How to make a preopening budget for your restaurant?
A budget for your restaurant will help you plan and execute well. If you have decided to start your own restaurant, it makes sense to understand, how much will it cost and what all expenses will you have to face.
In order to open a restaurant you need to think of the process in a few distinct parts and all the components should be part of the preopening budget.
Space for the restaurant
While you consider the location, a key question to answer will be are you buying or leasing the place. Depending on that you will have to allocate the funds for the restaurant.
Design and Build
The next major expense that you need to consider will be the design and build cost. Even if the building is ready, you will incur significant cost in the design and interiors of the restaurant including any fees for the architect and the interiors designer. In this stage you will also need to consider cost of major equipment and HVAC systems that you plan to put in place
Kitchen equipment
In terms of cost the kitchen equipment will have to be considered as these are significantly expensive in terms of the overall cost of the project. In case you are on a shoestring budget consider hiring some used equipment.
Related read: How to open your restaurant on a shoe string budget
Supplies and operating equipment
While these are mostly consumables and will need to be replenished frequently, it is advisable to purchase at least 2 months of stock for all these items. The reason is that this stock can be used in lieu of working capital which brings us working capital.
Working capital
When you are opening a restaurant, it makes sense to hold enough working capital to ensure uninterrupted business. The biggest hurdle to running a successful business is the access to working capital and having enough to last at least 2 months help you to launch the restaurant better without the stress of making payments to vendor or employees looming in the horizon
Marketing funds
A restaurant launch is your big opportunity to make some noise in the neighborhood and the media. All media essentially want to know what is new and you can create opportunities to brand and market your restaurant if you have a budget for the restaurant
While these headings are not the whole expenses you may have, these will give you an idea for what all you need to think to open a restaurant. And remember that the money required will fluctuate widely between concepts that you may want to open so ensure you plan your budget right.
Experienced restaurateurs.. Have I missed out something in this. Do let me know in the comments below