Starting your own Restaurant Business
Posted, February 14th, 2015
Setting up or starting up your own restaurant or cafe business can be an exciting and rewarding experience. It can also be an expensive one. With the popularity of TV programs such as Masterchef and the Ramsay “my kitchen rules” etc we have noticed an increase in enquiries from people looking for a career change. Away from the office nine to five grind to the “exciting” world of running their own restaurant or cafe business.
With all new challenges there are usually many hidden costs.
Setting up any new business especially a restaurant or cafe business from an empty shell can be a very expensive exercise. In a recent article in the Sydney Morning Herald – Good Living there was a quote about a new restaurant ended up costing someone three times its original budget and then went on to quote someone who built a large house for less than the cost of fitting out a 180 m² restaurant. There were further examples mentioned including a restaurants being built with budgets in the millions.
We see & hear the stories all the time.
For example if it cost you $1,000,000 to to create and start your own restaurant/cafe from scratch on the leasehold basis you would have to be turning over $40,000 to $50,000 per week (depending on the standard of service,length of lease and rent paid) to justify that sort of outlay. You still have to take into account interest costs on your money, your time and effort to get all the approvals through.
Like in the choice we have when buying a house. Its always nicer to build your own but as has been shown in the home improvement programs there seems to be many more people making more money renovating. Many restaurants and cafes are sold at a fraction of their replacement costs. We have seen some incredible capital gains in relatively short periods of time.
If you are considering a work or lifestyle change by buying or setting up your own restaurant/cafe it may be worthwhile looking at what is available in the marketplace. You would be surprised. If you still feel that the food & beverage business is what you really want you can still set up your own restaurant or cafe business with the profits after you sell your first one.