Restaurant Startup Cost Calculator

Restaurant startup costs typically range from $50,000 for a food truck to $750,000 or more for a full-service restaurant. The main cost drivers are build-out and renovations (usually 30-40% of total budget), kitchen equipment (15-25%), and working capital for the first 3-6 months of operation (15-20%). Location significantly impacts costs, with high-cost markets like New York, San Francisco, and Los Angeles running 30-50% higher than average.

Plan for 3-6 months of operating expenses as working capital. This typically means $20,000-$50,000 for a food truck, $50,000-$150,000 for fast casual, and $100,000-$300,000 for full-service restaurants. Working capital covers rent, payroll, utilities, inventory, and unexpected expenses while you build sales volume. Many restaurants fail not because of a bad concept, but because they run out of cash before becoming profitable.

The largest restaurant startup expenses are typically: 1) Build-out and renovations (30-40% of total) including leasehold improvements, kitchen construction, and dining room finishing; 2) Kitchen equipment (15-25%) including cooking equipment, refrigeration, ventilation, and smallwares; 3) Working capital (15-20%) for operating expenses during ramp-up; 4) Licenses and permits (5-15%) with liquor licenses being especially variable by state; 5) Initial inventory and marketing (5-10%).

Liquor license costs vary dramatically by state and license type. Beer and wine licenses typically cost $3,000-$15,000. Full liquor licenses range from $10,000 in states with unlimited licenses to over $300,000 in states like New Jersey where licenses are limited and must be purchased from existing holders. Some states like California have relatively affordable licenses ($15,000-$20,000), while others require purchasing from a broker at market rates. Always research your specific state and municipality before budgeting.

A second-generation restaurant space is a location previously occupied by another restaurant, meaning much of the infrastructure is already in place: commercial kitchen hood and ventilation, grease traps, floor drains, gas lines, electrical capacity, and sometimes equipment. Taking over a second-gen space can save $75,000-$150,000 or more compared to building out a vanilla shell or converting a retail space. The tradeoff is less control over layout and potentially inheriting old equipment or code compliance issues.

Opening a restaurant typically takes 6-12 months from signing a lease to opening day. Timeline breakdown: lease negotiation and signing (1-2 months), permits and approvals (2-4 months, highly variable by jurisdiction), construction and build-out (2-4 months), equipment installation and health inspections (2-4 weeks), staff hiring and training (2-4 weeks). Second-generation spaces with minimal construction can open in 3-4 months. Complex build-outs or difficult permitting can extend to 18+ months.

Most restaurant startups use a combination of personal savings (typically 20-30%), SBA loans (best rates at 6-13% APR), traditional bank loans, or online lenders. SBA 7(a) loans are popular for restaurants, offering up to $5 million with 10-25 year terms. Equipment financing can cover kitchen equipment specifically. Use our Business Loan Calculator to see monthly payments and total costs for different loan scenarios.