Opening a restaurant is not just about cooking great food or decorating a welcoming space. Behind the excitement of starting a business and the passion for the craft lies a more down-to-earth reality: financial management. In fact, the success of a restaurant depends as much on its cuisine as on its ability to remain profitable in the long term. Understanding costs, anticipating expenses, and using the right tools are essential levers to ensure the sustainability of your business.
To ensure your restaurant’s viability, it’s crucial to clearly understand where your money is going. Between fixed costs, the price of raw materials, payroll, and technological investments, each expense category deserves careful attention. In this regard, some tools, such as an HACCP software, can not only help ensure sanitary compliance but also optimize internal processes and improve efficiency. Let’s take a look at the main costs to plan for effective management.
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What Are the Different Costs of Running a Restaurant?
Financial management of a restaurant revolves around three main areas of expenditure. Understanding and anticipating them is the first step toward healthy and sustainable operations.
Equipment and Management Tools
Beyond the initial investment in kitchen equipment (oven, stove, refrigerators…) and dining room furniture, modern day-to-day operations rely heavily on essential digital tools. These software subscriptions come with monthly or annual fees but often offer a quick return on investment.
- POS system: Essential for taking orders, processing payments, and analyzing sales. Often integrated with online booking systems.
- HACCP software: Mandatory to ensure product traceability and compliance with hygiene standards. It digitizes your cleaning schedules, temperature logs, and allergen management—saving valuable time and ensuring you’re audit-ready.
- Inventory management tools: To monitor stock levels in real time, place optimized orders, and reduce waste.
These subscriptions can range from a few dozen to several hundred euros per month, depending on the solution chosen.
Staffing Costs and Fixed Expenses
This is often the largest expense for a restaurant owner. It includes more than just the net wages paid to your team.
- Payroll: This includes gross salaries as well as employer contributions, which can represent a significant portion of the total cost. In the restaurant industry, payroll typically accounts for 30% to 40% of revenue.
- Fixed expenses: These are monthly costs you must pay regardless of how busy the restaurant is. They include:
- Commercial rent
- Insurance (professional liability, comprehensive coverage, etc.)
- Utility bills (electricity, gas, water)
- Subscriptions (phone, internet, software)
- Loan repayments
- Local taxes and fees (CFE, etc.)
Cost of Raw Materials
The cost of raw materials, or “food cost,” refers to the price of all ingredients (food and beverages) used to prepare your dishes. It’s a variable cost directly tied to your activity level.
For healthy profitability, the food cost ratio (cost of raw materials / menu price excluding VAT) should be kept in check. Ideally, it should range between 25% and 35%. A ratio that’s too high eats into your profit, while one that’s too low may suggest poor perceived quality. Detailed recipe costing sheets, savvy supplier negotiations, and active waste reduction efforts are key to managing this cost effectively.
What Is the Total Budget to Open a Restaurant?
The budget required to open a restaurant varies widely depending on the concept, location, and size of the business. It’s not just about monthly operating expenses, but also a significant initial investment.
Here are the main items to finance:
- Acquisition of the business or payment of a leasehold fee
- Renovation and compliance work
- Purchase of kitchen equipment, tableware, and furniture
- Administrative and legal costs (company formation, licenses)
- Initial stock of raw materials
- Starting cash flow to cover the first weeks of operation before reaching profitability
In total, the budget can range from €50,000 for a very simple concept to over €500,000 for a larger, more ambitious establishment. Before diving in, it’s crucial to thoroughly prepare your project. In fact, here are some key questions to ask yourself before taking the plunge to avoid overlooking anything.
FAQ: Everything You Need to Know
Have specific questions about your future restaurant’s finances? Here are some clear answers.
What Are Considered Fixed Costs in a Restaurant?
Fixed costs are recurring expenses that do not vary with the number of customers served. Managing them well means listing them precisely to determine your break-even point. The main ones include:
- Rent
- Salaries of permanent staff
- Insurance
- Software and service subscriptions (internet, phone…)
- Accounting fees
- Loan repayments
- Professional taxes
How Much Does an Accountant Cost for a Restaurant?
Hiring an accountant—ideally one specialized in the hospitality industry (cafés, hotels, restaurants)—is a strategic investment. They help you optimize your taxes and manage your operations. The fee varies depending on the scope of services (bookkeeping, payroll management, consulting, etc.). Expect a monthly budget of €150 to €500 excluding VAT.
How to Best Manage Your Budget?
Strong budget management is key. Here are some best practices:
- Create recipe costing sheets for every dish to precisely control your food cost.
- Track your key ratios (payroll, food cost, prime cost) weekly.
- Continuously negotiate with suppliers to get the best prices.
- Optimize staff schedules to match peak business hours.
- Fight food waste with impeccable stock management (FIFO method: first in, first out).
