Written by The Pragmatic CFO. 15+ years running restaurant P&Ls.
This article is part of The Operating Costs Series.
The honest answer is the total of your own quotes, plus a contingency, plus three months of cash. Most opening budgets have the first number and skip the other two. That’s where openings run out of money.
Prefer to watch? Here’s the video version, with the worked example.
The line items
- Build-out: walls, plumbing, electrical, HVAC, hood, finishes. Usually the biggest line, and the one that moves most with the space.
- Kitchen equipment: cooking line, refrigeration, dish, smallwares.
- Furniture, fixtures and decor: seating, bar, lighting, signage.
- POS, tech and security: terminals, network, cameras, music.
- Permits, licenses, legal and design: architect, engineer, building and health permits, liquor license, lease review.
- Pre-opening payroll and training: managers before opening, staff for training week.
- Opening inventory: food, beverage, paper and cleaning supplies.
- Launch marketing: soft opening, signage, local ads.
- Deposits: rent, utilities.
A worked example
Here’s a 60-seat example. These are illustration numbers, not benchmarks. Your quotes replace every one.
| Line | Example |
|---|---|
| Build-out | $350,000 |
| Kitchen equipment | $150,000 |
| Furniture, fixtures and decor | $60,000 |
| POS, tech and security | $15,000 |
| Permits, licenses, legal and design | $40,000 |
| Pre-opening payroll and training | $45,000 |
| Opening inventory | $20,000 |
| Launch marketing | $10,000 |
| Deposits | $25,000 |
| Opening costs | $715,000 |
| Contingency, 10% | $71,500 |
| Cash reserve, 3 months of $40,000 fixed costs | $120,000 |
| Total to raise | $906,500 |
That’s about $15,100 a seat. The last two lines add $191,500, or 27% on top of the quote sheet.
Run your own numbers in the opening cost calculator.
What moves the number most
- Second-generation space: a former restaurant with a hood, grease trap and walk-in can cut build-out sharply. A raw shell pays for all of it.
- Liquor: licenses cost very different amounts by state and city. Get the real number from your local licensing office before you sign.
- New vs used equipment: used refrigeration and stainless are often fine. Buy new where a failure shuts you down.
- Landlord money: a tenant improvement allowance or free rent months is cash you don’t have to raise. Ask for both.
Check it against break-even before you sign
Take the fixed costs you used for the reserve, add the loan payment on what you’ll borrow, and run the break-even calculator. If you need more guests a day than the room can seat on a normal night, the budget doesn’t work yet. Change the space, the rent or the plan before you change the spreadsheet.
Once you’re open, the first months are about cash, not profit. The 13-week cash flow model is built for that stretch, and how much cash a restaurant should keep covers the reserve.
Free: The Restaurant Financial Health Checklist. 30 monthly checks across sales mix, prime cost, 4-wall EBITDA, cash and operations, with the target ranges I use. Written by a former chain CFO. Instant PDF.
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More on this: how to build a restaurant budget.
Turn the budget into a break-even and a cash plan.
The Toolkit includes a break-even model and a 13-week cash forecast, the two numbers a lender and your own nerves will ask about first.
Get the Toolkit, $67FAQ
How much does it cost to open a restaurant?
Your quotes, plus a contingency of at least 10%, plus three months of fixed costs in cash. In the 60-seat example that’s $906,500 on a $715,000 quote sheet.
What’s the biggest cost?
Usually the build-out. A second-generation space can bring it down a lot.
How much contingency should I add?
At least 10%. More for an old building or a new kitchen.
How much cash should I have on opening day?
At least three months of fixed costs.