How Much Does It Cost to Open a Restaurant?

Australian restaurants rarely join the top contenders on the 50 best restaurants list and it’s time you changed that. Considering opening a restaurant but don’t know how much it will cost? Wonder no more!

This quick guide will give you an idea of the average cost to open a restaurant in Sydney, Australia.

Keep in mind that this depends on your specific business plan and location, so be sure to do additional research. It’s important to have a general idea of what you’re getting into before taking the plunge. So, read on for all the nitty gritty details.

What’s Involved in the Cost to Open a Restaurant

Here’s a breakdown of all the things you’ll be researching when trying to come up with the cost to open a restaurant. These are things every restaurant needs but you can add or subtract based on your business idea.

• renting or buying a suitable space
• outfitting the space with kitchen equipment
• dining furniture and decor
• obtaining licenses and permits
• hiring staff such as chefs, waiters, and cleaners
• hiring a start-up team such as an attorney, accountant, construction contractors, etc
• utilities such as electricity, water, wifi
• applicable taxes and zoning restrictions
• payment processing platforms
• marketing and promotion
• your first food and supplies inventory

The initial investment to open a restaurant is significant, but the rewards are worth it. With planning and execution, your restaurant will be a popular hotspot for Sydney-siders.

Startup Cost Breakdown

According to one source, the average cost of opening a restaurant is AU$650,000. This all depends on the size and type of restaurant you are opening. Here’s how your startup costs will likely look.

Location

Before opening a restaurant, it is important to consider the location. This is a factor that often makes or breaks a restaurant and is guaranteed to impact your success.

Hospitality Finance
Hospitality finance is crucial whether you’re starting from scratch or buying an existing place, each option has its own costs to consider. It’s a good idea to plan carefully and get advice from experts to make sure you’re prepared.

Will you be building all-new or purchasing an operational restaurant in an existing building? Opening a franchise or converting a building into a restaurant?

Each option has its own benefits and drawbacks for you to consider. Building from scratch offers the most control over the layout and design of the space, but it is an expensive option. Purchasing a restaurant saves on construction costs, but it may be harder to find a space that meets your needs.

Opening a franchise requires less start-up capital, but you must adhere to the franchisor’s guidelines. Converting an existing building into a restaurant is cost-effective, but you may need to make significant changes to the structure of the space.

Consider your options before deciding on a location for your new restaurant.

Decor and Equipment

You will need to buy interior and exterior finishes and equipment. These include large kitchen appliances such as fridges, commercial dishwashers, and cooking equipment as well as furniture and decor to fit your business’ brand. Depending on the budget, you may buy all new or try to save by buying on sale or second-hand.

Make sure to take into consideration shipping cost and time as well as the return policy. If you plan to buy online, always check the company’s reviews to be sure they are reputable.

Finally, don’t forget to factor in the cost of installation and/or assembly. With a little planning, you can furnish your new kitchen without breaking the bank.

Opening Preparations

Another expenditure that must be taken into consideration when starting a restaurant is the hiring and training of staff, and the buying of inventory such as utensils, plates, food, and drinks.

Training staff is expensive, but it is necessary to ensure that they perform their duties up to your desired standard.

Marketing

Marketing is a critical component of any successful restaurant. Without effective marketing, it can be difficult to generate interest and attract customers. There are a number of different marketing channels that can be used to promote a restaurant, including traditional advertising, public relations, social media, and email marketing.

When selecting a marketing strategy, it is important to consider the type of restaurant and the target audience. For example, an upscale restaurant may benefit from public relations, while a casual eatery may be more effectively marketed through social media.

Choosing the right marketing mix will help to ensure that the restaurant is able to reach its target market and achieve its business goals. Marketing will also have a big impact on your startup restaurant budget.

Licences, Permits And Taxes

When opening a restaurant, there are a number of licenses and permits required. You’ll also need insurance to protect yourself from liability. Taxes are also a major consideration, as different types of businesses are subject to different tax rates.

Failure to comply with any of these can result in significant penalties, so it is important to seek professional advice to ensure that all legal requirements are met.

Technical Services

A point-of-sale system is a must for any business. Not only will it help you to keep track of orders and reduce errors, but it will also allow you to accept credit card payments and track inventory. An online ordering system is also a valuable tool for restaurants.

Technology that enables customers to order and pay at the table can help to streamline the ordering process and make it more convenient for customers. By investing in these systems, you can help to improve your restaurant’s operations and make it more customer-friendly.

Food Costs

It is important to keep in mind that when starting a food inventory, the initial cost will be high. This is because you need to buy everything at once, and later on, you will only be replacing what you have used.

Having a food inventory tracking system will help you to know exactly what you need, and when you need to buy it. This way, you can avoid overspending on food that will go bad before you have a chance to use it. Factor this in your startup cost to help you save money as the business grows.

Opening a Restaurant Is Exciting

Don’t let the cost to open a restaurant deter you, this is an exciting time! Of course, this is just a starting point and we advise that you consult with professionals in each of these areas to get a more accurate estimate for your specific location and needs. But at least now you have an idea of where to start and can begin planning your dream eatery!

When you’re ready to purchase top-quality kitchen equipment, Snowmaster has everything you need – from refrigeration units to commercial ovens. Visit our website today to browse our range or request a quote. We look forward to helping make your restaurant dreams a reality.