants, since these can be very costly and aren’t the only great option around. Instead, explore used equipment and equipment finance options as cheaper and more convenient ways to diminish your up-front costs. Trustworthy restaurant suppliers such as The Restaurant Warehouse can offer more insights into finding the best restaurant finance and equipment funding options.
The Restaurant Warehouse sells durable restaurant equipment to food trucks, restaurants, and commercial kitchens across the U.S. Some of their equipment for sale include commercial ovens, sandwich prep tables, freezers, charbroilers, hot plates, grills, dishwashers, ice machines, deep fryers, and food truck equipment. Additionally, they offer restaurant equipment financing options where you finance equipment needed urgently for affordable, low monthly payments. Furthermore, their article on restaurant financing sheds light on various restaurant finance options in the foodservice industry.
For instance, the Small Business Administration (SBA) offers coronavirus loans to restaurants and small business owners. These loans come with no collateral and decent interest rates, and you can take up to three decades to complete repayment on an SBA loan. Alternatively, you can explore crowdsourcing as a way to obtain your restaurant funding. Furthermore, you can go to traditional banks for your restaurant equipment loan. In addition, family and friends, credit cards, investors, and silent partners with good credit scores are also some equipment financing options worth considering.
Modern-day restaurants undoubtedly require technology to make their enterprises successful, so factor these costs into your startup budget as well. A basic point-of-sale (POS) system is perhaps the most important technological tool to budget for. In addition, consider other tech products like inventory management tools and mobile POS systems that can help your restaurant realize its full potential. Furthermore, mobile apps and a functional website are critical to stress-free online ordering, so it is essential to invest in these solutions to boost sales. Experienced custom software developers such as EnderTech can help with this need.
As such, your business website’s visitors can enjoy faster and richer web pages. React JS is also one of the best choices by many WordPress developers to develop WordPress sites since it allows them more freedom. EnderTech can use this design tool to create the right kind of website for your business needs. What’s more, they are a leading ReactJS development company with years of experience that can complete your ReactJS dynamic app according to your deadline and budget.
Location is also an all-important factor that influences a restaurant’s success, so finding the right location is crucial. Generally, the perfect location has ample parking and enough foot traffic to increase the likelihood of people stopping by. Fortunately, you can explore plenty of options to site your restaurant in a favorable location that brings in good business and boosts your chances of success. You can open your restaurant in an existing building, acquire another restaurant, or transform commercial space into your restaurant. Also, you can construct your restaurant building from scratch entirely for a more personalized touch.
Many great tourist attractions, including the Gateway To The Blues Museum, rely on an excellent location to appeal to patrons. The Blues Museum is located in Tunica, MS, and music lovers can stop by on Blues Highway 61 to experience interactive exhibits. Additionally, you can learn about how African Americans made a living working in the Mississippi Delta, and the role played by Tunica in building the Blues genre’s legacy. You can even learn AAB writing style and record your own blues song, thanks to local bluesman Memphis Jones.
Your food costs will depend mainly on your menu, so be prepared to pay more for inventory if you adopt a broader menu. According to some experts, food costs at profitable restaurants can take up to 35% of sales, so it is always a good idea to look for ways to cut down this expense. Consequently, build a solid relationship with vendors in your area to ensure that you can negotiate with them to keep your ingredient costs down, ensuring your enterprise enjoys more profits. For restaurateurs, a profitable enterprise is undoubtedly a key goal since failure is rampant in this industry.
Therefore, it is essential to ensure that your restaurant ticks all the right boxes, from ambiance to staff workwear. It is also worth investing in great work clothes that help you cut a dashing professional figure as an entrepreneur. Fortunately, a quick search of “business casual women” will reveal casual blouses, pantsuits, skirts, dresses, khaki, and other work clothes that you can don during warmer months. Additionally, you can find turtlenecks, dress pants, blazers, sweaters, cardigans, trousers, and other professional attire that will be excellent work wardrobe additions.
In summary, starting a restaurant is a costly endeavor that all entrepreneurs must be adequately prepared for. The points above are some costs you should factor into your budget to know the exact amount you will need to open your restaurant.