At KLC, we have been helping aspiring restaurant owners with funding for years. Restaurant equipment, though quite expensive, is a necessary investment if your business is to succeed and thrive. It is estimated that, when financing equipment for restaurants, a person should be prepared to spend between $110k and $120k.
But there’s more expense involved in starting a restaurant than just kitchen equipment.
Here are some of the less frequently considered expenditures you should be prepared for when you start up a restaurant business:
1.) Insurance – You will need a policy that protects your restaurant from daily losses that can happen during the day-to-day of your operation. You will want to verify that your coverage includes property damage, accidents, theft, and workman’s comp.
2.) You will be stocking from scratch – Unless you are stepping into an existing restaurant business, you will need to stock everything. Along with food, you’ll need a variety of items ranging from napkins to dishes, from silverware to paper towels. You will need cleaning agents, flatware, tables and chairs…
The list is long and the chances of you stocking everything you need before opening day is slim. Chances are, you’ll be acquiring things you need for months after your first customers have arrived. Be prepared to spend more than you think you will on this step.
3.) Advertising – This one is overlooked at your peril. They say word of mouth advertising is the best kind and, while that’s certainly true, consider this: when was the last time you were talking with your friends and you recommended anything?
That’s not to say these discussions don’t happen, they certainly do, but not as frequently as you might think. If someone asks you who a great mechanic is, you’ll talk about mechanics. But if the subject doesn’t come up, your mechanic won’t get his endorsement that day.
Not everyone will be talking about your restaurant all the time. It will happen sporadically, naturally and it will help you grow when it does. But you cannot count on your restaurant being on people’s lips every day. You must be in front of them. Remember, most of the biggest companies in the world advertise. If it didn’t work, they wouldn’t spend money on it.
We hope these tips will be helpful. If you have questions or would like to discuss restaurant financing options, we hope you’ll contact us. We would love to help you get started on your dream.