When wondering how much does it cost to build a commercial kitchen, the answer isn’t easy. Many factors affect the cost of a kitchen but the biggest factors are the location and what kind of a kitchen will it be? Will the kitchen serve 50 customers a day with a simple menu, or is it a huge commercial kitchen that feeds 1,000 customers a day with multiple meal choices, snacks, desserts, and more.
A commercial kitchen also needs to fit inside legal regulations like business and food service licenses, food hygiene regulations and the kitchen needs to be approved. Every country and area has different regulations and you should check your local ones with care because the worst scenario could be that the restaurant would be shut down if some major legal issue has been overlooked.
If you are thinking about opening a restaurant don’t be intimidated because it can sound scary, but keep going and you will notice that it isn’t so bad when you get the ball rolling
In addition to these factors, other costs could take place like contractor costs, equipment, and marketing. Let’s review all these factors individually so you can have a more informed vision about everything.
How Much Does It Cost To Build A Commercial Kitchen?
The average commercial kitchen startup cost is between $275.000 – $375.00, and there really isn’t an upper limit to how much you can throw money at a commercial kitchen. However, there is a limit that how low you can get, and if you are building a really small kitchen then it can get as low as $50.000 – $100.000
Determine Your Needs
This is where you can see a huge difference between the costs of commercial kitchens. The equipment costs can be astronomical if you are starting a large catering kitchen and the dishwasher alone can cost up to $100.000 or more! You would also need multiple commercial-grade stoves, ovens, walk-in refrigerators, freezers, and a dozen of other important pieces of equipment. However, this sort of kitchen usually isn’t purchased or build by an individual.
On the other side of things, if you are planning to start a little bakery, coffee shop, or a pizzeria your costs will be much, much lower. In this kind of kitchen, the biggest investment would be multiple ovens which price ranges vary also a lot from $1.000 – $20.000 each. It all comes down to the amount of food you intend to prepare.
The real cost will get clear when making a business plan and evaluate what it is that you want to do with your kitchen, and how many customers to expect. When starting you should also consider the future and if you want to scale your business. Consider the equipment carefully before purchasing and in the restaurant business, it is always better to have a bit of bigger equipment than smaller ones.
The second biggest factor to your restaurant’s cost is location. As imaginable if you want to open a restaurant in the busiest street in New York, the cost could rise to millions of dollars. Luckily that’s not the case in most of us, but the same principles hold everywhere. Familiarize yourself with the places you would like to open a restaurant, and it is always a good thing to ask questions and information from someone that is doing already business there.
In the restaurant business, the location might be the most important factor in whether the restaurant is successful or not, so if you are on a budget and need to skimp on other things to get the other, don’t do it on locations expense if it isn’t necessary.
You should also familiarize yourself with the competition in the area, and their menus what they offer to get a good idea of what you’re up against.
When choosing a contractor it is a good idea to pay attention. This is where a lot of money can go to waste if not being careful. When comparing different contractors, the cheapest one isn’t usually a good idea because if the work is done poorly and needs to be done again, the costs will get much higher if you would’ve chosen more professional help in the beginning. However, this doesn’t mean you should throw blindly money to the one that haves the highest cost.
The best approach to this is to find reviews and experiences of the different contractors you have in mind and maybe ask someone that has done business with them. The need for different kinds of contractors varies a lot because a small pizzeria won’t need as highly trained and costly contractors that a huge catering restaurant would need.
Marketing is a big part of the restaurant business as well, especially if your restaurant isn’t located in the busiest street in town. The price of marketing varies a lot like everything else when doing a rough comparison of the general restaurant costs, but a good basic idea of the marketing budget should be 3% – 6% of total sales. If you are opening a franchised restaurant then there is a good chance that the marketing is done for you.
The opinions on marketing will certainly be different and you need to experiment and try different methods to see what is the best approach for you.
Staff is, without saying, the heart of your business, and with good employees, everything will roll smoothly and pleasantly. The average costs of employees are usually between 20% – 30% of gross revenue. However, the costs will be different in a fast food restaurant when compared to a highly reviewed fine dining restaurant with trained chefs and waiters.
Regulations, Licences, And Insurance
This is the part when people feel more overwhelmed and displeased when starting a restaurant, but it is something that needs to be done really carefully. Some permits and inspections will take place before you can legally operate the restaurant, and there will be costs as well. Again, the costs vary a lot depending on the location, size, and value of everything you have in the restaurant. The price range usually falls into $3.000 – $15.000 for everything.
In conclusion, you can see that the answer to how much will a commercial restaurant cost is vast and diverse. When making a business plan, you will calculate everything and get an estimate of what the cost would be in your case.
Last but not least, it is easy to cheat and trick yourself when making a business plan. It is better to make the cost estimate on the higher end than lower, and when opening your restaurant you should have at least 3 months’ worth of backup funds because at the start you will get some unexpected expenses, therefore your success will be more secure.