Business & Finance

How Much Does It Cost To Start a Restaurant Business?

If you want to make a living for yourself, starting a restaurant is a solid opportunity. However, it is not as simple as opening a small eatery anymore. If you want your restaurant to succeed and continue running, you must plan out every aspect and price before opening.

So you’ve dreamed of starting a restaurant business, but you don’t know the first thing about finances. You’re worried that it might cost too much to get started.

Well, fear not! Starting one doesn’t have to leave you bankrupt and in debt. In this blog post, we’ll explore how much it costs to do and how you can do so without breaking the bank.


Evaluating Start-up Costs

Starting a restaurant business can be a daunting process. Knowing what your startup costs and other financial considerations can help make it easier. It includes the factors below.


From kitchen updates to electrical and plumbing work, contractors are essential. While the cost of contracting will vary depending on the project’s scope, general contractors charge an hourly rate ranging from $35-$200 and up. Specialty contractors may charge up to $1,000 an hour.


The local utility company should be contacted to determine current rates and set up accounts. Electricity, which is used to power everything from lights, to cash registers, to kitchen equipment like mixers and a meat slicer, is likely to be the first utility set up and can cost anywhere from around $150 to $400 or more, depending on the size of your restaurant and location. Water and sewer costs are usually billed together, ranging from $20 to $100 per month.


Renting a property in a high-traffic area, such as a city center with a healthy dining presence, will likely come with a higher start-up cost. A location with an established neighborhood following may be a better financial investment. But, there may be added marketing and advertising expenses.

Thinking outside of traditional locations, such as pop-up stores, can introduce the business to new customers. It can help to keep the start-up cost low. Before investing in a physical space, owners should research the local market.


A trendier, upscale restaurant concept will likely cost more upfront due to fixtures, decor, and menu items. Owning a fast-casual or casual restaurant may cost less since the decor and menu are reduced.

Equipping the kitchen and financing equipment for business will be a significant expense with items like a  ovens, deep fryers, and charbroilers. Commercial kitchen equipment and full dining room set-up may be necessary, including tables, chairs, dishware, and cutlery. All costs put together may range from anywhere between 30,000 to 2 million dollars.

Budgeting for Insurance and Permits

Permits may include food licenses, building permits, and signage approvals. If your restaurant serves alcohol, you may need to acquire a liquor license, which can vary in cost depending on the type of license and state requirements. Owners need to buy general liability insurance, restaurant loan, and property insurance to protect the establishment in the event of theft, loss, or damages.

Cost Considerations for Restaurant Business Startups

Starting a restaurant business can be challenging, but it is achievable. The cost to start up depends on many factors, including concept, location, and more. Knowing your budget and taking the time to research the costs associated upfront can help set you on a path to success.

If you’re ready to take the leap, contact a business advisor today to help map out a plan to get your restaurant off the ground.

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