Costs to Expect When Starting a Restaurant in the UK
Starting a new restaurant in the UK can be an excellent business venture and investment. However, there are several types of costs that you must be aware of so that you can plan your restaurant financing appropriately. With the right knowledge, you can budget your business expenses properly and make it a success in the long term.
Budgeting your expenses is essential if you want to start your business on the right track. Keep a realistic perspective on the costs of opening and running your restaurant so that you can allocate your resources effectively. There are several different costs to account for, including property charges, legal charges, premises costs, fit-out costs, and more. This article will provide you with estimates on these different costs so that you know how to finance a restaurant in the UK.
Costs to Expect When Starting a Restaurant in the UK
The figures below are only estimations of the costs to expect. You can get even better deals if you find the right sellers, so be sure to keep looking for what property is available for your business.
Here are the costs to expect when starting a restaurant in the UK so that you can plan your business from now.
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Premises Rent Costs
The highest cost that you must keep in mind when restaurant financing is the rent of the premises. More popular locations in the UK will have higher rent. If you’re looking to open a restaurant in the middle of London, you will have to pay a rent of at least £70,000. Larger spaces will also cost more, so you will have to determine how large your restaurant to be in the short and long term.
You should also ensure that the rent is low enough for you to manage other expenses such as staff and service costs. Moreover, pick a location that fits the theme and concept of your restaurant. Considering this is a significant investment, you should make sure that the location is perfect for your idea. In addition to that, the premises should have the A3 license, from 1 September 2020, for purposes of Use Class, A1/2/3 & B1 to be treated as Class E, more info here, allowing you to serve hot food in the space.
Property Charges to Your Estate Agent
You will have to pay your estate agent property charges before you acquire a space for your new restaurant in the UK. You can expect to spend an amount of approximately between £1,000 and £5,000. The exact amount will vary depending on who the agent is and the quality of their services. In addition to that, you will have to bear the costs of hiring a surveyor to create an energy efficiency report for the premises. The figure range mentioned above includes these costs as well.
Legal charges are essential to keep in mind when considering restaurant financing options. You will need to hire a solicitor to handle the contracts with your estate agent and the owner of the premises. Moreover, you will need a solicitor’s services for securing various necessary licenses to start your own restaurant business. In that case, you will need to pay your solicitor an hourly rate for their services.
On average, the cost for legal fees is about £100 per hour for a consultation. You will also have to pay an additional £20 for every application or letter, and you’ll have to pay about £10 for every phone call. The exact fee structure will depend on the specific solicitor and the extent of their services. Make sure to secure one that’s not too expensive but has a good reputation for their services.
You will only know the fit-out costs for your new restaurant in the UK after you pick a location. Some premises may already have a kitchen installed, which can help reduce your fit-out costs. However, if the kitchen is not to your specifications, you will need to invest in remaking it. It’s best to prioritize your kitchen equipment costs when considering restaurant financing options because they will ensure that your services are up to the mark. For example, a restaurant with a complex menu will need specific kitchen equipment, cutlery, utensils, etc., to ensure you make the foods correctly for an authentic experience for your patrons.
In addition to the kitchen, you will have to spend money on tables, chairs, lighting, signage, and so on while making sure that all fit the aesthetic design of your restaurant theme. Try not to spend too much money on getting custom-made seating at the time of opening. Instead, save those costs and use restaurant financing options to invest in things, such as signage and lightings, that’ll help your restaurant stand out from competitors. If you’re operating on a tight budget, you can also look into purchasing some used equipment. You always have the option to upgrade later.
Cost of Staffing
Make sure not to underestimate how much you’re going to spend on your staff every month and year. Your staff is the people that make your restaurant a success or failure. Therefore, you must ensure that you keep top talent happy with their jobs by paying them well and offering them satisfactory benefits options.
You must also ensure that you have an appropriate number of staff members to handle all business operations. This way, you’ll experience minimal hiccups to your workflow. With all that said, a restaurant staff member earns about £25,500 per year in the UK.
Last Few Words
Now that you know the costs to expect when starting a restaurant in the UK, you can plan your business correctly. If you want your restaurant business to succeed, you must budget your expenses properly and avoid cutting corners on necessary investments.
If you feel this article will help you with your restaurant business and want to read more, visit our website’s blog section. We have many restaurant trade secrets, and we have experienced restaurant consultants to provide you with professional advice.