An Honest Look at the Cost of Equipment and Supplies for a New Restaurant

"I'm considering opening a new restaurant, and I would like to know how much I'm going to have to spend on equipment and supplies."

Hardly a week goes by where we don't get a call asking this or similar types of questions of customer service representatives or of the contract sales department. This question may be from an individual putting together a business plan in an effort to raise capital, or as the result of a bank request for someone applying for a business loan, or it could merely be a person considering changing careers and trying to figure out just what it would take to open a new food service operation.

Whatever the reason, it's typically not an easy question to answer. The right way to come up with an equipment and supply budget is to identify the space required for the kitchen and dining room at a specific location; produce a food service equipment layout; decide on exactly what equipment is required; choose china, glassware, and silverware; and, finally, put together an opening small wares package.

In the real world, however, this is not always possible. Many times, without a realistic budget, a lease is not going to be signed, nor is an architect going to be hired. So how is a new potential food service operator going to get a realistic handle on just what the food service equipment, as well as supplies, is going to cost? The answer is a difficult one.

Many years ago, a restaurant that has grown to be one of the more popular eating establishments, not only in the Boston marketplace, but all of New England, started out in a small location just north of the city. The entire cooking line consisted of one six-burner range, a single convection oven, a counter-model fryer, and a tilting braising pan. The full kitchen project was completed for less than $25,000. The restaurant was busy six nights a week, had seating for 75 people, was never without a wait, and the food was, and continues to be, fantastic.

On the other end of the spectrum is a recently completed 225-seat, extremely busy casual dining restaurant with a labor-intensive menu. The food service equipment cost for this project came in at approximately $350,000 -- without supplies.

Let's take as an example a 125-seat, mid-range casual dining restaurant. What should the budget be for kitchen equipment? Our experience tells us that a "safe number" is somewhere between $50,000 and $75,000. Could you spend $100,000 on a project like this? Easily. Could it be done for less than $50,000? Not likely.

The variables, however, are many. Areas that tend to drive the price up are walk-in refrigeration and exhaust systems. How varied will the menu be? Can certain pieces of cooking equipment service multiple functions? What options are necessary? Does the equipment have to be all stainless steel, or will stainless steel tops and fronts suffice? Is a $1500 garbage disposal needed, or will a trash barrel do? As you can see, the question is indeed complicated.

Supplies are slightly easier to budget, but not much. How many different types of glasses will be used? What quality level is desired for both china and flatware? How many turns are anticipated during lunch and dinner? Once again, using an example of a 125-seat mid-range casual dining restaurant, we can budget the following: china at $35 to $40 per place setting for 1.5 turns is approximately $7,000; flatware and glassware combined is typically about the same cost as the china, another $7,000. A realistic number for the balance of the small wares, including stockpots, steam table pans, whips, ladles, cutlery, storage containers, janitorial supplies, etc., is $10,000, for a total supply budget of $24,000. Could a new operator spend twice this amount? In the blink of an eye. Could he or she open with less? Definitely.

All food service operators know the investment is significant. In our example, this 125-seat casual dining restaurant is somewhere between $75,000 and $100,000. And don't forget, this is only one piece, although a very important one, of the entire project.

Jerry Hyman,President
TriMark United East Foodservice Supply Co.

For more information, contact Jerry at jhyman@trimarkusa.com.

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