Starting a restaurant is a common entrepreneurial dream, and in today’s market, that dream is not impossibly out of reach. The hospitality and food service industry will always be necessary, because people always need to eat.
But how much are the expected startup fees? Should you get a bank loan? How much profit should you expect during your first year? These questions should be taken seriously before embarking on your new adventure. Here’s some more information to help you get started.
Current restaurant statistics
Statistics suggest that people eat at restaurants far more often than they used to. In fact, millennials dine out more than their parents ever did, and they spend considerably more when they do.
There is definitely a need for new, fresh, and innovative restaurants, both in small-town Canada and in larger metropolitan areas like Toronto and Vancouver. With more and more young people going green, vegan and vegetarian restaurants are increasingly popular in cities from coast to coast. Convenience, ethically sourced food, and vegan menu options are all factors which are massively important to today’s consumers.
If you’re interested in starting a restaurant here in Canada, this is arguably the most valuable piece of advice to take from those in the know. Millennial dining trends paint a clear picture of a rapidly shifting demographic. Nevertheless, in the midst of any economic recession, the most challenging part of starting a restaurant is still likely to be financial.
Restaurant startup costs
Startup fees range drastically, depending on your location, how much renovation is necessary, and other factors. If you’re opening a tiny mom-and-pop diner in your Alberta hometown versus a luxury four-star restaurant in the heart of downtown Vancouver, your startup costs will be considerably lower, and you could fund the project yourself with minimal debt.
For the sake of simplicity, let’s assume that you’re a traditional Canadian restaurant owner. You have selected a building in a key location, and your restaurant is an average size, approximating 1,200 square feet. The cost of the security deposit, monthly rental fees, and maintenance will total approximately $70,000 CAD for the first six months.
Renovation is very likely to be the more expensive undertaking, with interior decor, equipment, and kitchenware averaging $150,000 CAD. You may wish to order marked-down glassware products, which means you should look for local supply companies like VEGA Direct.
Staffing and employees
Despite the behind-the-scenes work you’ll do to maintain your restaurant’s brand, the grunt work is done on the front lines and most people judge a business by its customer service before anything else. Even if your decor is flawless and your chef is top-ranked, if your waitstaff are disappointing, you’ll be sure to find poor reviews on your Yelp page.
Ensuring that your staff does a good job means choosing a solid team. Smaller is better, and it will save you money in the long run, too; depending on the minimum wage in your province and whether you hire part-time or full-time employees, you might pay more or less to staff your restaurant. You’re likely to spend at least $2,500 CAD per employee.
Branding, marketing, and public relations
In the age of Instagram, branding and marketing has never been more important. Negative online reviews can kill a restaurant’s reputation faster than you can type in the address on Google Maps. Similarly, a low SEO rank on Google can ensure your business gets lost.
If you use a professional PR agency, you might be dishing out $40,000 CAD annually, but fortunately, you don’t have to. In this day and age, lots of independent influencers are willing to promote you for a lot less. Foodies take their lifestyle seriously and plenty of bloggers would love to collaborate with you. Reach out to some local influencers and offer them a chance to review your restaurant, perhaps during the soft launch.
