Restaurant Portion
Hello,
I believe you need to revisit the restaurant portion of your business as $60,000 for setting up a commercial kitchen seems far too low. [I did not see where the place you have was a former restaurant or not]. You indicate that you will try and keep it simple, but fryers (if 35lb gas or greater fryers), grills require type 1 hood w/ansul, thus a hood requires proper air exchange. Hoods can get pricey depending on building configuration. Even if the place was a restaurant, if really old, then I suspect newer Health Department regulations will require substantial changes that can cost tens of thousands of dollars. If no commercial kitchen existed, I bet you are looking at $150,000 or greater to build it as minimally as possible. Our Health Dept. requires MEP drawings of electrical/plumbing to be submitted (minimum $6K), plus specs on all equipment used (for a new Health Dept license), does yours? Any building we have looked at buying we get a structural engineer to review the flooring as restaurant is heavy and many old buildings will not support the weight w/o reinforcement.
My partner and I are doing a brewpub as well, and this is our 2nd venture into owning a restaurant (my partner is a 25year veteran as an owner/chef), and yes, it really is a restaurant with beer brewed onsite and your investor is wise to view (from a financial perspective) that way. Most of your startup costs and headaches will be the restaurant portion, there are just so many costs associated with restaurant setup and once you are up/running you will not believe how many more checks will be written unexpectedly. One financial consideration I think is worth mentioning is a newer theory concerning infrastructure costs vs revenue. It suggests that one adds up all infrastructure costs (Rent/NNN/Utilities) and that per month the costs need to be around 10% of revenue, ie, rent/nnn $4000/mo, $1000 utilities indicates one should have $50,000/month revenue. Also, Food/Labor should be 65% or better of revenue.
Staffing is a nightmare from a restaurant owner’s perspective, then consider loss & loss prevention (both customer and employee), spoilage, inventory control, and menu planning and many other things (including sewer issues (my favorite-yuck!)). I digress.
Anyway, it is not simple to do food in an establishment, an example is a tiny brewery that did frozen pizzas in a toaster oven and the health department made them do all sorts of improvements, that cost them a few thousand dollars, which does not sound bad, but costs go up exponentially (it seems to me) in a restaurant environment.
Best Wishes on your venture!! Once you get past the startup and losing money phase, it is a blast, much better than a desk job!
Hello,
I believe you need to revisit the restaurant portion of your business as $60,000 for setting up a commercial kitchen seems far too low. [I did not see where the place you have was a former restaurant or not]. You indicate that you will try and keep it simple, but fryers (if 35lb gas or greater fryers), grills require type 1 hood w/ansul, thus a hood requires proper air exchange. Hoods can get pricey depending on building configuration. Even if the place was a restaurant, if really old, then I suspect newer Health Department regulations will require substantial changes that can cost tens of thousands of dollars. If no commercial kitchen existed, I bet you are looking at $150,000 or greater to build it as minimally as possible. Our Health Dept. requires MEP drawings of electrical/plumbing to be submitted (minimum $6K), plus specs on all equipment used (for a new Health Dept license), does yours? Any building we have looked at buying we get a structural engineer to review the flooring as restaurant is heavy and many old buildings will not support the weight w/o reinforcement.
My partner and I are doing a brewpub as well, and this is our 2nd venture into owning a restaurant (my partner is a 25year veteran as an owner/chef), and yes, it really is a restaurant with beer brewed onsite and your investor is wise to view (from a financial perspective) that way. Most of your startup costs and headaches will be the restaurant portion, there are just so many costs associated with restaurant setup and once you are up/running you will not believe how many more checks will be written unexpectedly. One financial consideration I think is worth mentioning is a newer theory concerning infrastructure costs vs revenue. It suggests that one adds up all infrastructure costs (Rent/NNN/Utilities) and that per month the costs need to be around 10% of revenue, ie, rent/nnn $4000/mo, $1000 utilities indicates one should have $50,000/month revenue. Also, Food/Labor should be 65% or better of revenue.
Staffing is a nightmare from a restaurant owner’s perspective, then consider loss & loss prevention (both customer and employee), spoilage, inventory control, and menu planning and many other things (including sewer issues (my favorite-yuck!)). I digress.
Anyway, it is not simple to do food in an establishment, an example is a tiny brewery that did frozen pizzas in a toaster oven and the health department made them do all sorts of improvements, that cost them a few thousand dollars, which does not sound bad, but costs go up exponentially (it seems to me) in a restaurant environment.
Best Wishes on your venture!! Once you get past the startup and losing money phase, it is a blast, much better than a desk job!
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