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Does the idea of serving smoking hot barbeques excite you?
Well, every person who loves food, cooking, or hosting would have entertained the idea of opening their own restaurant at least once in their entire lives.
Well, if you are someone who has finally decided to entertain that idea and open your own BBQ joint, this cost blog is for you.
It offers a clear understanding of how much does it cost to start a BBQ business and helps you calculate the actual costs for your own BBQ venture.
Ready to dive right in? Let’s get started.
What is the cost of starting up a BBQ business?
The average cost of starting a BBQ restaurant in the US varies between $81,000 and $353,000. However, these costs are largely influenced by the location, concept, and size of your BBQ diner and can be significantly different for different BBQ restaurants.
In terms of profitability, the average restaurant profit margins vary between 0-15%. However, BBQ businesses can enjoy a net profit of 5-10% if managed properly with operational efficiency.
Average costs for starting a BBQ business
Before we dive into details, check out this BBQ restaurant startup cost checklist. It will help you plan your startup budget and know how much financing you need to get started.
| Item | Average Cost |
|---|---|
| One-time Expenses | |
| Lease Deposits | $4,000-$20,000 |
| Kitchen Equipment | $20,000 to $75,000 |
| Restaurant Renovations | $20,000 to $150,000 |
| Leasehold Improvements | $5,000 to $20,000 |
| Inventory and Food Supplies | $4,000 to $6,000 |
| Hiring and Training | $5,000 to $15,000 |
| Licensing and Permits | $2,500 to $7,500 |
| Business Insurance | $1,200 to $5,000 |
| POS System | $2,000 to $5,000 |
| Marketing and Advertising | $2,000 to $8,000 |
| Website Development | $300 to $2,000 |
| Signage and Branding | $1,000 to $5,000 |
| Professional Fees | $0-$10,000 |
| Business Registration | $150-$300 |
| Business Plan | $150-$300 |
| Total One-Time Expenses | $67,300 to $329,100 |
| Recurring Expenses (Per Month) | |
| Lease/Rent | $2,000 to $4,500 |
| Utilities | $800 to $1,200 |
| Staff Wages | $6,000 to $8,000 |
| Restocking Inventory | $4,000 to $6,000 |
| Marketing and Advertising | $500 to $2,000 |
| Miscellaneous | $500 to $2,000 |
| Total Recurring Expenses | $13,800 to $23,700 |
| Total | $81,000- $3,53,100 |
Using this BBQ business startup cost checklist, you can plan your startup budget and get an idea of how much financing you will need.
How to calculate the cost of starting a BBQ business
You now have a list of potential expenses and a rough estimate of your startup costs. Let’s estimate your actual startup costs using these two proven methods.
The first, traditional method involves using a startup costs calculator to estimate the startup costs. However, the second, the Upmetrics method, is an innovative method that uses the Upmetrics financial forecasting tool.
Let’s understand both methods so that you can choose one that suits your requirements the best.
The traditional method—startup costs calculator
The calculator includes categories such as pre-trading, website setup, marketing, operations, and people. You can enter the estimated costs in each field and let the calculator estimate the costs for you.
Remember that many startup costs fall under recurring expenses, so cover those costs monthly, quarterly, or annually.
Calculate your startup costs using this calculator.
The Upmetrics method—financial forecasting tool
It is an intuitive and efficient method of calculating startup costs. Using Upmetrics will not just help you estimate startup costs but also help with financial forecasting.
All you need to do is enter your sales, costs, and other financial assumptions and let the tool calculate monthly/quarterly/ and yearly projections for you.
Check out the financial forecasting tool for accurate financial forecasting.
Pro-tip
Check out the financial forecasting tool for accurate financial forecasting. Once you have an accurate estimate of startup costs, you can easily identify funding requirements for your lawn care and other landscaping businesses.
Once you accurately estimate startup costs, you can easily identify funding requirements for your BBQ business.
Raising funds for a new startup is nerve-wracking and time-consuming, but having a solid BBQ restaurant business plan can make things a lot easier.
Let’s move ahead and discuss the factors that affect your BBQ restaurant startup costs.
Factors that affect BBQ startup cost
From location to marketing, payroll, and legal expenses—here are all the costs associated with starting a BBQ restaurant.
1. Location and Concept of BBQ Restaurant
Whether you decide to open a BBQ restaurant in a thriving metropolitan like New York, a booming state like Texas, or some rural suburban region—location will largely influence your BBQ restaurant startup costs.
From lease rental to payroll, remodeling, and other operating costs—everything is directly influenced by the location you choose.
For instance, the lease expenses in New York average at $980 per sq. ft. However, if you choose a moderately thriving location, it is quite easy to find commercial space for $15-$30 per sq. ft.
Now, the nature and concept of your BBQ restaurant will also play a significant role in determining the costs of your eatery business.
For instance, opening a diner that sits people is going to cost more than starting a counter-service BBQ joint. However, if we are comparing different ventures, setting up a food truck is more cost-efficient than any other option.
That being said, the location and concept of your diner will influence your initial capital requirements.
2. Rent and Mortgage
There are certain ways to move ahead with the location of your BBQ business and each has different costs associated with it.
To begin with, if you are planning to buy a shop, it is going to cost you approximately $150-$250 per sq. ft. depending on the location and size of the diner.
However, be prepared for upfront costs of $40,000-$150,000 to make a downpayment.
On the contrary, leasing a space would cost you between $20-$30 per sq. ft. generally and the monthly lease would account for anywhere between $2,000-$4,500. However, it can be as high as $12,000 for diners in New York and San Fransisco.
Additionally, budget anywhere from $4,000-$20,000 for security deposits to finalize the deal.
3. Construction, Remodeling, and Decor
Ambiance and decor are an important part of BBQ restaurants adding significant costs to your start-up expenses.
Now, are you planning to construct a BBQ diner from ground level up?
If so, be prepared to pay at least $130 per sq. ft. for construction. This is expensive and will bring your overall construction costs between $130,000- $210,000.
However, if you have no intention of spending extravagantly on construction and renovations, it is better to get a space with pre-made kitchen facilities. This will help you save considerably on your remodeling costs.
In such cases, it is possible to put together a simple and beautifully furnished BBQ diner for as little as $5,000. For high-end diners, BBQ restaurant owners can budget up to $20,000 for decor.
This would include costs for basic leasehold improvements like painting, flooring, utility connections, lighting, and furniture.
Now, finalize the budget for remodeling and ensure that you stick through it.
4. BBQ Equipment and Appliances
Another prominent cost for BBQ restaurant owners is equipment and appliances essential to prepare food.
Now, the common BBQ equipment you will definitely need are pit smokers, barbeque grills, ovens, stoves, refrigerators, freezers, and fryers.
The costs for these could vary between $10,000-$50,000 and sometimes even more depending on the variant and model you choose.
Additionally, you will also require a hood system, prep tables, storage containers, serving cutleries, and cleaning equipment for your restaurant business.
The costs for these would cost you an additional $10,000-$25,000.
Identify what other equipment you will need and add their costs to your start-up expense checklist.
5. Food Material Costs and Inventory
Take your BBQ restaurant business plan and identify food materials and supplies essential to prepare items on your menu.
Generally, the average food cost for a BBQ restaurant business is 30% of the menu price. This is quite significant and therefore it’s essential to budget for food costs while calculating your start-up expenses.
Now, what will you require?
A variety of meat and poultry depending on your menu offerings. Additionally, vegetables, a variety of fruits, spices and condiments, sauces, and special ingredients if any.
Now, you cannot store meat and fresh produce for long. Hence building a large inventory makes no sense. You need just about enough to get you through the opening week.
Budgeting around $4,000-$6,000 every month for a mid-sized diner is sufficient.
Now, if you are planning to serve alcohol and cocktails, the costs would soar significantly higher.
Depending again on the menu, the cost of building an initial inventory of spirits and beers would vary between $2,000-$20,000.
6. Payroll and Wages
People will keep coming back for the food they get at your BBQ restaurant. Hence, it has to be perfect.
However, to serve those perfect cuisines and to keep your BBQ restaurant feasibly operational, you will need a team of people.
A couple of chefs, servers, cleaners, and receptionists depending on how large or small your BBQ restaurant will be.
According to BLS, the average annual salary of a head chef in the US varies between $42,950 and $56,520. Additionally, hiring cleaners and servers on an hourly basis will cost you anywhere between $8-$17 per employee.
Considering a team of head chef, 2 servers, and a manager, you can expect your monthly payroll to vary between $6,000-$8,000.
However, payroll expenses are just not the only costs associated with employees. You need to consider their hiring and training costs for which you need to budget $5,000-$15,000 initially.
7. Legal Fees and Insurance
Setting up a restaurant business legally and compliantly has many associated costs. Including them in your BBQ restaurant start-up costs is essential to get a correct estimate.
Firstly, the cost of registering your BBQ restaurant as a business entity would vary between $150-$500 depending on the location of your BBQ restaurant.
Since you are starting a business in the food industry, you will have to get a food service license from the health department. The costs for these varies between $2,500-$7,500.
Additionally, a couple of other permits like an occupancy permit, sign permit, and fire department permit would cost you an additional $150-$300.
Now, if you are planning to sell alcohol, you need to acquire a liquor license the costs for which substantially vary between $1,000-$40,000 depending on the state and location.
Considering the insurance aspect, you will need general liability, worker’s compensation, and food contamination insurance. The costs for premiums would vary depending on the coverage, however, $1,200-$5,000 annually marks a good start.
8. Marketing and Advertisement
You can’t expect the people to flood your gates just by opening a BBQ restaurant. You need to brand, advertise, and market your diner rigorously and smartly to attract your target customers.
Now, is website essential to attract your target audience. If so, budget $300-$2,000 for building a functional and clean website.
Additionally, a BBQ restaurant owner needs to spend money on signage boards and posters, the cost for which can vary between $1,000-$5,000.
Further, the cost of advertising in newspapers and distributing pamphlets and leaflets would cost a couple of thousand dollars, i.e. $500-$1,200.
Spreading your presence online is equally essential. Spending on social media, paid ads, emails, and content marketing should vary between $500-$2,000 initially before you start spending more.
And lastly, account for the costs of a grand opening or even a soft launch, if that fits your business planning. You can spend as much as you want, however, $500-$1,500 is quite sufficient.
Think of other marketing alternatives that BBQ restaurants in the neighborhood use and see if that fits your style. Budget for those costs as well, if you are planning to implement new strategies.
9. Professional fees
A restaurant owner will need the help of other professionals in setting up and running their BBQ joint.
Here are a few professional services you can consider availing of for your business:
- Legal services: Helps with business set-up, licensing, and overall compliance and costs you up to $5,000.
- Designer and decorator: If your goal is to save money initially, this option may sound expensive. However, ambiance is essential and designers can help put together the right feel for your restaurant. Their fees vary between $5,000-$15,000 and sometimes up to $50,000.
- Restaurant consultant: Consultants can help in creating a profitable restaurant venture, though, their fees can cost you up to $1,000 per consultation.
Identify the business areas where you might need help and avail professional services so that you can focus on important restaurant matters.
And those are pretty much all the costs associated with starting BBQ restaurants. Let’s now find some practical ways to bring down your initial capital requirement.
Tips for reducing BBQ startup costs
Here are some cost-effective ways to start your restaurant business without spending a lot.
1. Start with a small diner
Start with a small restaurant space to bring down your all other expenses. Start small and build your brand and a loyal customer base before you start with franchises or larger restaurants.
2. Counter service model
If your target audience seems like people who enjoy frequent takeaways, start with takeaway only. Don’t offer dine-in service. This will help you save on space, employees, decor, and a lot many other expenses.
3. Buy a ready diner
Instead of building an entire BBQ business from scratch, buy an already existing diner. This will help you bring down your overall start-up costs significantly.
4. Buy used furniture
Furniture is one aspect where you can compromise a bit. Keep an eye out on garage sales and second-hand deals to find the best furnishing pieces at cost-effective rates.
Conclusion
And that’s it. By now you have a thorough understanding of the costs of starting a BBQ diner in the thriving restaurant industry.
What next? Let’s now calculate the actual costs for your BBQ restaurant using our startup cost calculator and secure essential funding.
Use Upmetrics for Accurate Startup Cost Projections!
Looking to estimate your startup costs? Dive into Upmetrics! Our business plan software makes financial forecasting a breeze
