How Much Does A Restaurant License Cost? What About The Lease? Inventory? Equipment?
Examining The True Cost Of Starting A New Restaurant
Fortunately, there’s a plethora of financial projection software specifically designed to examine the exact costs of starting and then running a restaurant. It will make an owner take into account all of the hidden fees – including how much a restaurant license costs, how much inventory you’ll need, what kind of equipment you’ll have to buy and more. Investing in software like this will also help an owner create a more accurate business plan when the time comes to knock on a bank’s door for a loan and enhance the business’ portfolio for potential investors.
Below are just a few of the most common costs for any startup restaurant:
- The Property Lease or Mortgage – from the monthly loan or lease payments to the security deposit;
- Opening Inventory – from foodstuffs to booze, all of this will need to be purchased and in place for the opening. Some vendors work on credit and will allow these costs to be financed. Depending on the owners’ credit standing, negotiating terms with vendors will be more or less difficult to manage, and more or less expensive from the start;
- Leasehold Improvement – in order to make the space able to accommodate your restaurant’s particular needs, you may need to hire a contractor to renovate by adding and subtracting everything from walls to electric and plumbing;
- Getting The Word Out – From business cards to ads in the local paper, online or on television, these costs can be significant. Hiring an advertising or marketing firm to do this for you is also pricey, but experts often garner the best results – so, provided the cash is available, this should be heavily considered;
- Printing – Menus cost money to design and produce;
- Utilities – From turning on the power and water, to phones and internet, these services cost a certain amount of money month to month, plus the one-time setup fees from the outset;
- Permits/Licenses/Taxes – Most restaurant owners don’t realize how much a restaurant license costs, much less the health permit and any other permits and fees charged by local authorities. To find out, it’s important to contact an attorney and the local Chamber of Commerce;
- Attorneys and other Professionals – Lawyers, accountants and business coaches all cost money. Don’t forget to budget them in;
- Restaurant Staff – Even if you’re just employing family at the beginning, your staff is likely not working for free. Plus, there’s the cost of payroll taxes and employee attire to consider;
- Restaurant Liability – Every restaurant needs to have some sort of insurance.
Of course, these are the most common costs associated with any restaurant and any particular establishment might have any of a number of other considerations. The key is to consider them at all, since flying by the seat of one’s pants rarely works well where money is involved.
Article source: Contributed by RestaurantNewsResource.com, a global restaurant news distribution service.
