What Expenses You Should Expect Before Grand Opening
Opening a food service business is a big expense and it is important that you prepare for it long before you begin any actual spending. There are many things that you will have to pay for long before the day your establishment opens its doors for the first time and creating a budget is the perfect way to figure out what you need and how much it will cost. A budget will ensure that you do not overspend when you purchase the necessary equipment and it will also give you a guideline as to what you will need in terms of funding. Even after opening day, you should have an annual budget so that you can stay on the right spending track.
Obviously the first thing you will have to be concerned with is paying for the location of your business. Whether you buy an existing building, buy an empty lot, or rent a space, the funds needed to pay for this must go into your budget. Buildng renovations can also be included in the location part of your budget.
Equipment and Supplies
If you purchase an existing restaurant, then it may include much of the equipment that you will need. This could save you quite a bit of money. Otherwise, restaurant equipment and supplies will be a big expenditure. Equipment includes everything from commercial ovens, to refrigeration, to work tables, sinks, cookware, cooking utensils and much, much more.
You will also need create an appealing atmopshere that matches your restaurant's theme. Everything included in this is part of your restaurant decor expense and it needs to be in your budget. It can include everyting from tables and chairs, to tableware, to lighting, to wall-hangings and more. Decor also includes your table settings, dinnerware and flatware expenses, It may also include your condiment holders, napkin dispensers, caddies, and more. Be sure to include all these costs in your budget under decor expenses.
Licenses and Permits
Another thing you need to plan for is the cost of acquiring all your licenses and permits. You will also need to pay for all the inspections required prior to opening your establishment. In addition to these expenses, you may need contractors to repair damages or upgrade your establishment to meet building law codes. These may be considered unexpected expenses, but if you put them in you budget, then you will be covered.
Food and Beverages
Food and beverage costs are a staple budget item for any restaurant. As you establish yourself with vendors, you may have to pay initial upfront costs for the food items you order in order to establish a good credit rating. This will require a great deal of money, and obviously this is one expense that will remain on your budget throughout the life of your restaurant.
There are also several other start up expenses such as computers for keeping business records as well POS systems. Signage is another often overlooked expense and advertising costs must be budgeted as well. You will also need funds to pay your staff even before the business opens to the public. You will also need extra funds available for the unforeseeable things that crop up, and this should also be clearly spelled out in your budget.
Once you create a detailed budget outlining the funds required prior to opening your business, you will be in a much better position to solicit those funds.