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Restaurant Startup Costs: The Real Cost of Opening and Operating a Restaurant

Restaurant Startup Costs: The Real Cost of Opening and Operating a Restaurant

According to a survey from Restaurant Owner, restaurant startup costs can range anywhere between $175,500 to more than $2 million. That’s a huge range—how do you know exactly how much money you’ll need? 

With a lot of careful planning. 

Thanks to razor-thin profit margins, high operational expenses and fierce competition, one of the best things you can do to assure that your restaurant will eventually turn a profit is to anticipate your startup costs and projected ongoing expenses before applying for loans and financial assistance.  

In this post, you’ll learn how to project the following costs for your restaurant-to-be: 

Once you project each of these expenses, you’ll have a good idea of how much it will cost you to open and operate a restaurant. Let’s dive in! 

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Restaurant expenses vs. restaurant costs

Before we jump into restaurant startup costs and expenses, it’s important to clarify the difference between the two. 

A restaurant expense is a recurring payment like rent, food costs, payroll, marketing and utilities. A restaurant cost is any one-time expense for things like kitchen equipment, dishes or furniture. 

Restaurant startup costs

Restaurant startup costs
Category Details
Commercial space – Leasing: 3-6 months’ rent as deposit, e.g., $17,700 – $35,400 for downtown Los Angeles
– Buying: 15%-35% down payment, e.g., $150,000 – $350,000 for a $1 million space
Renovations & decor – Varies greatly; $5,000 for basics to $50,000+
– Aim for essentials first; potential for DIY savings
– Custom kitchen build-out can reach $250,000
Kitchen appliances & equipment – Essential and non-essential items; average cost around $115,655
– Includes kitchen and bar equipment, furniture, tables
Restaurant technology – Software (POS, KDS, etc.): Starting at $89/month
– Hardware (iPads, payment terminals, etc.): At least $1,000 upfront, ~$400/month for licenses
Licenses & permits – Food service license: $100 – $1,000
– Liquor license: $3,000 – $400,000
– Other permits (business, health, entertainment, etc.) vary
Marketing prior to opening – Essential for brand awareness; costs vary based on methods
– Digital and social media marketing more affordable; traditional methods more costly
Miscellaneous/unexpected costs – Construction mishaps and emergency funds
Administrative charges – Business entity formation, franchise taxes, legal fees: Total $950 – $5,350+

While the cost to open a restaurant will fluctuate depending on whether you decide to rent or own your space, renovation costs, which equipment you need and more, the things each restaurant needs to buy before opening their doors largely falls into these categories: 

  1. Commercial space
  2. Renovations and decor
  3. Kitchen supplies and equipment
  4. Restaurant technology
  5. Licenses and permits
  6. Marketing costs prior to opening
  7. Miscellaneous and unexpected costs

1. Commercial space

There are two ways to secure commercial space for a restaurant: leasing and buying.

When you sign a commercial lease, you’ll need to commit to several years of occupancy at once and pay a refundable deposit—usually three to six months’ worth—to secure your spot. 

So how much should you save for a deposit? Well, that depends on where you set up shop. 

The average rent for a restaurant space in downtown Los Angeles, for example, is $2.95 per square foot. For a 2,000-square-foot space, this rate translates to $5,900 each month. In this scenario, you’d need to have between $17,700 and $35,400 for a deposit. 

If you’re buying a commercial space you should expect to pay a downpayment of between 15% and 35%. A space valued at $1 million, for example, would require a $150,000 to $350,000 down payment.

2. Renovations and decor 

Once you secure a space, it will likely need to undergo some renovations before it’s ready for the public. 

Renovation and decor costs vary greatly depending on your restaurant’s concept, your target market and the condition of the commercial space you inherit. Few spaces are turn-key upon purchase. Even a property that used to house a restaurant and is already set up for kitchen equipment, refrigeration, and running water may require extensive renovations to create an appropriate appearance. Renovations can cost anywhere from $5,000 in paint, window treatments and flooring to $50,000 or more.

Our suggestion? Invest only in the essentials from the get-go: The seating, lighting, bar, kitchen service area first. 

While you may want an espresso machine imported from Italy, is the cost justified? Unless the answer is a resounding yes, consider pushing back non-essential expenses until you’re sure you can take them on without sacrificing liquidity. 

When shopping for property, attempt to find an option that is already built out for food service use. A customized kitchen build-out can cost as much as $250,000—a significant expense many new restaurant owners aren’t prepared to accommodate.

Set a budget of what you’re comfortable spending on renovations and stick to it. If you’re feeling thrifty, there are plenty of DIY restaurant decor ideas that can help you add personality and charm to your space without breaking the bank. 

3. Kitchen appliances and equipment

Opening a restaurant also requires investing in all of the appliances and equipment you need. In your restaurant, you’ll likely need: 

  • Kitchen equipment: Ovens, stoves, fridges and freezers, dishwashers, etc. 
  • Cooking equipment: Pots, pans, cutting boards, pasta cookers, strainers, ladles, etc. 
  • Workspaces: Counters, prep tables, steam tables, cold food tables, etc.
  • Bar equipment: Mixers, cocktail shakers, ice cube machines, etc.
  • Service equipment: Serving trays, plates, tablecloths, utensils, glassware, etc.

It’s important to make the distinction between essential and non-essential kitchen appliances and equipment. Which ones do your servers, hosts, bartenders, barbacks, dishwashers, line cooks and chefs need to do their job effectively? 

Invest in the essentials from the get-go, otherwise, your staff will run into challenges during service that may detract from your guest’s dining experience. In general, expect to spend an average of $115,655 for kitchen and bar equipment

Furniture and tables can cost $40,000 alone, so be sure to plan accordingly.

4. Restaurant technology

Modern restaurants need technology to operate efficiently. Tech helps restaurants run more efficiently by automating processes and collecting data that can help optimize both front of house and back of house operations.

 You’ll need both software and hardware to run a successful, modern restaurant. We recommend starting with this software:

Technically, a point of sale (POS) system is non-negotiable. You need a POS to record your sales and take payments, among other things. 

A POS system can be either integrated or non-integrated. An integrated POS system seamlessly connects all of the tools and systems you use to run your restaurant and the whole system works as one. In this system, your employee scheduling software and your POS talk to each other and your data and reports are aggregated and then generated from a single source of truth. 

In a non-integrated POS system, your third-party apps stack on top of your POS and work independently of it. With this type of system, you’re going to spend a lot of time checking and calculating the numbers between different systems. 

“With Lightspeed, it’s one software doing everything for me. Before, I was using four softwares just to complete one task. Here I can do so many tasks with just one software. It’s amazing.” — Rohit Sharma, General Manager, Bar 404

This is the hardware you need to open a restaurant:

  • iPads or tablets for your POS and kitchen display systems – prices vary greatly depending on brand, model and whether it’s new or refurbished
  • Payment terminals – prices vary greatly
  • Receipt printer – $100+
  • Cash drawer – $20+

Many restaurants are also investing in handheld point of sale devices that can streamline orders and payments in the front of house, helping waitstaff serve faster and spend more time on the guest experience. 

Expect to spend at least $1,000 on restaurant hardware and set aside about $400 each month for software licenses.

5. Licenses and permits

In order to legally operate a restaurant, you’ll need to obtain certain licenses and permits. Since licensing requirements can vary from state to state and even city by city, check your local regulations to make sure that you’re covered.

Most municipalities require restaurants to have a food service license. This license is governed by the local health department, which will stop by your restaurant from time to time to ensure that your kitchen is up to code. Food service licenses cost between $100 and $1,000.

If you plan to serve alcoholic beverages at your restaurant, you’ll need a liquor license. These licenses can take up to six months to be approved, so don’t wait until the last minute to apply for one. A liquor license can cost between $12,000 and $400,000 with a beer and wine license costing as little as $3,000.

Any employee who works with food in your restaurant will need a food handler’s permit, which ensures that they know how to safely handle and store food. In the United States, a food handler’s permit costs between $100 and $500 and can be obtained online in most municipalities. In Canada, the cost and process vary by province.

Other permits and licenses that you might need to open your restaurant include a business license, certificate of occupancy, sign permit, building health permit, live entertainment license, music license, resale permit, dumpster placement permit, seller’s permit and valet parking permit.

Administrative charges

To begin commercial operations, you will need to form a business entity, submit fees to your state of residence, pay franchise taxes, and work with an attorney to ensure all legal needs are met.

Most companies choose to incorporate or become a corporation, a legal structure that offers significant protection. This process can cost $100 to $250 in filing fees, depending on the state. Franchise tax fees can cost an additional $800 to $1,000, with government filing fees adding an extra $50 to $100 to your expenses.

For businesses that choose to work with an attorney to make sure all requirements are met, you will also have to pay legal fees. Depending on the work necessary, legal bills can range from $1,000 to $5,000 or more. If any other fees or filing requirements apply, your attorney can help you navigate these as well.

6. Marketing costs prior to opening

Build it and they will come, right? Sadly, it’s not that simple. Your brand new restaurant will need marketing help to draw customers on opening day and beyond. 

Not setting a budget for marketing and PR is an oversight that many new restaurateurs make. You’ll need someone who can create your restaurant’s website, design your logo, manage its social media presence, respond to customer reviews and work with influencers.

Marketing on a budget 

For small businesses without thousands to spend on marketing, social media and digital strategies can be very valuable. They offer a good balance between affordability and reach of potential customers—promoted ads costing no more than a few hundred dollars.

Social media goes hand in hand with a robust digital presence. Make sure your restaurant has a website utilizing a responsive design for mobile compatibility, and ensure all content is high quality and adheres to current SEO practices. If you have experience with writing, you may be able to do this independently, but if you’re not sure you’re up to the task, outsourcing to a freelancer can be very cost-effective, often $500 or less. Target local directories and review sites as well as free advertising avenues to build your reputation as a destination worth visiting.

If you’d like to utilize more traditional options, like radio and TV, your marketing budget will need to be more substantial. The average regional radio campaign costs $20 to $80 per ad spot on the airwaves, while a costly TV ad can require a total of $200 to $1,500 per 30-second spot on a local station.

7. Miscellaneous and unexpected costs

Besides what we’ve already discussed, there are also overlooked or unexpected restaurant startup costs that can carry a significant price tag. While it helps to be aware of what they are so you can plan better, don’t let them discourage you from your goal of becoming a restaurant owner.

Unexpected restaurant startup costs can include things like construction mishaps. Having to move unforeseen electrical or plumbing equipment can both delay your restaurant opening and hurt your wallet. Work in some buffer funds into your budget to make sure these unexpected restaurant costs won’t tank your plans. 

Restaurant fixed expenses

Restaurant fixed expenses
Category Details
Rent & building fees – Monthly rent and building fees depend on location and square footage but are usually fixed in the lease agreement
– Advisable to have an attorney and accountant review the lease for potential issues and budget fit
License fees – Initial costs plus fixed annual renewal fees for required licenses and permits
Insurance coverage – General liability, product liability, liquor liability, workers’ compensation, commercial vehicle insurance, restaurant insurance, loss of income insurance
– Cost varies based on size, function, and location; roughly $6,000 per year
– Importance of choosing a plan considering the ability to afford multiple deductibles
Ongoing marketing – Allocate a fixed monthly amount for marketing activities like social media ads, influencer marketing, events, PR outreach
– Customer service is a critical marketing tool; satisfied customers are likely to recommend the restaurant to others
– Focus on customer satisfaction and retention as a key marketing strategy

Your restaurant’s fixed costs are easier to work into your budget since they rarely change. 

Here are the fixed costs to budget for:

  1. Rent and building fees
  2. License fees
  3. Insurance coverage
  4. Ongoing marketing

1. Rent and building fees

While how much you pay per month for your commercial space varies greatly depending on where you’re located and how much square footage you have, the monthly rent and building fees you agree to pay when you sign your commercial lease are unlikely to change (until it comes time to renew). 

Leasing a restaurant is a big commitment and a big chunk of your restaurant startup costs. It’s a good idea to enlist the help of an experienced commercial real estate agent to help you avoid common pitfalls that could sink your business. Make sure they know the neighborhood or neighborhoods you’re considering and can advise you on things like competition, business turnover and foot traffic.

Don’t assume tenant-favorable clauses will be volunteered by the landlord. For example, a right to renewal, which is often agreed to by a landlord, but usually only if the tenant asks for it. 

Some other things to consider:

  • How much time and money will you need to spend on renovations or equipment to get the space customer-ready?
  • Does the lease include an annual rent increase? Be prepared to negotiate a cap on how much the landlord can increase the rent.
  • Who’s responsible for renovations, maintenance, property taxes, insurance and other building costs? Make sure you get this in writing.
  • Are you allowed to sublet the lease if you need to get out early?

Be sure to have both an attorney and accountant look over any lease to find any potential red flags and confirm it’s within your budget before you sign on the dotted line.

2. License fees 

While most licenses and permits have an initial cost, you may need to renew some of them annually. When you’re deciding which licenses and permits you need, factor in the initial costs and the fixed renewal fees as well. 

3. Insurance coverage

Insurance is an essential part of a functional business, especially for restaurants that want to be fully protected from liabilities. In an atmosphere that sees so many guests, and puts employees at risk for injuries in a busy kitchen full of dangerous equipment, adequate protection is critical. At the minimum, most restaurants will need:

  • General liability insurance, to protect against everyday accidents and incidents.
  • Product liability, in case any equipment malfunctions and causes injury.
  • Liquor liability, a special policy for restaurants that serve alcohol.
  • Workers’ compensation policies, to keep employees protected in case of injury.
  • Commercial vehicle insurance for any restaurant that offers delivery.
  • Restaurant insurance, a specific form of coverage that takes into account industry-specific risks.
  • Loss of income insurance, a specialty policy that can provide a safety net if something like a fire or robbery forces you to close temporarily.

Insurance will vary based on size, function and location, but most restaurant start-ups can expect costs of around $6,000 a year. While low-principal plans with high deductibles may seem appealing, be sure you can afford to pay multiple deductibles simultaneously in case something like a kitchen fire resulting from product malfunction closes your restaurant and injures employees.

4. Ongoing marketing

Along with the marketing costs to get your brand up and running, you may want to put a fixed amount aside each month towards ongoing marketing.

Social media ads, influencer marketing, events, PR outreach, you name it. However you decide to market your business, create a monthly marketing budget and stick to it. 

Also, consider amazing customer service as a part of your marketing. 

Nielson reported that 88% of customers are likely to visit a restaurant that they were recommended by friends and family. If you take care of your customers each and every service, they’re far more likely to keep coming back, write positive reviews online and recommend your restaurant to their entourage.

The best thing you can do to market your restaurant is to focus on customer satisfaction and retention. 

Restaurant variable expenses

Restaurant variable expenses
Category Details
Cost of Goods Sold (COGS) – Refers to the cost of ingredients and materials for dishes
– Varies based on the type of food served; e.g., Ahi tuna steak vs. cheeseburgers
– Aim for gross profits around 70%; for every $100 spent, $70 should be profit
– Pricing must account for both variable and fixed costs to ensure profitability
– Consider hiring a restaurant consultant for menu pricing to maximize profits
Utility costs – Can be significant; inquire about them before signing a lease
– Average cost is around $3.75 per square foot annually
– Depends on the size of the commercial space
Payment processing fees – Vary based on the payment processing provider and transaction
– Consist of interchange fee (percentage of transaction), card association fee, and payment processor fee (either flat or percentage-based)
– Roughly 80% of restaurant payments in the US are card payments
– Advisable to compare providers for favorable rates rather than opting for a cash-only approach

Your variable costs are more difficult to project since they fluctuate according to their output. Here are the three main variable restaurant costs to account for: 

  1. Cost of goods sold
  2. Utility costs
  3. Payment processing fees 

1. Cost of goods sold

The cost of goods sold (COGS) refers to the cost of the ingredients and materials used to make a dish. Depending on what kind of food a restaurant serves, COGS can vary greatly. If you’re selling Ahi tuna steak, your COGS will certainly be more expensive than if you’re selling cheeseburgers. 

For a restaurant to be profitable, its gross profits should hover around 70%, meaning that for every $100 a guest spends, $70 is gross profit. 

How much you charge for each restaurant item should take this into account; the higher the COGS, the higher the menu item’s price should be. 

When pricing menu items, also take into account your fixed monthly costs. You need to make enough money each month to cover both variable and fixed costs (like labor and rent) and still have net profit leftover. To do that, you need to have menu pricing and restaurant profit margins down to a science. 

If you need help pricing your menu items to account for your expenses (or figuring out what all your expenses are in the first place), consider hiring a seasoned restaurant consultant with experience in the field. This is one area that directly impacts your bottom line long-term; it’s worthwhile to get it right from the get-go. 

2. Utility costs

Don’t let your utility costs take you by surprise. Before signing your commercial lease, ask if utilities like electricity and water are included in your costs. If not, find out what previous tenants paid and use that as a benchmark. 

As a general rule of thumb, restaurant utilities cost around $3.75 per square foot annually. The bigger your commercial space, the more you will pay on gas and electricity. 

3. Payment processing fees

How much you pay in payment processing fees varies depending on your payment processing provider and their fees. For each transaction, there are typically three processing fees (usually a percentage of the transaction value). Here’s a quick breakdown: 

  • Interchange fee: Each credit card brand has a percentage-based interchange fee that’s charged to a merchant every time someone uses their credit card as a payment method.
  • Card association fee: Each transaction is subject to a percentage-based fee paid to the card brand network (Visa, Mastercard, American Express, etc.)
  • Payment processor fee: There are some payment processors who apply either a flat or percentage-based markup fee for routing money from the cardholder to the card association to the issuing bank and then, finally, to the merchant. 

Some restaurants avoid paying payment processing fees altogether by being cash-only, however, this can drastically reduce how many customers you serve. Roughly 80% of all restaurant transactions in the United States are charged to a card. 

Rather than avoid dealing with payment processing providers altogether, we suggest comparing providers and finding the one with the most favorable rates for your business. 

Do your research. Four out of five restaurant owners report being frustrated with payment processors for unclear pricing structures and hidden fees. It’s important to ask processors what the fees are, and if they can increase over the course of your contract. 

“Before switching to Lightspeed Payments, we were having a really hard time understanding what our monthly fees were with our old [payment processor]. I found Lightspeed Payments very transparent, and they were able to offer us lower rates. I would say it’s been a few hundred dollars in savings each month.”Molly McCrea, Director of Rooms, Wander the Resort

Restaurant mixed expenses

Mixed expenses have both a fixed and variable component. The biggest mixed cost each restaurant has to deal with is labor.

Labor costs

Depending on whether or not an employee is salaried or working for an hourly wage, the associated labor costs can fluctuate. However, we recommend projecting how many employees you need per service, how much money you need to pay them per week and sticking to that budget. 

What’s important is anticipating how much you spend on labor per month and having several months’ worth of payroll saved up prior to opening. Remember, your restaurant likely won’t be profitable right away, so put money aside beforehand to assure you can pay (and retain) your staff. 

Not sure how much staff to hire from the outset? Your staffing needs will depend on your service style and the size of your dining room. 

A quick-service restaurant (QSR) will need more back of house (BOH) staff than front of house (FOH) staff. At fine dining establishments, where the focus is on attentive, personalized service, you’ll need double the amount of FOH staff as a QSR would.

Defining your salary

While some business owners choose not to draw a salary while getting started, you will eventually have to pay yourself – after all, the goal of opening your own restaurant is to be able to support yourself financially. However, the amount you choose to take can affect the money you’re left with and, subsequently, the amount you have to invest in your business.

Most restaurant owners pay themselves a percent of expected sales, while others just take the bare minimum needed to make ends meet. Few people get rich quick owning restaurants, especially in the early days, but a successful restaurant can provide a stable livelihood. In the first one to four years of operation, owners can expect to make between $36,000 to $72,414.

How much does it cost to open a bar?

If you’re looking to open a bar or pub, the costs can differ greatly from a typical restaurant.  According to a survey released by Restaurant Owner, the median cost to open a bar or pub is $425,500 with the lowest being $275,500 and the highest being $650,500. 

The survey also found that it takes the average bar six months to become profitable, so if you’re looking to open one, you’ll need roughly six months of runway funding to give yourself a fighting chance. 

Some key takeaways from the survey

  • The average cost to open came out to $124 per square foot, or $2,710 per seat.
  • Construction costs average $250,000, kitchen and bar equipment average $85,000 and pre-opening and training costs average $20,000.
  • The average space for a new bar or tavern was 4,250 square feet with an average of 28 square feet per seat.
  • New bars and pubs garnered an average $1,380,000 in annual sales with a net profit of 5.5 percent and a 2.4:1 sales-to-investment ratio.

How to raise funds for restaurant startup costs 

While restaurant startup costs vary from concept to concept and city to city, one thing is clear: it costs a lot of money to open a restaurant. Do you have enough cash to open the restaurant you’ve been dreaming of?

If not, you’re not alone. Most people don’t have several hundred thousand dollars saved to self-fund a new restaurant, so they have to get creative with fundraising, financing and loans. Here are several ways to raise the funds you need to open your restaurant:

Go to friends and family

In any kind of business, most entrepreneurs ask friends and family for funds before seeking formal loans from banks or investors. The upside of approaching friends and family is that you have existing relationships based on trust, so you may not need to pay interest when paying them back. 

The downside is that there’s a reason they say money and family don’t mix. Money matters can cause tension  and conflict when it comes between family and friends. However, there are also a lot of successful entrepreneurs and business owners that have worked with and borrowed money from family and friends without destroying these relationships. 

The key is to set rules and boundaries from the beginning, create a legal agreement and treat them like any other investor. Conflicts arise quickly when you take for granted that your investors owe you special treatment because of your personal relationship. Learn more about the right way to mix family and friends with business

Get a small business loan (SBA)

The U.S. Small Business Administration connects aspiring entrepreneurs to lenders who understand the challenges that small business owners face. The SBA “reduces the risk for lenders and makes it easier for them to access capital.”

Bring on a business partner

You may have substantial savings, but they may not be enough to fund a restaurant. Consider teaming up with a business partner who has cash and expertise in an area where you fall short. 

That said, it’s crucial to choose your partner(s) very carefully. The long-term costs of entering into a bad partnership far outweigh the short-term advantages of a quick cash injection. Things to consider when choosing a potential business partner:

  • Do you trust them? This is the most important thing. You don’t want to spend the entire relationship looking over your shoulder and second-guessing everything they do and say.
  • Do they share your values? This doesn’t mean you both have to agree on everything, but when partners’ values align—eg. family, prosperity, work ethic, etc.—they are more likely to have a successful, harmonious relationship.
  • Do they bring different and complementary skills to the table? The most successful partnerships tend to be those where each partner possesses different skills and expertise. For example, if you’re bringing the strength on the creative side, look for someone capable of handling the more administrative side.
  • Do they share your vision? As partners, you’ll both be responsible for communicating and selling your vision to others, it’s important to keep your story straight and act in accordance with it.
  • Do they compromise? If a potential partner is completely inflexible, always has to be right or generally seems unable to compromise on what they want for the good of the business, it’s probably a sign to walk away from this potential partnership.

As with any business agreement, draw up the terms of your partnership in a contract to protect yourselves legally. 

Seek investors

Investors aren’t just for tech companies. Look for local investment firms that have supported restaurants you admire. Don’t approach investors without a rock-solid business plan and pitch deck. When investors see that you have a strong vision, they’ll know you mean business. 


Open your restaurant up to good-willed members of the public through crowdfunding. Create a page on Kickstarter and offer investors incentives for funding your dream. 

Restaurant crowdfunding can be either reward-based or equity-based.

In reward-based crowdfunding, backers get a reward commensurate with the size of investment. The larger the investment, the better the reward. Common incentives for restaurant crowdfunding  include meals, opening night invitations, cooking classes, wine tastings, etc. This Cat Cafe even offered cat play time sessions as an incentive. 

In equity-based crowdfunding, backers get equity in your restaurant. This type of crowdfunding attracts backers that are interested in your restaurant as a longer term business opportunity. Consider running both reward and equity-based crowdfunding campaigns to get a good mix of startup capital and long term investors. 

Keep in mind that there are literally hundreds of crowdfunding campaigns online at any given time. You’ll need to craft a compelling story to make yours stand out, and work hard to promote it. Clearly communicate your restaurant concept’s unique selling points and how it will add value to your community. What makes your idea different and unique? Why will it be successful? 

Crowdfunding campaigns tend to be all or nothing—most platforms won’t release your funds until you’ve reached your funding goal—so the worst thing you can do is run a lackluster campaign that fades into the background. Take the time to craft a compelling narrative and come up with interesting and original rewards.

Most restaurateurs can’t afford to start a business on their own. Find a fundraising method that works for you.

Restaurant startup costs checklist

Opening a restaurant is an exciting venture, but it’s also an expensive one. Use this restaurant expenses checklist to plan for and create budgets for each of these key investments.

  • Commercial space – Budget $________
  • Renovations and decor – Budget $________ 
  • Kitchen supplies and equipment – Budget $________
  • Restaurant technology – Budget $________
  • Licenses and permits – Budget $________
  • Marketing – Budget $________
  • Insurance – Budget $________
  • Labor costs – Budget $________
  • Rent and building fees – Budget $________
  • Food costs – Budget $________
  • Utility costs – Budget $________
  • Payment processing fees – Budget $________

Need help choosing restaurant technology that’s right for your business? Talk to one of our point of sale experts.


How much does a restaurant startup cost?

The cost to open a restaurant varies widely depending on location, size and concept, but it generally ranges from $175,000 to $750,000. Factors like rent, kitchen equipment, initial inventory and decor significantly impact the total expense. Restaurant startup costs for a food truck or small casual dining spot are usually on the lower end, while fine dining establishments in prime locations will require more investment.

What is the most expensive part of owning a restaurant?

The most expensive part of owning a restaurant is typically the initial setup costs, including leasing or purchasing property, kitchen equipment and renovations. Ongoing labor costs and rent or mortgage payments also represent significant financial commitments.

Are restaurants a good business to start?

Restaurants can be a rewarding business venture, offering opportunities for creativity and community engagement. However, they come with high risks, including tight profit margins and intense competition. Success often depends on location, concept uniqueness and effective management.

Can I open a restaurant with 100k?

Opening a restaurant with $100k is possible, especially if you opt for a small space, limit initial staffing and minimize renovation costs. Creative approaches, like pop-ups or focusing on a niche with lower restaurant startup costs, can also make this budget work.

Is owning a small restaurant profitable?

Owning a small restaurant can be profitable if managed efficiently, with careful control of food costs, labor and overhead and proper pricing. Profitability depends on the restaurant’s concept, location and ability to attract and retain customers.

How profitable are small restaurants?

Profit margins for small restaurants typically range from 3% to 5%, but with effective management and strong customer loyalty, some establishments see margins of 10% or higher. Success requires keen attention to cost control and market demand.

What type of restaurants make the most money?

Fast-casual restaurants that offer quick service and high-quality meals at reasonable prices tend to be among the most profitable. These establishments cater to busy consumers seeking convenience without sacrificing quality.

Who makes the most money in restaurants?

In a restaurant, the highest earnings often go to the owners or investors, particularly if they play active roles in management. Executive chefs and general managers in high-end establishments can also command significant salaries.

What is the average startup cost for a small restaurant?

The average startup cost for a small restaurant ranges from $175,000 to $375,000. This includes expenses for leasing space, renovations, kitchen equipment, initial inventory and marketing for the grand opening.

How much money should a small restaurant make?

A small restaurant’s earnings can vary greatly, but successful establishments might aim for annual revenues of $500,000 to $1 million, with net profits (after expenses) of 5-10%, translating to $25,000 to $100,000. Success hinges on efficient operations, marketing and quality control.

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More of this topic: Starting a Business