How much does it cost to open up a restaurant?
If I do go for a career in culinary arts, I would like to know how much money opening up and also maintaining a restaurant would be. I know that the price would be a lot because of rent, bills, employees, furniture, food, and more. But what is an estimate for a small establishment? #Food #Restaurant #Businessowner
According to https://pos.toasttab.com/blog/on-the-line/how-much-does-it-cost-to-open-a-restaurant, the range for a new one is $95,000 to $2M+ and this site give you a list of things to consider. https://www.sage.com/en-us/accounting-software/startup-costs/restaurant/ also has a cost calculator.
https://www.cnbc.com/2016/01/20/heres-the-real-reason-why-most-restaurants-fail.html claims that around 60 percent of new restaurants fail within the first year and and nearly 80 percent close within 5 years. https://www.foodindustry.com/articles/what-is-the-failure-rate-for-us-restaurants/ says that statistic is overstated.
The restaurant business can be very tough and you want to have lots of experience before you open one yourself. I'd suggest you get experience in every position in existing restaurants to understand the jobs and your aptitude. Once you have plenty of experience, you'll be in a much better position to determine if opening or buying on is the right move for you. Also, this gives you the opportunity to save money for startup costs and operating experience that a lender will likely require to provide a loan.
Just from personal experience, you can get quotes on storefront spaces in outdoor strip mall areas, etc. Obviously the nicer the area and high traffic, the more you'll pay month to month for rent. You won't typically be able to full out own the space as much as long term lease it. In a nice area around the Mesa, AZ are you are looking at 3-4k a month for renting the space, then you split the trash and recycling and maintenance of the parking area with all the other storefronts, and then you got to pay your own utilities obviously. Time that by 12 and that would be the year to year minimum operating cost. This is why lots of startups start with the more trailer/catering, build a social media following, structure before going for their first full out restaurant.
As you try to build your culinary business, I will say, many struggling businesses that have storefronts are often willing to come to some agreement to share their kitchen so you can run your catering in the back and ease their month to month cost of rent. I've done this for small baking startups at farmers markets who are needing to meet the growing demands of a growing customer base but don't have the money to afford their own kitchen space just yet.