EPOS Direct Can you afford to run a restaurant?

Rent

As a restaurateur, one of the biggest costs you will have to pay is the rent of your premises. Many premises will require a deposit to secure your place as the habitant of the premises. The deposit will also cover any damages which the premises suffers. The deposit will be a significant cost which means that you will need to use your personal savings so that you can place the deposit. When you are renting an establishment, you will usually be charged a fixed amount on a monthly basis. The cost of your rent will depend on the size of your establishment. It is recommended for you to have the funds available so that you can cover the rent of your establishment for the first year. This is because during the early stages of your restaurant, you will have a low income which means you will not generate enough profit to pay your rent.

Utilities

When you are running your restaurant, you will incur the substantial cost of paying for utilities. The three main utilities your restaurant will require are: water, gas and electricity. If you do not invest into utilities, you will be unable to open your restaurant as you will not be able to power your equipment and other components of your restaurant e.g. boiler and lighting. When you purchase utilities, you will enter a contract with the supplier. The contract will include the cost of your utilities and your usage terms. You will usually be charged on the amount of utilities that you use per month. This means that you will be charged on a monthly basis for the usage of utilities. Remember, the costs of your utilities will depend on the size of your establishment as the bigger establishments will use a larger amount of utilities.

Decoration and Furniture of your Restaurant

Once you have an establishment, you will need to purchase all of the furniture or decoration for your restaurant. This means that you will have the cost of hiring an interior designer and will have to pay for all of the materials needed for the decoration of your restaurant. When you purchase your establishment, your establishment will be empty. This means that you will have to pay for your kitchen and bar area to be installed and will have to purchase all of the equipment that your restaurant will require. Once your restaurant is decorated and your kitchen is equipped, you will have to purchase all of the tables, chairs and cutlery. Due to the expensive costs of preparing your restaurant, you will require a substantial amount of personal investment. If you cannot afford the equipment of your restaurant, you will not be able to open.

Supplies

Do you have sufficient stock? Before you can begin to serve your customers, it is vital for you to find a reliable supplier who will be able to provide you with the supplies needed to produce high quality meals. Many suppliers will require you to enter a contract with them, which will be valid for a specified period of time. You will usually be asked to pay for your supplies on a weekly basis and will receive orders on a weekly basis. When you are ordering supplies, it is important that you predict how many customers you will receive as this will ensure that you order the correct amount of supplies. If you order an excess amount of supplies, it will lead to the supplies not being used and being wasted. This will significantly increase your costs. During the early stages of your restaurant, you will receive a low traffic of customers which means you will not need a substantial amount of supplies. As your restaurant becomes established, you will receive a higher traffic of customers which will increase your costs as you will need a larger amount of supplies. Many restaurateurs will recommend that you have the funds available to cover your first year’s cost of supplies. This will ensure that you are always able to order more supplies. If you do not have the supplies needed to serve your customers, you will struggle to succeed. Are you financially capable of opening a restaurant?