How Much Does It Cost to Open a Restaurant?

Startup costs for a new restaurant typically range from $95,000 to over $2 million. The actual amount it costs to open a restaurant depends on factors like your lease agreement, required permits, and renovation goals. Typical expenses include one-time purchases, like furniture and equipment, alongside ongoing costs, like rent and utility bills. Most small restaurants spend around $275,000 to open.

The figures below can help you ballpark your restaurant opening costs. We calculated these estimates from data compiled by organizations like the National Restaurant Association alongside price comparisons fromrestaurant suppliersand service providers.

Typical Restaurant Startup Costs

*This figure reflects a restaurant lease, since that is the most common. Read ourguide to buying a restaurantfor accurate figures of how much it costs to purchase a restaurant space.

Now that you have a general idea of the costs of opening a restaurant, let’s take a deeper look at each type of restaurant startup cost. We’ve listed the costs in a rough chronological order that matches when in the restaurant opening process you’re likely to encounter them.

Incorporating Your Business

• Business Registration:$25 – $2,000 (one-time)
• Doing Business As (DBA): $25 – $100 (one-time)
• Registered Agent(optional): $100 – $300 per year
• Business attorney(optional): $135 – $1,000 per hour

One of the first things you will need to do is file documents with your state to establish your business entity. The primary cost of incorporation documents will be your state’s filing fee. These fees range from $25 to $2,000, depending on your state.

You may also opt to list a service to act as your business’sregistered agent(RA), which is simply the person who is designated to represent your business in legal matters if you would prefer not to do it yourself. This would mostly come into play if you are opening a restaurant in a state where you are not a resident. These services typically only pass on your state filing fees; they currently don’t charge a markup.

许多创业公司餐厅使用业务律师to perform these steps. This makes the most sense if you are new to the restaurant industry, your planned restaurant business is complex, and need an attorney to perform other services, like drafting investor’s agreements or negotiating your lease. Alternatively, you can use a legal services site like IncFile or Rocket Lawyer to help keep you organized.

Most legal services companies don’t charge an additional markup above the cost of your state’s registration fees. If you are considering using a legal services provider, see our ranking of thebest online legal servicesfor options.

Commercial Space & Utilities

• Lease costs:$3,000 – $7,000 per month
• Revenue sharing (common):1% – 10% of total sales

A favorable restaurant lease is one of the most critical aspects of running your restaurant profitably. Your monthly lease costs will range from $3,000 to $7,000 per month for small to midsize restaurants. The price varies mostly depending on your location and the availability of commercial restaurant spaces; the fewer spaces available, the higher the rent is likely to be.

Many restaurant leases also request a revenue share—a percentage of your sales—as part of your lease agreement. This usually costs from 1% to 6% of sales—though in some competitive markets, it can go as high as 10%—and is paid once a month. If your landlord is requesting a percentage of sales, you should absolutely retain an attorney to negotiate the most favorable terms for you. Considering that restaurant leases can run 10 to 20 years, you’ll be saving thousands of dollars in the long run.

Utilities

• Electricity:$2,000 – $6,000 per month
• Water:$1,000 – $3,000 per month
• Gas:$1,700 – $4,000 per month
• Internet:$69 – $300

Restaurants also need to consider the cost of utilities. Your utilities like electricity, water, gas, and internet will be an upfront cost before you open. You need lights, water, electricity, and internet to test recipes, train staff, and pass your health and safety inspections.

Utilities are also an ongoing cost. Your ongoing costs for electricity, gas, and water will vary widely based on your restaurant size, traffic volume, and the fuel you use for cooking.

Renovations

• Renovation costs: $100 to $800 per square foot

Construction and renovation costs for a new restaurant are optional and can vary a lot. Your costs will depend on your building’s square footage, the quality of materials you desire, and the type of construction performed. Your costs will also vary based on the cost of building permits in your area (and whether the type of work you want requires them).

Frequently, these costs are referred to collectively as “build-out” costs. Restaurant build-out costs typically range from $100 to $800 per square foot. Your build-out may involve adding floor drains and electrical outlets for appliances, bringing restrooms up to Americans with Disabilities Act (ADA) standards, or installing a full commercial kitchen with fire suppression equipment.

Furniture, Fixtures, and Equipment (FF&E)

• Tables:$250 – $1,000 each
• Chairs:$50 – $500 each
• Servingware, glassware, cutlery:$3,000 – $20,000 (overall)
• Other front-of-house fixtures(lighting, counters, etc.): $3,000 – $20,000
• Kitchen equipment:$500 – $10,000 each
• Office furnishings:$300 – $1000 (overall)

Restaurants need a lot of different equipment and furnishings. Furniture, Fixtures, and Equipment (FF&E) includes all the furnishings that are not permanently installed into the building’s structure. To get an accurate idea of your full FF&E costs, consider each area of the restaurant separately.

Front of House (FOH) FF&E

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Kitchen FF&E

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Restaurant Technology

• POS System: $400 – $10,000 upfront; $0 – $300 per month
• Security system:$200 – $599+ for hardware; $10 – $80 per month for service
• Phone system:$500 – $2,500 upfront; $90 – $300+ per month
• Reservation/ waitlist system:$0 – $300 per month
• Misc. Other Software(inventory, scheduling, etc.): $0 – $300 per month per product

Restaurant technology has expanded rapidly in recent years, spurred by changing customer demand for contactless payments and the pressures of restaurant understaffing. The market is also incredibly competitive right now, which is good news for restaurant owners.

Most restaurant software—including restaurant point of sale (POS) systems—offer free trials or free subscriptions. And many types of restaurant software, from POS systems to reservation and inventory management apps, run on iPads or smartphones. So, you might only have to pay the cost of a few iPads, card readers, and receipt printers to get started.

Click through the tabs below for some other restaurant technology you’ll want to consider:

Permits and Licenses

• Basic business permits:200 - 5000美元+
• Health and safety permits:$500 – $10,000+

每个餐厅都需要一些基本的业务/mits and insurance policies. Many of these permits, licenses, and insurance policies are required by state or federal law. The list above gives a general picture of some ballpark expenses. Read through the sections below for a more detailed cost breakdown.

Depending on the size of your restaurant operation, you need to secure dozens of permits and licenses, from foodservice licenses to federal and state employer ID numbers, and even to building permits.

Some licenses require inspections, and some will need to be renewed annually or bi-annually. Besides that, certain permits are only issued to a licensed contractor (like building permits for a renovation), while you will be on your own to secure others.

These are some typical restaurant permits you may need:

If you have specialized equipment like a wood-burning pizza oven, you’ll need a special permit from the fire department. Many locations also require permits for having pool tables, live music, or selling tobacco products. Check your local laws for additional permits you may need based on your service style.

Insurance

• State and Federal Unemployment Insurance:3% – 7% of gross payroll, per pay period
• Workers’ Compensation Insurance:around $2.00 per $100 in annual payroll
• Business Liability:$500 – $5,000
• Commercial Automotive (optional):$1,800 – $2,400
• Employee Health Insurance:Varies

The risk of damage, injury, and loss can be higher in restaurants than many other businesses. Besides the protection that you’re required to purchase by law (like liability and workers’ compensation), you will need to look into different kinds of coverage based on your restaurant style.

For example, a restaurant that does a lot of delivery business needs commercial automotive insurance. Restaurants with bars need liquor liability included in their policy. Depending on your business size, you may also be required to provide health insurance to your full-time employees.

You can learn more about insurance types and costs by exploring our article,Small Business Insurance: Costs, Coverage & Industries.

Sanitation

• Garbage removal:$250 – $500 per month
• Grease removal:$115 – $1,200 per pump (usually every 28 days)
• Pest Control:$100 – $200 per visit (typically every two weeks)
• Commercial Cleaners (optional; recommended): $50 to $150 per hour

If your restaurant is in a strip mall or shared commercial building, your lease may include garbage removal (and sometimes recycling) services. If you are based in a standalone location, however, you’ll need to retain these services yourself. The size of the dumpster you require will vary based on your customer volume. Prices vary based on your location, number of pickup days per week, and dumpster size.

The table below shows sanitation industry recommendations for dumpster size based on your customer volume and the prices shown are based on a once-weekly pickup.

Grease removal, pest control, and cleaning are also costs of keeping your restaurant sanitary. Click through the tabs below to learn more about these costs.

Staffing Costs

• Posting on job sites:$0 – $100 per listing
• Starting salaries:Varies
• Training wages:around $1,200 per person
• Payroll tax:around 8% of staff wages and salaries

You’ll need staff to cook and serve your food. So your first employee-related expense will be the cost of posting available positions on job sites.

A startup restaurant will also have the additional expense of paying those staff members for a week or two for training and recipe testing before opening. As such, you’ll need to budget for those funds before you have any sales to offset them. If you have salaried employees, like an executive chef or managers, you’ll likely onboard them even earlier—possibly months before your opening. And you’ll also need to budget for your portion ofpayroll taxes在这些工资。

Starting Inventory

• Food:$2,000 – $20,000+
• Nonalcoholic beverages:$500 – $1,500
• Beer, wine, and spirits:$2,000 – $8,000+
• To-go containers:$100 – $500
• Paper supplies:$100 – $500
• Cleaning supplies:$200 – $500

Before you officially open, you will need to purchase the food and beverages you plan to sell to customers. The amount you spend on opening inventory will depend on your expected customer traffic, the type of food you serve, the amount of storage space you have, and your ability to negotiate competitive prices.

You’ll need to open accounts withfood and beverage suppliersto place your first orders. As a new restaurant without a payment history, most vendors will request that you pay for your full order in advance or with a check as soon as the order is delivered.

Supplies also include paper products like napkins and takeout containers. And don’t forget cleaning supplies like paper towels, hand soap, and ware-sanitizing solution; these are requirements to pass a health inspection in most places.

Capital and Contingency

As a new restaurant, you will have additional expenses in your early months. Until you have a sense of what your busy times are, you may over-schedule your staff. Until you see what menu items are most popular, you may over-order on supplies. You’ll need to reserve some capital to cover your initial operating costs until your restaurant begins to earn a profit.

To be on the safe side, you should set aside six months’ worth of operating expenses and reserve 10% of your total revenue for contingency. That way, your restaurant can stay solvent until it starts generating significant cash flow. As with most of the costs of starting a restaurant, how much you need for capital and contingency will vary.

The table below gives you a ballpark idea of the recommended contingency amounts for different restaurant types.

雷竞技app

• Website build:$50 – $20,000
• Website hosting:$1 – $27 per month
• Domain Name:$9 – $20 per year
• Press Release Distribution:$99 – $400+
• Social Media Advertising:$200 – $2,000

Ensure that when you reach the home stretch, you have funds available to let your community know about your new restaurant. You can spend as little or as much as you want on marketing your new restaurant. Purchasing targeted ads on social media platforms like Facebook and Instagram is a popular, low-cost way to announce your opening.

Placing ads in local papers orwriting a press releaseanddistributing itto local news outlets is another excellent option. This generally costs more, but it is worth it if you can afford it.

Optional Costs

In addition to the costs mentioned above, there are other services you may opt to use to get your restaurant open. These services can add to your restaurant opening costs, but if you have a complex concept or are operating in a major metropolitan area like New York City, Chicago, or Los Angeles, the extra expense can save you a lot of headaches.

Professional Services

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Franchise Costs

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Restaurant Startup Costs Frequently Asked Questions (FAQs)

Is owning a restaurant profitable?

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What is the most expensive part of owning a restaurant?

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How much does a small restaurant make in a day?

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What are typical restaurant operating costs?

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Bottom Line

How much it will cost you to open a new restaurant depends on your restaurant style and location. Whether you are moving into a raw commercial space or one that has previously been a restaurant will determine your construction and renovation costs. Whatever your restaurant’s style or location, you should set aside three to six months’ worth of operating expenses to ensure you have enough cash flow in the early days. You’ll need between $95,000 and $2 million to start a restaurant; most new restaurants spend around $275,000 to get open.