How Much Does It Cost to Start a Restaurant [Infographic]

Just to be super clear, we are not Quantity Surveyors or cost consultants – we are architects that design restaurants and are therefore heavily involved in cost based conversations around design feasibility. We offer this guidance based on our experience working with many different clients, shopfitters and landlords with the sincere hope that it is useful in giving you a basic, realistic framework. We would strongly advise that when building your business plan and, even more importantly, embarking on a new project, you consult with relevant experts to build a specific cost framework for what you are trying to do.

 So, with all that in mind, let’s talk about the actual cost to start a restaurant.

Finding the right location is, frankly, a dark art as much as a science and clearly has an impact on your chances of success. It’s too big a subject to address in this post, but finding yourself a good property advisor is where you need to start.

When looking at the figures below, be aware that we have not allowed for any costs associated with rent, key money, overheads, staff costs, food costs, etc. It is simply based on the design and fit out.

Category Costs

Kitchen

Shell

This relates to the floors, walls, ceilings and shopfront. Strictly speaking, we might call this ‘builders work’ or ‘building fabric’ as normally most of the shell of a space is provided by the landlord and you are working within it. It includes structural work you might do, new windows or staircases you add, any partitions created to divide up the space, false ceilings and feature rafts, etc.

Joinery/Furniture

This really covers fitted and loose furniture. So, things like display cabinets, bars, maitre de stations, banquette seating, etc are joinery whilst loose furniture is pretty self-explanatory – tables, chairs, and stools for your eager customers to use.

MEP Services

This is an area often underestimated by new restaurateurs and the costs can be surprisingly high, particularly when going into a new building rather than taking over a site that has been previously used as a restaurant. MEP stands for mechanical (ventilation, air conditioning and kitchen extract), electrical and plumbing. If sprinklers are required, they would also fall under this category. One of the most important things to assess when looking at a new site for a restaurant is the feasibility and costs around kitchen extract and plant location – it can make or break the feasibility of the project. On the electrical side, a typical restaurant of this size would need 100-200 Amp, 3 phase power.

Professional Fees

Naturally, you need a team to deliver your project although the extent of that team might depend on both your own level of experience and specific landlord requirements. You may need to allow for an Architect, Quantity Surveyor, Project Manager, MEP Engineer and Structural Engineer as part of your team. And don’t forget the Lawyers, which could account for £5-12k on their own.

Contingency

In the military, there is a saying that no plan, no matter how detailed, survives beyond the first encounter with the enemy. Similarly, no design project in the history of civilisation has proceeded completely to plan. When starting a restaurant, there are going to be unexpected things that come up for all sorts of different reasons – discoveries on site not revealed in the survey, landlord demands, local authority approval conditions, sourcing issues, client brief changes, miscommunications and simple human error. Please save yourself part of the stress, by allowing a contingency fund. Projects can be stressful enough, without this burden.

Restaurant Types

So how much will it all add up to? Well, it can be between £325k and £1m…we appreciate that’s a pretty big range! The reason for this is that a big part of getting to the budget will be driven by the type of approach you take to deliver your vision. Let’s say you are doing your first restaurant and you are a passionate chef creating a neighbourhood restaurant and are taking over the lease of a previous restaurant, you are likely to take a ‘Startup’ approach to costs through simple necessity or to minimise your financial risk. Whereas a seasoned restaurateur wanting to create a high profile, fine dining restaurant in Mayfair with ambitions for a Michelin star will need to set a much more ‘Premium’ budget. And in between these 2 extremes is a more typical, middle way, that we might call ‘Professional.’

Startup

Professional

Premium

Lower Budget Than Startup?

• Choosing a location outside of London! This will immediately cut some of your costs down (not only on fitout, but certainly a lot on rent, rates. etc which may give you more funds to build the actual restaurant).
• You are likely to be more hands-on in managing the project and look for alternative/ DIY ways to make the project happen. This is often fraught with risk and patchy results due to lack of experience.
• Find a location where there is a good amount of fixtures and fittings that can be reused – if you can minimise changes to the MEP and Kitchen, you will be able to have more impact on the front of house areas that really create your customer experience.

Higher Budget That Premium?

• You choose a difficult site with lots of alterations to be made.
• You want to create a truly luxury or iconic experience – the sky is the limit in how much you can spend here.
• There are very strict landlord requirements that impact on the design.

Other Factors

Unlike shopping centres, listed buildings won’t necessarily take a direct toll on your budget but they are likely to add considerable time to the project and you will need to engage a certain level of professional to undertake the work.