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Finding the ideal mix between having a rock-solid strategy in place before you start and leaving yourself enough flexibility to adjust or pivot the plan on the fly is key to learning how to launch a restaurant successfully. Although nothing ever goes precisely as planned, arming yourself with knowledge can help.

How to finance restaurant startup costs

Thinking about starting a restaurant is thrilling. the people, the setting, and the cuisine. But when you start thinking about how much money you truly need to launch a restaurant, reality may soon take the wind out of your sails. Dealing with unforeseen costs and hidden fees while operating a restaurant is one of the major hurdles you’ll encounter.


The best advice is to not spend more than 10% of your total restaurant sales on a lease. The ideal range to aim for is between 5% and 10%. However, the cost of your lease will be significantly influenced by the location of your restaurant. For instance, it seems sensible that the price will be closer to the lower end of the range, at about 5% to 8%, if the site is in a small town or suburban area. Aim to spend $40,000 to $64,000 per year for your lease if you expect sales at your restaurant to be $800,000. Avoid signing leases that are closer to 15% of your restaurant’s sales; you don’t want to find yourself in that predicament.

That extra 5% will significantly affect your profit margin and prohibit you from setting aside money for other crucial factors.

Business licensing

Make sure to register your firm before delving too far into how to write a restaurant business plan. Each state requires that all new restaurants register with them. Depending on the type of business you’re opening, there will be different rules (e.g. sole proprietorship, partnership, LLC, etc.). There is a charge associated with each business registration, which is often in the $100 to $1,200 range. Make sure to compare registration prices for one-time use versus yearly renewal. Some states demand a one-time flat cost from firms, while others charge a percentage of sales. You may quickly search Google for “business license” and the name of your state because each state will have its online license center. For the most accurate information on different business types, how to register your business, and where to locate applications, look for a government website.


There will always be regions where you have blind spots when finding out how to operate a restaurant, regardless of your prior experiences and skills. No need to venture out on your own. Knowing your skills and weaknesses is essential when hiring restaurant specialists to handle highly specialized tasks like accounting, law, and real estate.

Restaurant licenses, permits, and insurance

Every city has a unique set of insurance, licensing, and permission requirements. Numerous elements, such as your restaurant’s location, square footage, and staff size, will influence how many of each you require. Deposits for each sort of insurance are frequently required from companies like restaurants, so the cost can mount up rapidly. To ensure you have all the necessary documentation, be careful to verify with your attorney and the local regulations as soon as you can. Restaurant owners must get several licenses and permissions, much like any other service-oriented business. Many of these criteria have small fees attached. If you want to refurbish, have outdoor seating, or sell alcohol, each of these things needs to be done.

Some licenses and permits need a lengthy application process. Seriously. It takes a lot of patience. It is therefore essential to begin the application procedure as soon as possible so that you can remove each piece of red tape one at a time. The number of licenses and permits required to open a restaurant will vary. Due to the variety, many city offices have resources that enable restaurateurs to determine their needs before submitting applications.


Insurance may not be the most exciting subject, but knowing that you are covered will help you sleep easier at night. Additionally, you must ensure that you understand how to defend both your business and yourself from legal actions and claims.


You’re well on your way to realizing your goal now that you know the essentials of starting a restaurant. Keep in mind that you are never alone on your trip. You have access to a wide range of tools and resources, and many other restaurant owners are eager to impart their wisdom. You have the basis for significant success and long-term growth as long as your strategies, methods, and reporting are well-thought-out and well-documented. Good fortune.