Top 5 Expenses Restaurant Owners Face

If you eat out a lot, you’ve perhaps thought about owning your own restaurant business some day. But the truth is, starting and running a successful restaurant is not easy. Therefore, before diving into this business, it is important that you understand the numerous costs involved and ensure you can cover them comfortably. Here are top 5 expenses you’re likely to face as a restaurant owner:



Without food, you don’t have a restaurant. The cost of food covers everything ranging from fresh produce, canned goods, fresh meat, seasonings, to even napkins. Therefore, it’s not a surprise that it takes a large part of a restaurant’s expenses. Your budget may initially be based on the menu you’ll open the restaurant with. However, as time goes, at least 20% of the food items you were thinking to serve will be tweaked to suit your customer’s needs. If preparing the new items on the menu requires a new equipment, you’ll incur more expenses.



Apart from food, paying employees is another ongoing expense that restaurant owners must cover. Examples of labor costs include wages, salaries, service commissions, unemployment taxes, the cost of training employees, and the cost of providing them with uniform. You need to forecast your labor needs carefully in order not to schedule too many or too few employees.



If you don’t own the building where your restaurant is located, you’ll have to pay rent. This expense can be very steep, especially is your business is located within town on a busy street. Other than rent, you will also need to pay for installation of air ventilation systems and air conditioning systems, electricity, water, signage and parking.



Having the right insurance policy will help keep your restaurant business afloat should something bad happen unexpectedly. Property insurance and liability insurance are some of the policies that every restaurant owner should have. A restaurant property insurance will protect you incase your business gets damaged either through fire or other sources. Liability insurance on the other hand, will protect you from liability if your employee gets injured while on duty, or falls sick from eating food that is not prepared properly.

Permits and Licenses

Permits and Licenses

Lastly, as a restaurant owner, you also have to incur the costs of obtaining your business permits and licenses from the relevant state and county authorities. Licensing rules differ from state to state, so be sure to adhere by the rules in your state or county to enable you get these important documents faster.

These are just a few of the expenses you’ll incur as a restaurant owner. Others include marketing, equipment, technology, general supplies, fixtures as well as repairs and maintenance. Take time to think through and budget for these expenses in order experience a smooth and successful launch of your restaurant business.