How much money do I need to start a restaurant?

Question

My goal is to start a fish restaurant about 2000 s/f and was needing to know how much money I'll need to get started? Also, any advice about amount of money for reserve too for purchasing and payroll. Thanks,

Answer 1

Figure good rule is to have 3 months of sales in the bank to handle issues with a biz.

Building of 2000 sq ft, purchase price, setting up, remodel, ovens, grills, fridges, counters, silverware, plates, every last thing you need including permits, signs, etc. Minus food stock. Just this section I would deem easy 150,000.

Since you are new, you don't know sales yet, so on that note you would have to see what rent or mortgage is on the building, average utilities and such. I would say on average all the basic costs would run you around $5000 per month, if not more. So for a nest egg at least $15,000. But that is not including money back up for food nor labor.

Labor, wow, depends on how many people you have. Lets say just 4 including yourself. That is an easy $2000 per week w/o benefits, insurance, etc. Just all four at $10 per hour. So that is $8000 per month or at least $25,000 for back up.

Then you figure food, this could go from $2000 per month up to $20,000, all depends on what you sell, quality, etc. So we'll say just on average, $3000 per month or say $10,000 for back up.

Now don't forget taxes, as these are paid to Gov. quarterly. So thats another easy $20,000 in the bank untouched you better have as safety.

So now we are more or less done, doors are about to open, yet to collect your first dollar but are about too.... but you have at least $225,000 invested.

Of course this is much much more if you own the building.

Answer 2

Firstly, if you have no experience in the restaurant business, I'd advise that you work in restaurants for the next six months or so doing everything from bussing tables and washing dishes to waiting tables and cooking if they'll allow you back there and if you have the skills. This will give you some of the work experience that you'll need to understand and run a restaurant profitably.

If this is your first business venture, I would strongly recommend that you talk to a business counselor before you do anything especially spend money. I'd call the local office of SCORE (go to http://www.score.org and input your zip code to find the chapter nearest you), the advice is FREE.

Ask for someone who has a background in restaurants and they'll try their best to match you with the right counselor.
The counselor at SCORE will most likely advise you to write a business plan which is very good advice because it will force you to dig out all of the start up details and the costs of starting a fish restaurant and force you to also understand all of the aspects of this business including the customers you'll concentrate on (your market ) and how you'll get them to find out and want to come to your fabulous fish restaurant.

The location of the restaurant is important but doesn't make it successful. To prove that all you have to do is walk down a street in your town where there are several nice restaurants all in a row and you'll find one or two that are empty while the others are very busy. It has to do with menu, ambiance, and your reputation at the beginning and over time.

You also have to have food handling licenses, the right zoning, the right city and county licenses and permits and you have to be skilled at negotiating with your landlord about who'll stand the cost of the build-out or the changes to the premises to make it ready for your look and feel.

You also have to worry about the normal business planning and management issues related to starting up any business.
All of the other financials will come out in the business plan.

Take a look and read some of the articles at:
http://www.ychange.com/small-business-consulting-articles.html
especially the ones about a business plan and starting a business. Also try their Blog and their Bulletin Board.
Hope this helped.

Answer 3

It is entirely how much you want to spend almost. If you only need space and tables and a simple kitchen you may be able to rent one for a few thousand a month. If you want high quality kitchen and a well decorated space, advertizing and other more upscale things it will be more. Purchasing will be not much because you will buy every day. If you don't have experience managing a seafood restaurant you may find yourself buying the wrong amount so waste food or run out. Payroll in a restuarant is pretty small if you live someplace that pays less than minimum wage.
I think you could pull the whole thing off for less than a million including a reserve for your off season.

Answer 4

Go to the Small Business bureau in your area and get a plan. There is no way on the face of the earth ANYONE can answer your question.

You should have reserves of 6 months to a year.

Will you be renting or buying equipment, do you have food services lined up, how many employees, do you have an Atty lined up, a building lined up, have you done market studies of the community to see if the restaurant will "go" there, do you have ANY capital at all to sink into the business. Do you know what permits are needed? And on and on.

Answer 5

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RE:
How much money do I need to start a restaurant?
My goal is to start a fish restaurant about 2000 s/f and was needing to know how much money I'll need to get started? Also, any advice about amount of money for reserve too for purchasing and payroll. Thanks,

Answer 6

You should have a year of rent and living expenses set aside. You'll need a beginning inventory. Try to get everything delivered every day. Freeze what you don't use and learn a good seafood chowder recipe. How much, then? Hard to say. Assume $20/sq foot for rent, you'll need insurance, phones, cash register, inventory, equipment (lease it first), payroll (start out over staffed a little). You'll easily burn through $10,000 a month.