How much does it cost to open a restaurant?
One of the first questions we get asked as Restaurant consultants, is how much will it cost to open our restaurant. Its a fair question really and the correct answer is generally. How long is a piece of string!!
At Lumiere consultancy we work with restaurant groups with large financial backing and perhaps already a portfolio of many sites, to single site operations, food truck or ghost kitchen operators. So the budget varies immensely, but the process is often the same.
To understand how much your restaurant will cost will very much begin with the following questions.
- What is your overall concept?
- Where are you looking to open?
- Who is your target audience?
- What is your ideal timeframe?
- What is your budget?
Once we have established those answers we can start making assumptions based on our previous projects and current market trends. Generally we would achieve this by crunching numbers and advising on a feasibility study.
For restaurant consultants, market research is so very important. Without understanding the local market and where perhaps the opportunities are it would be like navigating a tunnel without a torch. We have all seen those restaurant sites that geographically are in great locations on a map, but for one reason or another just really struggle. We have all seen those great concepts, but struggle because the location isn’t quite right. Well conceived market research backed up with financial assumptions will help build a picture of what your restaurant, bar, club or hotel will cost.
We have certainly seen a massive shift post covid in property cost and of course with the failure of many business, comes opportunities for others. Many of our current clients have picked up amazing deals with their landlords, who perhaps for the first time in decades are trying to make their property attractive to operators. In London restaurant/commercial property costs vary wildly from borough to borough. But there are some key considerations.
- What is the sites current listing? If it has already been a restaurant with existing services such as extraction, gas and 3 phase electric then this could be a significant cost saved
- Is the site vacant with a new lease or is there an outgoing tenant in which case a premium may apply
- Using a property agent could help you find off market opportunities and get you a better deal, but could cost between 10 & 20% of the lease
- Going directly to the landlord is often a more cost effective method, but have your numbers and concept detailed in a Landlord pack and be prepared to present well.
- The lease should be around 8 to 10% of your revenue so bear that in mind whilst looking for property
Build and Fit out-
Interior design, architecture and building work can become extremely expensive, dependent on the site, level of detail and of course what the local authority throws at you in terms of compliance. Similarly with kitchen design and build, thought must be given to concept and purpose as well as operational flow and efficiency. Amazingly the latter is not often thought about.
However the best piece of advice would be to appoint a strong project manager/ quantity surveyor who would work within your budget to keep your project moving and deliver on time. Often the real cost is missed revenue opportunities so having a production team that could deliver your site back to you within a rent free period could save you money in the long run.
These are the steps as restaurant consultants, we would follow and advise on. We assist lots of new and existing businesses to get started. To learn more about us you can visit our Projects Page or Restaurant Business Evaluation
Lumiere Consultancy pulls together a team of individuals that have worked and operated restaurants in the UK and internationally. Our experience spans from private dining events, high end dining and we also work with deli’s and smaller eateries too.