Opening a restaurant is an exciting and fulfilling business venture. One of the first things you probably want to know when you decide to open a restaurant is how much it’s going to cost. 

The financial side of running a restaurant is one of the most important things you will need to consider for your new business venture. There is no definitive answer about how much it will cost to open your new restaurant because there are so many variables involved.

However, there are some things you can look at to find out how much it will cost you to open your restaurant.

One of the biggest factors in determining the cost is if you are opening a franchise or a new restaurant.

It can be advantageous to open a franchise because you will be working with an established name making it a lot easier for you to pull in customers quickly.

Franchises are less risky because they are based on a proven business model. They are also advantageous in terms of the marketing support, training, and other process required in setting up a restaurant. 

While opening a franchise has more benefits and less risky, it may cost you more if not the same. You may be looking at upwards of a million dollars to open a very popular franchise.

The median cost for opening a restaurant will be about 375,500 dollars. On the lower end, you may spend 175,000 dollars. On the higher end of the spectrum, you will spend about 750,000 dollars to open a larger restaurant or restaurant in an upscale neighborhood.

Devise a Restaurant Operation Plan that Works for You

A restaurant operation plan that works for you is essential, you can streamline the process by using restaurant software

Bear in mind that what works for one restaurant owner may not work for another, every restaurant is different.

There are many variables to consider, it can be challenging to find what works for you. However, automation in the restaurant industry is making it easier to manage inventory and costs no matter what type of restaurant you run. 

There are self-ordering kiosks restaurants that manage to cut costs by having their customers order by themselves.

You will need to think about the type of restaurant you are running, the community where the restaurant is located, and the type of marketing that you will need to bring customers into your restaurant. 

The key to success is to devise a method of operation that works for you so you can maintain a consistent table turnover rate. With that being said, there are a few marketing and operating strategies that work for all restaurants:

The Menu

A woman selecting an item on a digital menu

The heart of every restaurant is the menu. You need to decide which types of food you’re going to serve and at what time of day you’re going to serve them. 

Assess the ingredients for a particular dish on the menu and then carefully try to figure out how many ingredients you need for a batch of food. You can then calculate the costs of the ingredients. 

Procurement of Food

To create any meal on the menu in a restaurant you will need to procure the ingredients list first. You need to start making relationships with wholesalers and suppliers so that you can get discounts on the highest quality products. 

You will also need to make sure you have a good balance of fresh food and shelf staples.


Every restaurant is going to have staff regardless of its size. Even restaurants that don’t have a storefront, need to have their ghost kitchen software operated by staff.

You need to make sure that you have enough staff for the day-to-day operations of the restaurant while maintaining your budget. 

This is especially true when you are starting out. You may want to cross-train your staff to make sure that they are capable of multiple tasks. 

Your staffing needs will help you estimate the cost of labor. 


You cannot successfully run a restaurant without having sufficient marketing. Marketing your restaurant adequately is key to running a successful business. 

The first thing you should focus on is your signage. Make sure that you create a good logo and a tagline so that people can identify your business as soon as they enter the location.

You can also try using billboards to help grab attention for your business, this is especially useful for your grand opening events. You can have directional signs as well so that people can know where you are located when they are at different miles from your building.

You should have a social media strategy in place for your business. Your social media is where you will interact with your customers and tell them more about your business.

You can also interview the staff as well so that people feel more connected to you as a business. Social media is also a great place to increase your brand awareness. 

Your website is also something you should be focusing on to ensure that you are presenting the best image for your business. Consider taking online orders from customers because it will increase the number of places that customers can access your restaurant.

How to Improve Restaurant Operations On a Budget

As mentioned before, you need to make sure that you are managing your restaurant properly to maximize the labor in your business. If you want to improve your operations on a budget, efficiency is also a must. Here are some tips to help:

Check Cash Flow

The cash flow in and out of the business is important. Keeping a daily record of the cost of operations will give you a good idea of how the business is functioning.  

It will make it easier for you to understand your profits as well as any losses you are incurring from the business. Always make sure that you take the time to evaluate this. 

It will make a world of difference in how you go about your daily operations.

Use Energy Efficient Appliances 

As a new restaurant owner, you should always be trying to save money. One way of doing this is by having energy-efficient appliances in your business. 

You should take the time to invest in bulbs that are low energy, and change the faucets and toilets so that they use less water. Try to find energy-efficient appliances such as refrigerators, and dishwashers.

Use Software

POS screen

You need to make sure that you are using some kind of inventory system to monitor your business. Restaurant management software can help you to manage your budget effectively. 

You also need to know how much each recipe that you prepare in your restaurant will cost you. Your inventory and your recipes should be aligned. This will stop you from buying things you don’t need and wasting ingredients.

Remember the Best Practices of Restaurant Operations

There are several practices that can help you to follow when operating a restaurant. Following these guidelines will ensure that you make good decisions for your restaurant. 

Remember to market your business effectively or you will not be successful. Make use of everything that is at your fingertips.

Have great signage, utilize social media, and make your website a place where customers can go to find out more about your business or to make orders. Remember too that the more you interact with your followers on social media, and show them the day-to-day operations behind your business, the more emotionally connected they will feel and become loyal customers. 

Check-out GRUBBRR

As you continue learning about the operating costs, don’t forget to explore restaurant technologies that are helping the restaurant industry tackle challenges such as labor shortage. One such technology is self-ordering kiosks. GRUBBRR kiosks have proven to improve customer experience, increase sales, reduce wait times and increase average ticket size. Check-out GRUBBRR today to learn how these technologies can help your business.