How Much Does It Cost To Open A Small Restaurant

If you have the passion to open a small restaurant and can handle all the associated restaurant costs and stress – you’re on your way to following your dreams. All you need is the lowdown on costs. To make these dreams your reality – you’ll need to discover all the details regarding all the costs involved. That way you will not only start running a profitable restaurant from the get-go but have a good idea of what kind of restaurant you can afford to open and operate for the long-term. 

There’s no sense in spending everything you have to find the biggest and best location if it means you need to have an unrealistic amount of customers from the start or can’t last more than a few months to a year without making a profit.  So, it’s best to very carefully consider the kind of establishment you want and can afford right from the start.

Consider a Few Types of Small Restaurants & Startup Costs

Do you want to open a diner, cafe or a bistro? 

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It’s important to realize straight away that these kinds of small restaurants could easily cost between $40,000 to $80,000 just to begin with. If that didn’t shock you – then you’re more aware of the high startup costs than most would-be restaurateurs.  Now, keep in mind that there are ways to obtain credit and loans that could cover a large chunk of the initial costs. In the case of banks – you may have to have some collateral and outstanding credit to secure a loan but it’s sometimes key to getting started and to have some cushion for any challenges that arise.

While the location of your restaurant is important for attracting customers – the better the location the more expensive the rent costs will be. And the city you wish to open your restaurant is also a factor as rent could be as high as $150 per square foot in areas of Chicago or $50 per square foot in Los Angeles or similar locales. Since the average small restaurant size is between 3500 and 5500 square feet in the United States – you can be looking at high expenses from the get-go. 

You may also want to consider a food truck or a home-based catering business at first. The initial costs and risks are far lower. A used food truck could cost $10,000 to $90,000. A new one could be much more. A food truck also allows you to go where the customers are while also preparing you for a more permanent small restaurant business. Of course, food trucks need maintenance too and licenses that need to be factored in.

Events that you can cater come in all sizes and require nearly the same basic elements for running a small restaurant:   

  • Food preparation
  • Budgeting restaurant costs
  • Bookkeeping
  • Marketing
  • Menu planning
  • Establishing prices
  • Licenses
  • Customer service
  • Insurance

Key Elements to Line Up Before You Open

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An important thing to line up before opening is establishing a reliable connection to wholesale restaurant food distributors. A good supplier will be easy to access like the GoCheetah app which allows small restaurants to get their ingredients delivered the very next day.  

Also, get all your licenses in order and consider getting an accountant or an attorney to help you if you feel that you’re in over your head. 

Ultimately, unless you are considering everything imaginable, researching, calling and adding everything up –  whatever you estimate you may just want to double it. After all – many restaurants don’t see profits for a year or more.