All the Costs you need to know throughout the Starting Process of Your Restaurant
Starting a restaurant business is not an easy feat. It takes dedication, a lot of time and financial resources to lift a restaurant business off the ground.
Here, we will take a look at the most common costs that all restaurants, cafes, and other food businesses will incur in the starting phase.
These cost examples are based on sources in Dubai, United Arab Emirates and mostly considered as averages. Costs and expenses in the F&B industry will vary greatly (can get much higher or lower) based on the following factors:
Location (Barsha, Down Town, Business Bay, Deira,..)
Concept of the business (High end, modern, sport themed, Ethnic,...)
Type of establishment (fast food, Full-service restaurant, Café, Cafeteria, Bar,...)
Contractors, Suppliers pricing and market conditions
Let's take a look at the main start-up cost categories for a restaurant in Dubai:
Fixed Startup Costs
Fit-out Contractor (Flooring, AC, Signage, Wall modifications)
Kitchen Equipment (Grills, Fridges, Working Tops, Oven)
Furniture, Fixtures and Equipment - FF&E (Tables, Chairs, Cutlery, Serving)
Coffee, Juice, Bar, Buffet Equipment
Operational Startup Costs
Licenses and Government Approvals (Name reservation, Trade license, Smoking permit, Design approvals)
Rent and Occupancy costs (Shop rent, Commissions, Deposits, VAT)
Employee registration costs (Visas, Insurance, Emirates ID)
Employee Accommodation costs (Staff accommodation, FF&E)
Employee Salaries
Initial Inventory budget
Advertising and Marketing budget
Accordingly, we can get a general idea of the main startup cost drivers for the restaurant.
For this information to be more helpful, here we compiled a table summarizing the average cost per square feet for each of the above categories:
Now for an example..
Assuming we find a retail space suitable for Food & Beverage sized at 1,500 sqft/140 square meters, renting for AED 60,000.
To start a restaurant at that location, the total costs would be close to the following:
So the target budget for such a space should be around AED 790,000-800,000.
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