Financial Considerations when Opening a Bar or Restaurant
Financial Considerations

Financial Considerations when Opening a Bar or Restaurant

Posted on By : russell

If you are thinking of opening and running a new restaurant, it requires a level of specific knowledge and skills and money. This is something which should be considered before going much farther in the process. There is much more to consider than the cost of getting a building and the ingredients for a quality menu.

Let’s break down the costs associated with opening a restaurant or pub into logical components:

  • Location; a budget for the actual site or location is essential. Setting this budget is critical to making sure that you acquire a position which you can afford and start off on the right foot. Even if you absolutely love a location and it is out of your price range, it is worth strongly considering the implications of making this out of range purchase, and ensuring it does not start your business off too much in the red. The cost of the site is entirely dependent on location, size and the actual real estate market.
  • Renovations; in the chance that the building you have purchased was not a restaurant before, you will need to equip it and fit it up with the required amenities to be a fully functioning restaurant. This includes a kitchen, open dining area, a patio (if desired), storage and bar, etc.
  • Equipment and décor; once the space is fitted correctly, it is essential to purchase the right equipment and décor. Once again, this is an area where the budget is critical. Fixtures, appliances, chairs, tables, bar stools and décor, etc. To avoid overspending, it can be beneficial to hire a designer, or sit down and map out the space and create an extensive list of things you will need, and stick to that list, similar to a grocery list.
  • Marketing; your bar or pub or restaurant could be the most beautiful space with the most magical and enticing menu, but without awareness, it will never be seen by any customers. It is essential to view marketing and PR as an investment, not necessarily an expense.
  • Technology; from security cameras to POS systems, having the right technology can be extremely important to your new restaurant’s success, and though it can be a hefty outlay of money up front, the right technology investments can save you substantial amounts of money over time.

These are all areas where budgeting and careful financial planning and management is essential so taking some courses in these areas or finding someone who can assist you or has the expertise to help can be significant. Be aware that, without careful and diligent planning, the most common and likely areas of overspending include technology, furnishing and décor as well as overspending on marketing and promotion.