Setting up any business from scratch requires a lot of planning as well as investment. Having funds in hand does not mean you can spend them on any and every urgent need. Instead, you need to plan and identify the areas that require specific expenses.
Capital expenditure planning not only helps with smooth setup but also allows to manage the funds smoothly. You can do your own research and plan the expenditures and set up or refer to professional services for better planning.
Scroll down into the details of this article to get your hands on capital expenditures to set up a restaurant from scratch and prepare accordingly to make the venture successful.
Top 5 Capital Expenditures of Restaurant Setup
Capital expenditures are the cost expense a business needs to make in order to set up or maintain the quality of service. Setting up a restaurant business from scratch will require huge investments due to the multiple costs involved in it. Having a clear idea about the factors requiring significant expense can help you plan better and manage your finances efficiently.
Here are some of the basic capital expenditures of setting up a restaurant business you must know and prepare for before diving into it.
1. Land Lease or Ownership
Land lease or ownership is the foremost capital expenditure you must keep in mind while setting up a restaurant from scratch. You cannot set up a restaurant without a space. Depending on the funds in hand, you can choose to buy or lease land or even rent a perfectly furnished property. Paying close attention to the locality, type of lease, and other applicable terms and conditions is extremely crucial to reach a reliable decision.
Not many authorities are experts in conducting the type of market research required for it and end up with the wrong choices. Others prefer to hire expert restaurant consultants in Dubai and choose to lease or buy land according to recommendations and ensure the best interest of the business.
2. Licenses
Licenses are the next major capital expenditure in terms of setting up a restaurant from scratch that you must know about. Setting up a business in itself requires a license from the state authorities. Besides this, restaurant authorities require a lot of other permits and licenses to run the businesses successfully.
The ones top on the list include food safety license, fire safety license, food consignment license, pork permit, and liquor permit. The authorities need to reach out to the concerned department, complete the required paperwork, submit the license fee, and prepare for any inspection if required. After that, the license will be processed in due time and you will be able to carry on your operations.
3. Kitchen Equipment
Kitchen equipment is one of the heftiest capital expenditures in terms of setting up a restaurant from scratch. You will have to invest in cooking and food processing ranges according to the type of your restaurant. You will also need to set up a washing station with a dishwasher and other necessities.
Most importantly, you will need to spare extra funds for cooking utensils and crockery for the guests. On the other hand, if you are setting up a fast food setup and intend to offer deliveries and takeaways only, you will have to plan the cost of disposable boxes. Moreover, you can also keep the cost of beverage and coffee machines in mind to make the right estimate.
4. Interior Designing
Interior designing is the next capital expenditure for setting up a restaurant business from scratch. Highly demandable menu and quality food only are necessary for business success but these alone cannot guarantee success.
Interior design plays an inevitable role in defining and shaping the success of a restaurant business. In this era of social media trends and influencer culture, many people are influenced to visit an eatery to explore its interior design. Depending on the concept you want to create, you will have to onboard interior designers and bear the cost of supplies and services.
5. Marketing
Marketing is the last capital expenditure of setting up a restaurant business from scratch that you must know about. Setting up a business and waiting for the target audience to reach you is not the right approach. You must invest in promoting your business and spare significant funds for it.
Instead of relying only on traditional marketing, you can invest in digital and social media marketing equally. Such mediums are more popular and have better reach to the target audience. Moreover, you can also invest in SEO and Google search ads to further boost your reach. You can also hire a restaurant consultancy in Dubai and let experts design and manage your marketing and establish the success of your business.
Do You Need Help With Capital Expenditure Planning For Your Restaurant?
It will define and set the success of your business, so do not take it lightly. If you lack professional skills and expertise, do not hesitate to onboard the experts and plan your restaurant setup cost smoothly and efficiently.
