How Much Will I Need to Open a Restaurant?

Opening a restaurant is a substantial investment and can cost hundreds of thousands of dollars. A restaurant built from scratch requires everything from tables and chairs to the food supply and even the counter tops. The key to a successful restaurant is managing these initial costs to stay open long enough to generate the clientele necessary for sustained success.

Licenses and Fees

Opening a restaurant requires that you obtain several permits and licenses to operate a business in the state you intend to found your restaurant. According to "Forbes" magazine, these permits such as approval for adequate food preparation counter space and licenses to lawfully operate a business and collect sales tax can run about $100 each with several month waits for final approval. If your restaurant intends to serve alcohol, the permit to purchase and sell spirits can cost upward of $10,000 depending on the state.

Equipment

Industrial cooking and ventilation equipment required for food preparation and ensuring your new restaurant doesn't burn to the ground can cost between $100,000 and $300,000, depending on quality according to "Forbes." These costs also include freezers, storage facilities, chairs, tables and other accent furniture. The final costs of these materials are largely dependent on the "feel" of the restaurant. If your restaurant is more of a bar and grill, the costs of furniture may be substantially lower than those of a fine-dining restaurant.

Point-of-Sale System

A point of sale system or POS is a computer-based method of processing food orders and payments over a local network. A system like this is a virtual necessity in the modern world of credit card transactions. An average system costs about $7,000, though this cost does not include the percentages paid to different credit card companies for agreeing to accept them as methods of payment. Commissions paid to credit card processing companies can range between 1 and 2.5 percent of sales.

Initial Product

Opening a restaurant requires food and drink. The initial cost of purchasing the ingredients to make menu items as well as the alcohol needed can vary depending on the type of restaurant being opened. A sports bar looking to sell chicken wings and draft beer may have a much lower food cost than a fine-dining restaurant looking to use only the best ingredients. The key to maintaining the food and drink supplied requires 25 to 40 percent of revenues, says "Forbes."