Juggling Restaurant Costs
Starting a restaurant requires no small level of commitment. Out of all the businesses out there, the simple reality is that restaurants are one of the most expensive businesses to initially set up. The startup costs associated with a restaurant can be overwhelming for those new to business, and if they fail to account for all of the appropriate costs they will soon realize that they cannot maintain a successful operation. When you are starting your new restaurant business, it is essential that you properly plan for all restaurant costs so you can price your menu items appropriately, and make sure you can maintain the restaurant long-term.
The Basic Overhead Factor
Before even getting into the cost of food, there are a variety of basic costs that every restaurant owner must keep in mind. Some of these include:
- Licensing – You will need to get the basic business registration, health certifications, liquor license, and a variety of other permits and licensing, depending on what type of restaurant you plan to open. Most likely you will have the added cost of consulting with a restaurant attorney as well.
- Equipment – Restaurant equipment is not cheap. Consider the stove, freezers, refrigerators, ovens, dishwashers, and the variety of other equipment you need to buy and upkeep.
- Rent – Rent on a well-sized restaurant can be a considerable chunk of change. This is not even considering the cost of utilities, which is sure to be even more significant.
- Supplies – Forks, knives, spoons, plates, glasses, etc., some of which, most likely, you are going to be replacing every month.
- Decorations – Tables, chairs, artwork, and various other, possibly more expensive, decorations are all an important part of the restaurant’s theme.
- Employees – You have to pay your employees as well, and given the high turnover of restaurants, most likely there will be more hiring and training costs, as well as the usual employment taxes.
And these are just the basic overhead items.
Beyond the basic restaurant costs that you take into consideration, you must also look at all of the “unspoken” costs that might exist. These costs can include items such as: lemons for water, sweetener packets, wasted food, promotional food/drink items, cleaning supplies, and much more. On their own, none of these items actually cost that much, but when you take into consideration how many customers you might seat each day, the amounts can be absolutely tremendous.
Should you fail to account for all of the potential costs associated with your restaurant, you might end up charging too little for your menu items. This can lead to a deadly nosedive for your new business, and even the most experienced restaurant manager won’t be able to save you in that event. Instead, it is important that you do all of the proper budgeting beforehand and determine all of these unforeseen costs that you might incur. When you find that you have questions about restaurant costs for your new business and wish to get assistance from a Boston restaurant attorney, contact Lewis Sassoon of Sassoon & Cymrot for individual guidance and consultation.