Do you want to start a burger restaurant and want to know the cost? If YES, here is a cost breakdown to open a burger restaurant and the profit margin/ROI. The burger restaurant line of business has minimal barriers to entry, with low startup capital and no specific licensing requirements and the capital costs of establishing burger restaurants are not substantial relative to many other restaurant industries, such as fine dining restaurant or fast food restaurant.
On the other hand, the high level of competition and market saturation in a declining industry can prove challenging to aspiring entrepreneurs who want to start their own shop. Most players in the burger line of business are small to medium sized establishments that cater to the local community.
No doubt the burger restaurant line of business is profitable and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale in a street corner like the average mom and pop business or on a large scale with several outlets in key cities or buy an existing and successful burger restaurant franchise.
The Estimated Cost Breakdown to Open a Burger Restaurant
When it comes to starting a standard burger restaurant business, one is expected to spend the bulk of the startup capital on renting a restaurant and kitchen facility. Aside from that, you are expected to purchase furniture and kitchen utensils, large stock of burger making ingredients (you can actually go into credit agreement with flour importers or flour production companies), paying of your employees and utility bills.
In view of that, here are the key areas where you are expected to spend your startup capital on;
- The total fee for registering the business in the united states of America – 0.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the burger restaurant in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring business consultant including writing a business plan – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $46,000.
- The cost for kitchen remodeling (construction of racks and shelves) – $5,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500) – $3,000
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
- The cost for start-up inventory (stocking with flours, vegetable oil and other ingredients and packaging materials) – $30,000
- Zoning Expenses – $1,000
- Storage hardware (bins, rack, shelves, food case) – $3,720
- The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
- The cost for store equipment (cash register, cash and inventory control system, security, ventilation, signage) – $13,750
- The cost of purchase and installation of CCTVs, and car tracker devices – $5,000
- The cost for the purchase of furniture and gadgets (frying pans, oven, microwave, dishwasher, refrigerator, blender, serving wares, computers, printers, telephone, TVs, sound system, tables and chairs et al) – $9,000.
- The cost of launching a Website – $600
- The cost for our opening party – $3,000
- Miscellaneous – $1,000
From the rough estimate as listed above, you would need a minimum of two hundred and ten thousand, one hundred USD ($210,100) to establish a medium-scale but standard burger restaurant business in any city in the United States of America.
Please note that this is a rough estimate and we usually advise our readers who are interested in opening a burger restaurant to go to the market or directly contact sellers of the items (cooking utensils, Food service equipment (microwave, toasters, dishwasher, refrigerator, blender, etc.), Storage hardware (bins, utensil rack, shelves, food case),
Counter area equipment (counter top, sink, ice machine, etc.), receipt issuing machines, sound system (for playing music), Point of Sale Machines (POS Machines), CCTV cameras and flat screen TVs and other supplies) they would need to get the real time prices of these items. The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.