A category-by-category breakdown of startup costs, with a worksheet you can fill in with real local quotes.
A counter-service cafe in a former restaurant space with equipment in place costs a fraction of a full-service restaurant built from an empty shell. Rent, construction and wage levels differ widely between cities. Rather than relying on national averages, list every cost category, gather real quotes and plan for the unexpected. If you are considering a smaller start, our guide on how to start a food truck business covers a lower-cost route.
| Category | What it includes |
|---|---|
| Real estate | Security deposit, first months’ rent, broker fees, possibly key money |
| Build-out and design | Construction, plumbing, electrical, ventilation and hood systems, grease trap, restrooms, finishes, architect and designer fees |
| Kitchen equipment | Ranges, ovens, fryers, refrigeration, prep tables, dish machine, smallwares |
| Front of house | Tables, chairs, bar, lighting, decor, tableware, signage |
| Technology | POS system, kitchen display screens, Wi-Fi, music, security cameras, time tracking and scheduling |
| Licenses and permits | Business license, health permit, building permits, certificate of occupancy, liquor license, sign permit |
| Professional services | Attorney, accountant, permit expediter if needed |
| Opening inventory | Food, beverages, alcohol, cleaning and paper supplies |
| Pre-opening payroll | Hiring, training and soft-opening shifts |
| Marketing | Branding, website, signage, launch events, local advertising |
| Insurance | Liability, property, liquor liability, workers’ compensation |
| Working capital and contingency | Cash to cover operating losses and surprises in the first months |
Turning a space into a working restaurant can be the largest single cost, especially if you need a new hood and fire suppression system, upgraded electrical service, gas lines, grease traps or accessible restrooms. A “second-generation” space that was already a restaurant can save a great deal, but inspect existing equipment and systems carefully and confirm they meet current codes. Get bids from contractors experienced in restaurants, and ask the landlord about tenant improvement allowances or rent-free periods during construction.
Size equipment to your menu and expected volume. Oversized equipment wastes money and energy; undersized equipment slows service.
Most restaurants need a business license, a food service health permit, building and occupancy permits for the space and permits for signs. Serving alcohol requires a state liquor license, which can be expensive and slow to obtain in some areas, and in some places is limited in number. Staff may need food handler cards, and many areas require a certified food protection manager. Start the permit process early, because delays push back opening and add rent costs. Our restaurant compliance guide and HACCP guide cover ongoing requirements.
Restaurants usually hire and train staff before opening, often with several days of training and soft-opening service. That time is paid working time, and minimum wage, overtime and tip rules apply from the first shift. Budget for managers’ salaries during build-out as well. Our restaurant staffing guide and restaurant job positions help you plan the team, and restaurant payroll basics explains tipped wages and overtime.
Few restaurants are profitable from the first week. You need cash to cover rent, payroll, food purchases and loan payments while sales build. Many advisors suggest holding several months of operating expenses in reserve; the right amount depends on your concept and market. Running out of cash before the business finds its footing is a common reason new restaurants close.
| Category | Quote 1 | Quote 2 | Budget |
|---|---|---|---|
| Deposits and pre-opening rent | |||
| Build-out and design | |||
| Kitchen equipment | |||
| Furniture, fixtures and decor | |||
| Technology | |||
| Licenses, permits and professional fees | |||
| Opening inventory | |||
| Pre-opening payroll and training | |||
| Marketing and launch | |||
| Insurance | |||
| Working capital reserve | |||
| Contingency |
Add a contingency line for overruns; construction and permitting almost always take longer than planned.
| Cost | How to manage it |
|---|---|
| Food and beverage cost | Track with a food cost calculator and adjust menu prices |
| Labor cost | Schedule to sales forecasts; see our restaurant labor cost guide |
| Rent and occupancy | Negotiate lease terms before signing |
| Utilities | Maintain equipment and control energy use |
| Supplies and repairs | Preventive maintenance and supplier comparisons |
| Marketing | Measure what brings customers in |
| Factor | Counter-service cafe in a former cafe space | Full-service restaurant in a new shell |
|---|---|---|
| Build-out | Light refresh, existing plumbing and hood | Full construction, new hood, plumbing, electrical and restrooms |
| Equipment | Some existing equipment reused | Full kitchen and bar package |
| Licenses | Health permit and business license | Health, building, occupancy and liquor licenses |
| Staff before opening | Small team, short training | Full front and back of house team, longer training |
| Time to open | Weeks to a few months | Often many months |
| Working capital | Lower monthly costs to cover | Higher rent and payroll to cover while sales build |
The comparison shows why it is more useful to understand the drivers of cost than to rely on a single average. Use it to decide which concept and space match your budget.
Every month between signing a lease and opening the doors usually costs rent, loan payments and management salaries without any sales. Map the timeline for design, permits, construction, equipment delivery, inspections, hiring and training, and identify which steps depend on others. Ordering long-lead equipment early and starting permit applications as soon as possible can save significant money.
Lenders and investors will expect a business plan with detailed cost estimates and financial projections.
Labor is one of the largest ongoing costs in a restaurant. EZTime helps new restaurants control it from the first shift: scheduling software builds shifts around expected covers, the attendance clock records punches and breaks on a shared tablet or phone, and approved hours export to payroll. See EZTime for restaurants.
It varies widely by concept, size, location and the condition of the space. Build a budget from local quotes for each cost category plus working capital and a contingency.
Build-out of the space and kitchen equipment are often the largest one-time costs, followed by working capital needs.
Options include a second-generation space, a smaller menu, used equipment, phased opening or starting with a food truck.
Enough to cover operating costs while sales build; many advisors suggest several months of expenses in reserve.
Yes. Training and soft-opening shifts are paid working time, and wage and hour rules apply.
It depends on your location and whether you need a liquor license. Start early, because delays add rent costs.
Buying an operating restaurant can lower build-out costs and speed up opening, but review its finances, lease, equipment and reputation carefully.
Breaks are recorded in EZTime alongside the shift, with reminders for employees and an alert when a required break is skipped.