Average Cost to Open a Restaurant: How to Lower the Price
There are many reasons why average people opt to dine out in restaurants-for socialization or business purposes, to try out new food, to accommodate their busy lifestyles which makes it impossible to cook food at home, or just plain to splurge the money that they earned.
Food is at the top of Maslow’s hierarchy of needs, summarized as food, clothing, shelter and self-actualization. This would make it seem like losing money in the food service business is very unlikely. But this isn’t so. Careful business preparation is needed to make this investment profitable and one way to do so would be to lower the average cost to open a restaurant.
A businessman who wants to open a restaurant business should keep in mind demand and supply. Various aspects of the business plan, if worked out properly, can help the business owner achieve lower costs in opening a restaurant.
Pick a Business Theme
Deciding on the business theme will help eliminate impulse-buying of kitchen, equipment and dining furnishings. Streamline your design by making sure that the interior decoration of the premises is consistent with the restaurant theme. Purchase of tables, chairs, plates, trays, glassware, flatware and other silverware should support this image.
Location, Location, Location
The major costs in opening a restaurant business would be the location and structure. This will include the purchase or leasing of land and the construction of the establishment according to the business theme. Because of the huge expenses involved in constructing a business space, most business owners opt to lease instead of buying a property.
Food is Priority
Some make the mistake of spending too much on the appearance of the restaurant. The objective of the food service business is creating great food, thus priority should be given to purchasing cooking and baking equipment, designing fresh and dried food storage, creating a menu and cost effective pricing of each food offered, and selecting a team of expert cooks and bakers. Also included in the costs are dishwashers and proper, efficient and sanitary garbage disposal.
One of the main items that make up the costs in opening a restaurant is the manpower. You should consider manpower expenses for each restaurant activity – marketing, cooking, serving, cleaning, cashiering and accounting for all business activities. Innovations in food service are sprouting up everywhere with minimal manpower costs. The success of the Asian manner of serving food such as buffet style and self-service in Chinese, Korean, Japanese, Thai or Vietnamese restaurants are examples of these.
Promotion and Advertising Expenses
For a successful opening day, set aside money for promotion and advertisement expenses. Print out posters and flyers where your restaurant name and menu are written. To be able to advertise yourself properly, you should know what your “hook” is, or the strength of your business which you will highlight as a strong selling point. This can be the one-of-a-kind food, the alternative service routine, or simply great company. The current trend of going online to promote the food business has created a unique and cost-effective space for advertising.
A thorough and cohesive business plan makes for a great restaurant in terms of overall design, food, and service. Ultimately, a good plan means lower costs in opening a restaurant. A great start is always a good sign for any business.