Tabulating the Cost of Opening a Restaurant in Toronto
There are so many details that must be considered when starting up a new restaurant. Calculating the costs can be daunting. Design, equipment, staffing, supply management, it’s hard to know where to begin. Here is a brief overview of how to start the process of tabulating the cost of opening a restaurant in Toronto.
Dream a Little
Before embarking on the nuts and bolts of building a restaurant from the ground up, dream a little. It’s that dream and a passion to see it realised that will sustain the project moving forward. Decide what kind of restaurant it will be – cozy neighbourhood café or vibrant brew pub? Have a clear idea of the concept of the restaurant, what kind of food will be served and the atmosphere that is going to be created around it. Pick a name that reflects that concept. Decide on what location serves the kind of clientele you want to attract. Rent will be one of the most significant costs, so consider the location carefully before moving forward. Is the restaurant going to bring in foot traffic or will you need plenty of parking? What kind of design will allow for comfortable seating while giving the kitchen enough space to work efficiently? Once you’ve conceived your dream, write it up. You will be asked to pitch your concept many times, so make sure you are clear about what you want.
Assemble a Comprehensive Business Plan
A business plan that lays out how the dream will become a reality is essential. There is a fair amount of research that will have to be done before crunching numbers. The business plan should have start-up costs, projected running costs and sales estimates. If you are new to creating a business plan, an excellent resource is the Government of Canada’s Business Network site, where there are sample business plans and templates to get you started. A well executed business plan will help work out any potential problems, help owners enter into a venture clear-eyed about all the costs, while it will also be an important document for securing financing. Be sure to consider liquor licenses, health and safety codes and tax laws.
Once a solid business plan is in place, the difficult question becomes: how is it all going to be paid for? Inevitably, a new restaurant venture will need outside financing. A big operation will likely need a bank investment. Before approaching a bank, be sure to be well prepared for the interview, with your crisp, well researched business plan ready to go. Banks can be difficult to deal with- don’t hesitate to approach a smaller finance company.
One of the most significant costs of starting up a restaurant is the cost of equipment. Good quality stoves, refrigerators, smokers, steamers, fryers and dishwashers can be very expensive. When starting up or expanding an existing establishment, securing financing from one of the smaller finance companies can make smart economic sense, especially a financial specialist that specializes in working with the food industry. Financing options can be:
- pre-approved line of credit
- working capital loan
- a combination of all four
The cost of opening a restaurant in Toronto involves many variables. Do your research. Put together a business plan. Then speak to a financial specialist that can help you bring your dream to life.