The Average Cost of Opening a Restaurant

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The average cost of opening a restaurant depends on the site you choose, and the relative simplicity or extravagance of your plans. Leasehold improvements such as plumbing, gas and electrical work can cost as much as the equipment that you hook up to them. If you find a spot that has already been a restaurant, you'll save tens of thousands of dollars, as long as you design your operation to take advantage of the amenities that are already in place.

Rent

Plan on paying rent for two to three months at the absolute minimum before you open your doors.
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Even if you find a restaurant location that has most of the leasehold improvements that you need, it'll still take months to furnish it and install equipment. Plan on paying rent for two to three months at the absolute minimum before you open your doors. It's more likely that it'll take you six months to a year to get your restaurant up and running. As of 2011, a cheap location in an inexpensive town in the United States will probably cost you about $600 a month, and a larger space at a prime location could cost $10,000 per month or more.

Leasehold Improvements

Unless you're lucky enough to find a location that has already been a restaurant, you'll need to install plumbing, electricity and ventilation.
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Unless you're lucky enough to find a location that has already been a restaurant, you'll need to install plumbing, electricity and ventilation. The cost of plumbing will depend on how far your kitchen is from your main water source, and how much additional work you need for appliances such as bar sinks and ice machines. Expect to pay between $8000 and $20,000 on plumbing as of 2011, although costs can be considerably higher. Ventilation can cost between $10,000 and $50,000, depending on the height of your building and the size of your hood. Electrical work will probably cost between $5,000 and $20,000, depending on the relative simplicity or complexity of your needs.

Equipment

Your new restaurant will need stoves, ovens, sinks, coolers and prep tables, among other things.
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Your new restaurant will need stoves, ovens, sinks, coolers and prep tables, among other things. The cost of equipment will depend on whether you buy your appliances new or used, whether you're purchasing basic or high-end equipment, as well as the size of your kitchen. If you're frugal and your operation is small, you can probably furnish your restaurant kitchen for about $10,000 as of 2011, but equipment costs can easily add up to $100,000 or more.

Decoration and Signage

If you're decorating an upscale establishment, the cost will run into the tens of thousands.
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Even the most down-to-earth restaurant will need to be decorated and furnished. Plan to buy tables and chairs, and plates and silverware. In addition, budget for paint, plants, light fixtures and art to hang on your walls. You'll also need a sign or an awning to attract customers to your location. Plan on spending at least several thousand dollars on these expenses as of 2011. If you're decorating an upscale establishment, the cost will run into the tens of thousands.

References

About the Author

Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.

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