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How Much Does It Cost to Start a Korean BBQ Restaurant? (Sales Forecast and Breakeven Analysis Included)

To open a Korean BBQ restaurant in the United States, you should prepare to spend a reasonable sum of money, and it could range from $250,000 to over a million dollars.

This is because you are expected to spend money on leasing and equipping the facility amongst other expenditures that come with starting a Korean BBQ restaurant business.

Estimated Cost Breakdown for Opening a Korean BBQ Restaurant

  1. Lease and Renovations: $75,000
    • Security deposit for lease
    • Renovation to suit Korean BBQ setup (e.g., ventilation, interior design)
  2. Kitchen Equipment and BBQ Grills: $50,000
    • Commercial grills, stoves, and ovens
    • Refrigerators and freezers
    • Dishwashers and other kitchen tools
  3. Furniture and Fixtures: $30,000
    • Tables with built-in grills
    • Chairs and decor items
    • Serving and dining ware
  4. Initial Food and Beverage Inventory: $20,000
    • Meats, vegetables, spices, and sauces
    • Beverages including alcoholic and non-alcoholic options
  5. Licenses and Permits: $15,000
    • Health department permits
    • Liquor license (if applicable)
    • Business operation permits
  6. Point of Sale System and Software: $10,000
    • POS hardware and software
    • Reservation and management software
  7. Marketing and Advertising: $15,000
    • Grand opening event
    • Initial marketing campaigns (online and offline)
    • Branding materials (menus, signage)
  8. Staff Training and Wages: $25,000
    • Hiring kitchen and wait staff
    • Initial training for staff on Korean BBQ service
  9. Utilities and Miscellaneous: $10,000
    • Gas, water, electricity, and internet setup
    • Contingency fund for unexpected expenses

Total – $250,000

3-Year Sales Forecast and Breakeven Analysis

Initial Capital: $250,000

  • Fixed Costs: Monthly expenses like rent, utilities, salaries, etc.
  • Rent: $5,000 per month
  • Salaries (staff): $8,000 per month
  • Utilities (gas, electricity, water): $2,000 per month
  • Marketing & other fixed expenses: $1,500 per month

Total Fixed Costs per Month: $16,500

Total Fixed Cost per Year: $198,000

Variable Cost: Costs directly related to the volume of business (Food supplies, beverages, etc.: 30% of sales)

  • Year 1: Average monthly sales of $30,000, reflecting the startup phase and gradual customer base build-up.
  • Year 2: 20% growth in sales as the restaurant gains popularity.
  • Year 3: Further 15% growth in sales with established customer loyalty and potential price adjustments.

Year 1:

  • Total Sales: $360,000
  • Variable Costs: $108,000
  • Fixed Costs: $198,000
  • Total Costs: $306,000

Year 2:

  • Total Sales: $432,000
  • Variable Costs: $129,600
  • Fixed Costs: $198,000
  • Total Costs: $327,600

Year 3:

  • Total Sales: $496,800
  • Variable Costs: $149,040
  • Fixed Costs: $198,000
  • Total Costs: $347,040

Breakeven Analysis

Breakeven Sales Monthly: $23,571.43

Based on the above analysis, your Korean BBQ restaurant is projected to grow sales by 20% in Year 2 and an additional 15% in Year 3 following the initial startup year.

The restaurant needs to generate at least $23,571.43 in sales each month to cover all fixed and variable costs, thereby reaching the breakeven point.

Factors That Determine the Cost of Opening a Korean BBQ Restaurant

  1. The Size of the Korean BBQ Restaurant

It is far cheaper to start a small-scale Korean BBQ restaurant than start a standard restaurant facility or even a drive-thru. The cost of renting, equipping, and operating a standard restaurant facility will consume the bulk of your budget, and it does not come cheap.

  1. The Location Where You Want to Start the Korean BBQ Restaurant

In the United States of America, some cities are pretty expensive to start a business, while some are quite cheap. High rent, labor costs, and stricter regulations in major metropolitan areas drive up expenses.

Conversely, cities with lower costs of living and doing business offer cheaper real estate, wages, and operational expenses, making it more economical to start a restaurant in these locations.

  1. The Cost of Equipping Your Korean BBQ Restaurant

If you have plans to start a standard Korean BBQ restaurant, it means that you are required to rent or lease either a restaurant, or a commercial kitchen facility, and then go on to equip the facility with the needed equipment, electronics, and furniture.

Aside from getting comfortable furniture such as stools, sofas, tables, shelves et al, you will also need electronics such as flat-screen televisions, sound systems, and perhaps a public address system.

For your cooking utensils and equipment, you will need grill tables, ventilation hoods, tongs, scissors, charcoal or gas burners, meat slicers, refrigerators and freezers, stainless steel prep tables, rice cookers, banchan (side dish) serving plates, exhaust fans, and dishwashing equipment, et al.

  1. The Number of Staff You Want to Recruit

The only reason why this might not be an issue for you is if you choose to start your Korean BBQ restaurant with your family members handling all aspects of the restaurant.

But if you choose to start a standard restaurant business, then you must make plans to recruit and train key employees who will occupy different roles in your organization. You should make plans to recruit a manager, an accountant or cashier, cooks or chefs, servers, delivery guys, and kitchen staff.

  1. The Cost of Obtaining the Needed Licenses and Permits

This cost may vary across different states and cities in the United States. As expected, you should budget for a business license, food service permit, health and safety, permit, liquor license, zonal permit, signage permit, operational state facility inspections, live entertainment license, music license, a dumpster placement permit, amongst others.

  1. Your Ongoing Expenses

Ongoing expenses for a Korean BBQ restaurant are unique to the restaurant owner and their preferences. Basically, for a Korean BBQ restaurant, you should budget for supplies such as cured meats, cheeses, pickles, olives, crackers or bread, mustards or spreads, and nuts or dried fruits.

Apart from that, you should also have a budget for regular maintenance and repair of equipment, such as blenders, refrigeration units, and food processors, and for utilities such as electricity, water, gas, and internet services.

  1. Miscellaneous Expenses

When it comes to miscellaneous expenses for a Korean BBQ restaurant, but you may decide to include the cost of hiring and paying tax consultants, the cost of branding, promotion, and marketing the restaurant, the cost for logistics and outreach, your insurance and premiums, the cost of the purchase and customizing of uniforms for your employees and volunteers, and the cost for the grand opening of the restaurant as part of your miscellaneous expenses.