When compared to other kinds of businesses, the opening cost of a restaurant is pretty considerable. But, you cannot start a restaurant below $100,000 as you need to bear a lot of start-up costs and expenses. Careful budgeting is necessary to make the most out of the start-up fund. Besides the start-up cost, you need to have the capital for six months or about a year down the track. Without proper funding and resources, your restaurant is sure to fail. In fact, the revenue growth of most businesses is slower than what is expected before opening the restaurant. This is why more capital is needed to bear the expenses.
Anyone looking to open a restaurant must set out the budgeting schedule to buy the items that are needed. It’s helpful to purchase used accessories and items if you are too concerned about how much are restaurant start-up costs. Finding a good building for your restaurant and ensuring that it meets the needs as far as location, zoning, space, and kitchen setup is not a step to take lightly. The cost of setting up can again vary as per the location and whether you are willing to rent a property, buy a property or to build the restaurant from scratch.
How to determine the cost of starting a restaurant?
The ones who have no idea about the cost of starting a restaurant can use a financial projection automated tool to find out the capital needed at every stage of a start up. The software, designed only for restaurant purpose, will give answers to all your questions relating to the cost.
Cost considerations to be made
When starting a new restaurant, the following cost considerations have to be made:
Lease: If you’re leasing a property, be sure to take into consideration the monthly payment to be made, the advance deposit which is required. This can be a few hundred dollars or cost equivalent to the rent for 6-12 months.
Restaurant equipment: You may either buy the restaurant equipment or rent them. Some of the restaurant items include: Commercial fridges Sydney, benchtop equipment, Pizza ovens for italian restaurants, kebab machines, etc.
Beginning inventory: Food, beverage and liquor costs need to be established. It is good to establish rates and payment options as soon as possible with vendors to assure you’ll have your shipments on time and with the correct products.
Renovation cost: When you acquire property for the restaurant business, you may need to change interiors, and the lighting fixtures, carry out painting and rewiring, undertake re-plumbing preferably with an affordable plumber Sydney and shelving.
Permits and licenses: Be sure to keep aside some money to cover the costs relating to health permit, license, and taxes to be paid.
Make your restaurant business successful
If you can serve delicious food items for all seasons whether it is summer, spring, fall or winter, your business will be successful. While menus don’t necessarily need to change per season, it may not be a bad idea to start experimenting with a few items and measure their appeal and customer feedback.
When it comes to winter menu ideas, including warm drinks and beverages can help to add a seasonal flair to your menu appeal. Coffee cocktails, apple cider, and hot cocoa can keep the guests happy and warm.
Sunday penalty rate is the minimum pay rat paid to employees working on a Sunday.
On Monday, 5 June 2017 at 2pm, The Fair Work Commission Australia’s national work place relationship tribunal decided to slash Sunday penalty rates for Hospitality, Pharmacy, Fast food and Retail employees.
Various employer organisations and industry lobbies led by The Australian Industry Group had lodged a complaint with the Fair Work Commission pleading that the commission should reduce the Sunday penalty rate to match the Saturday rate claiming that the rates were unfair and irrelevant. After hearing from all the parties, the Full Bench determined that there should be a phased reduction over the next four years starting on 1 July 2017 until the year 2020.
The phased reduction by industry takes effect as summarized below:
Retail industry full-time and part-time employees will have their Sunday rates reduced by a whopping 50 per cent over a four-year period from the highs of 200 per cent to the lows of 150 per cent.
On the other hand, casual employees will have to make good with a 25 per cent reduction from the current 200 per cent to 175 per cent stretched over a three-year period.
Over a two-year period, fast food level one full-time and part-time employees will have their Sunday penalty rates reduced by 25 per cent from 150 per cent to 125 per cent and 175 per cent to 150 per cent for casual employees.
No cuts for level two and level three fast food employees.
Full-time and part-time hospitality employees will have their earnings slashed from 175 per cent to 150 per cent over a two-year period.
Casual hospitality workers Sunday rates remained at 175 per cent.
Full-time and part-time Pharmaceutical workers working between 7am and 9pm will have their penalty rates reduced by 5 per cent in the first year and 45 per cent over the subsequent three-years and 225 per cent to 175 per cent for casual employees over the same period.
Interested Parties Submissions
Labor union bosses believe that the Sunday penalty rate reduction will negatively affect a significant percentage of the Hospitality, Fast food, Retail and Pharmacy employees.
However, the Council of Small Businesses argued that big businesses employees 80 per cent of workers with enterprise agreements and they will not be affected by the ruling.
The Full Bench was persuaded by the claims that the current Sunday penalty rates had made doing business unsustainable stating that by cutting the Sunday penalty rates they will spark employment in the affected industries.
With the Sunday penalty rates effected, small business owners are rejoicing. It means that the cost of doing business will significantly reduce while the margin of profit expands. Nevertheless, there might be a spike in employment levels in the short-term but it is uncertain whether it will be sustained. However, it will be more affordable to buy expensive commercial combi oven Sydney, which restaurants require to operate.
As highlighted with the changes above the big losers in this debate are the workers, as they will have to do with less than they used to. It might take a toll in some households but the sooner you get across the changes the better.
With over 945,000 restaurant locations in the United States (70 percent of which are independent restaurants) the restaurant industry is a booming part of the private sector. Restaurants in the United States employ over 13 million people, and annual restaurant sales total $558 billion. This is a significant amount of money, but restaurant owners are aware that it takes lots of funds and financing to produce a profit.
Finance & Lease example:
For $10,000 worth of restaurant equipment you only pay $89 per week – that’s only $62 per week (after your Tax benefits!) That’s not much to pay to get what you want to run your business, especially when there’s nothing to pay upfront. In fact you only start paying one week after (not before) your items are dispatched.
With RentLite-Fast and Easy Finance you can apply in store (or over-the-phone) in just a few minutes. Let’s keep it simple…have your ABN, Driver’s License, and Medicare card handy-that’s all you need to apply. Please note that you may be required to provide additional information as part of your application’s assessment.
• Fast and Easy Finance for all businesses including start-ups, new businesses, as well as businesses without company financials.
• Apply in store (or over-the-phone) in just a few minutes.
• $0 Upfront – No Security Bond, No Deposit, and No Documentation Fees.
• Finance from $500 up to $250,000
• Own your equipment over a one, two, three, or four-year term.
• Affordable weekly repayments that are 100% tax deductible*.
• Include the cost of extended warranties and preventative maintenance.
• RentLite the cost of freight (with the equipment) to anywhere in Australia.
• Additional equipment can be included at any time as your business grows.
• Rent-Then-Own your equipment for $1.00 at the end of term.
Just like all other types of merchants, restaurant owners want the best for their businesses, and sometimes this can require money that the restaurant owner does not have on hand. One of the attributes that make restaurants so unique is their offering of goods, services and sometimes entertainment all under one roof. A restaurant that provides an enticing atmosphere, friendly service, and quality meals is almost guaranteed to bring in customers and make sales. Unfortunately, funding such an affair can be a difficult task. A merchant loan can supply restaurant owners with the funds they desperately need, but struggle to attain. One type of merchant loan that is especially practical for restaurant owners is a merchant cash advance. A merchant cash advance can be used in many ways, from helping a struggling restaurant to maintain during a period of slow business, to financing the grand opening of a new location for an already existing restaurant.
Restaurants have daily costs that are typically higher than other types of merchant businesses. And often, a restaurant’s gas water and electricity bills will reflect the inevitable usage of items such as dishwashers, refrigerators, freezers, ovens, and stoves. A merchant cash advance can be used to maintain these payments during times of decreasing sales, helping to keep the restaurant afloat until sales increase.
Also unlike other merchant businesses, restaurants purchase perishable goods. This means, if all of the products that are purchased are not used within a period, they can go bad, causing the restaurant to lose money. A restaurant owner can recover that lost money through a merchant cash advance. There are many other ways to put a merchant cash advance to use as a restaurant owner. It can be used for expansion, to finance promotions, or to purchase inventory such as utensils, dishes, cookware, or even food and drinks. You may want to try offering a new meal; a merchant cash advance can fund the purchase of the additional goods. Are you looking to open a new coffee shop and start the cafe fitout process?
How does it work?
Merchant cash advances are formulated to work based on a business’ credit card sales. Therefore, if your restaurant accepts credit cards, you are one step closer to being eligible to receive a merchant cash advance. When the merchant cash advance is given, a small percentage of the restaurant’s sales is taken as repayment for the loan. Therefore, the more customers use credit cards, the faster the merchant cash advance is repaid. This is particularly advantageous for restaurant owners as based on a survey conducted by the National Restaurant Association in 1999, restaurants with average per-person dinner checks of $25 or more report[ed] credit-card use representing a median of 80 percent of sales, and by 2002 this number had increased. Also as the percentage of people who own credit cards increases so does the usage of credit cards in restaurants.
A merchant cash advance is easily available, and if you meet a few simple requirements, many lenders are willing to provide a merchant cash advance to finance your restaurant.