When you decide to start a restaurant, you can probably come up with a fairly decent list of projected expenses. You’re going to have to buy or lease a building, and that comes with attendant expenses like utilities and security, not to mention the cost of renovation. You’ll also have to hire appropriate workers, including a kitchen staff, waiters, and a bartender (for example) and you’ll certainly have to stock your larder. However, there are all kinds of startup costs that you may not anticipate when you make your first foray into restaurateuring. Here are just a few potentially overlooked expenses that you’ll want to make sure are on your radar.

  1. Permits and licenses. Restaurants in general are going to need particular permits for operation, as with any business that serves food. But you may also find, depending on what you intend to offer in the way of food and beverages, that you need additional permits and licenses in order to comply with federal, state, or local laws. One biggie is a liquor license, and you may find that nabbing one is more expensive and difficult that you anticipate. You simply need to check with someone who knows the score (a successful restaurateur or qualified legal counsel, for example) in order to make sure that you understand the costs for these necessary documents ahead of time.
  2. Pre-open payroll. Once your restaurant is up and running, seasoned employees can train new recruits on the job. But when you’re launching a restaurant you have to train the entire staff from scratch, including not only the people serving the food, but also the people making it, as well as management. This could require several weeks of payroll before you even open the doors, much less start earning money. And you’ll need to put together training manuals, documented policies, and general procedures to cover every facet of your operation. So you need to budget accordingly.
  3. Delays in opening. Any time you have to rely on others for your timetable, there’s a chance that things could go awry. And when you’ve got contractors working on renovations, staff being trained, and permits to obtain, you’re bound to face some delays that could push your opening date. Considering you also need to put together advertising materials to let people know when your grand opening will be, this could throw a serious wrench in the works on a number of levels, namely financial.
  4. Soft launch. The inexperienced restaurateur is often raring to go, so much so that a soft launch is skipped in favor of an immediate grand opening as soon as the finishing touches are in place and the staff is fully trained. However, this is a mistake. You need to plan for a trial period without the general public knowing that you’re open so that you can work out any kinks and get the staff working together like a well-oiled machine. Unfortunately, you won’t make a lot of money during this period of 1-2 months, but when you do have your grand opening you won’t blow it when an overwhelming mob arrives, potentially ruining your reputation before you truly get started.
  5. Staying afloat. It can take several months or even years for a restaurant’s monthly income to exceed expenses, and you need to make sure you have enough cash or credit to keep your doors open until you become established. Once you’ve got your permits, employees, an ad campaign, and a membership with my national grocers under your belt you might think the money will start rolling in. But even if you’re popular right off the bat it will still take some time to build up regular business. In the meantime you need to budget for initial failure so that you have a chance to succeed in the long run.

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