Sebuyo Guide: How to Calculate the budget of your restaurant!.
Opening a restaurant necessarily requires a financial investment. However, there is no such thing as a typical budget. The latter depends on a set of parameters specific to each business concept. Nevertheless, we can rely on common spending poles to each type of restaurant. In this article, you will learn on what base you are able to calculate the budget of your future restaurant.
Business and location
It is definitely the biggest expense you will have to make for the opening of your restaurant. If the location you are looking for hosted a restaurant before, you will have to pay a transfer fee to the previous owner of the business (price depends on the existing clientele and reputation).
Once the business is in your pocket, you will have the choice between renting or buying the walls. This will largely depend on the wishes of the owner. Note that owning the walls is a considerable asset. Do not be dependent on the good will of an owner when it comes, for example, to the renewal of a lease contract. If you opt for a truck (pizzeria or food-truck), you will have to take into account the purchase of the truck as well as the "renting" of your location.
The price will therefore vary according to several criteria such as:
- Area of the site
- Location of the site
- Equipment of the place
- Turnover of the predecessor restaurant
So there are many things to consider when buying and negotiating. You now understand that opening a restaurant is far from obvious. Do not forget to take into account months of rents in advance. If you are planning to start your business in this industry, you can seek for know-how, mentorship, services and many more in our Sebuyo Partner Network.
Kitchen Supplies and Decor
Depending on existing supplies, you may need to invest in equipment. Let’s take a simple pizzeria as an example to understand the situation better. Here are a list of the main items in regards of a purchase of kitchen equipment:
- Oven: 2000 euros
- 2 drinks showcases: 800 euros
- Work plan: 1000 euros
- Stainless steel tanks: 1500 euros
- Fridge: 700 euros
In a second step, you will also need a cash register. Keep in mind that there is cash register software available that, in addition to be extremely simple to use, it saves money, lets little space for fraud by employees and let your business look up-to-date. Do not forget the whole decorative elements such as tables, chairs, cutlery etc, of course, this is only indicative. This proves that with a budget of round about 10,000 euros (depending on country, budget may vary), you can buy all the basic equipment needed to open a restaurant.
A helpful and budget saving tip: You can easily use second hand equipment for the beginning, it is not essential to have brand-new and high-end kitchen equipment and cutterly by Villeroy & Boch. But it depends of course on your budget and the concept you are planning to start with. For second-hand equipment there are various suppliers, offers and platform across the web. Here are three to choose from:
Your team and stock
Depending on the type of restaurant you wish to open, you may need some staff. So you're going to have to take salaries into account. Thus, the budget for a food-truck (where you will be the unique master on board) and a restaurant (where you will have to hire 2 waiters and a cook), will not be the same. Additionally, you will have to buy or rent stock space where you will be able to prepare your dishes. Depending on the size and number of cutlery in your restaurant, the charges will not be the same. Do not forget to calculate your budget for goods & beverages too.
Promotion of the restaurant
Having a restaurant is good. It's better to get paying and recurring customers. You will have to include all the communication and marketing part also into your budget. The promotion usually involves:
- Creation and maintenance of a website
- Setup and maintain at least a Facebook Page
- Production & distribution of advertising material (Flyers, Businesscards, Posters, Banners etc.)
- Some form of promotion (e.g tasting in the public space, near the restaurant)
- Customer and loyalty management tools
As you can see, a budget can quickly go from single to double. The goal is to invest in what you really need and identify the “nice to have” elements that kills your budget. Do not forget that it is an integral part of your business plan. This will allow you to get a loan from your banker or investor. Note also the possibility of applying for financial aid, especially if you are registered at the Employment Office. This is an important step to which you will have to think through and take of time. In the meantime you can grab some inspiration for your future restaurant by browsing through the Sebuyo Marketplace database or leave a comment below and exchange your experiences with other users.