Restaurant startup costs: a line-by-line checklist
Half of the owners in a 2018 survey spent between $175,500 and $750,500 to open their restaurant (median $375,500) [1]. The median was $225,500 for limited-service restaurants and $475,500 for full-service ones [1]. The space drives much of the cost: taking over a former restaurant cost far less than building new.
Startup costs, line by line
Use these as a starting point, and get real quotes before you sign or buy.
| Cost | What to expect |
|---|---|
| Survey totals, not a sum of the lines below | Middle half of owners: $175,500–$750,500. Median: $375,500 [1] |
| Pick one: total cost by type of space | |
| Taking over a former restaurant space | $125,500–$550,500 for the middle half of owners in the 2018 survey [1] |
| Converting a space that wasn't a restaurant | $225,500–$850,000 in the 2018 survey [1] |
| Building new | $375,000–$1,125,000 in the 2018 survey. The survey's press release says the median for new builds leaves out the cost of land [1] [2] |
| Security deposit and rent before opening | Set by your lease, so ask the landlord. Count every month of rent from signing to opening day, including build-out and inspections [5] |
| Utility deposits and connection fees | Set by each utility and your space, so ask each one, and ask the landlord who pays for upgrades [5] |
| Design and build-out | About $100–$800 per square foot [4]. In the 2018 survey, the median owner spent $200,000 on construction, and the median restaurant was about 3,070 square feet [1] |
| Kitchen equipment | About $50,000–$150,000 for a full commercial kitchen, plus delivery and installation [4] [5] |
| Furniture and decor | About $10,000–$50,000 or more [4] |
| Smallwares, tableware and linens | Depends on your menu and seat count, so price it from your own list. |
| Business registration | Usually under $300, depending on your state and business structure [11] |
| Licenses, permits and inspections | About $50–$500 for a business license and $100–$1,000 for a food service license. Fees depend on where you are and what you do [4] [11] |
| Liquor license, if you'll serve alcohol | From about $50 to over $300,000, depending on the state and how many licenses are available. Ask your state's alcohol agency before you sign a lease [4] [11] |
| Insurance | About $337 a month for a business owner's policy, which bundles general liability with property coverage, so you don't buy both. That's the middle figure: half of Insureon's customers, mostly businesses with fewer than five employees, paid more and half paid less. Liquor liability is about $45 a month if you serve alcohol. Hiring? Ask your agent about workers' comp [6] |
| Point of sale | About $59–$399 per card reader or terminal, and $0–$149 a month for software. You may also need printers, kitchen screens and a network [8] [7] [5] |
| Pre-opening payroll and training | About $20,000 at the median in the 2018 survey [1] |
| Opening food, drink and supplies | Depends on your menu, so price it from your opening order. |
| Branding and launch marketing | Depends on what you plan, so get quotes. |
| Cushion for surprises | About 10%–20% of your total budget. See the cushion and money to run on [9] |
| Money to run on while sales build | See the cushion and money to run on [10] |
Where these numbers come from
The totals come from a 2018 RestaurantOwner.com survey of its members, mostly independent restaurants, and its report doesn't say whether land or cash for after opening is included [1]. Most line ranges come from Square and Toast, which sell to restaurants and don't show their math, so use them for scale and build your own number from the lines [4] [5].
We make a spreadsheet for exactly this: the Simple Restaurant Opening Planner lists these lines and adds them up for you, in Excel or Google Sheets. See what's in it
Weighing a food truck instead? Our food truck startup costs guide breaks those costs down the same way.
The cushion and money to run on
Set aside two amounts on top of your build-out budget, and keep them apart. Toast treats them as separate amounts too [5].
- A cushion for surprises. This covers what you can't price yet, like problems behind walls, change orders or a quote that goes up. SCORE puts a common reserve at about 10%–20% of your budget [9]. In a RestaurantOwner.com survey of 626 owners (2018), the median opening ran 15% over budget, and a quarter ran 45% or more over, so 10% may be thin [3].
- Money to run on. This pays rent, payroll and suppliers after you open, until sales cover them. The SBA suggests counting at least a year of monthly expenses when you work out how much money you'll need [10]. A 12-month cash flow projection shows how much of that early sales might cover [9]. In a made-up example from Toast, payments running $15,000 a month ahead of sales for four months leave a $60,000 gap before any buffer [5].
Costs to price before you open
Beyond the big lines in the table, these are easy to leave out. Skip what doesn't apply to you.
- Before you sign a lease: a lawyer to review it, any broker fee, and an inspection of the space.
- While you build: an architect or designer, permit and plan review fees, outdoor signs, and money for changes once work starts.
- Equipping the room: dishwashing, refrigeration and prep gear, glassware, and the network, phones, security and sound system.
- Getting ready to open: hiring ads, uniforms, a website, photos, opening promotion, practice meals for staff, and a deep clean.
- Money and paperwork: lender fees, an accountant, and setting up your books.
Costs people forget
- Rent while you build, and delays. Rent can start long before sales do, and each extra month adds rent, loan payments and sometimes payroll. Toast suggests working out what one more month without sales would add [5].
- Utility upgrades and connection fees. Toast cites one Florida owner who expected about $56,000 in utility impact fees [5]. Ask the utility and the city before you sign.
- Delivery and installation of equipment, plus any plumbing or electrical work it needs [5].
- Pre-opening payroll and practice food. Training shifts and practice service cost wages and ingredients before you take a sale [5].
- Landlord money that arrives later. If the landlord pays part of the build-out, get in writing what it covers and when the money arrives [5].
- Renewals. Licenses and permits renew, so budget for them as a yearly cost, not a one-time one [5].
- Card fees once you open. Square charges 2.4% to 2.6% plus 15¢ per in-person card sale, depending on the plan [7].
Taxes
The IRS has separate rules for business costs you pay before you open [12]. Ask a tax professional how they apply to you before you start spending, so you keep the right records from the first receipt.
Replace guesses with quotes
Before you sign or buy, get two or three written quotes for each big cost: the build-out, equipment, signs and insurance. The SBA suggests talking directly to vendors and service providers, and notes that permits and licenses tend to have published costs [10]. Then keep a cushion for what you still can't price [9].
Ask before you sign a lease. Ask your local building and health departments what plan review and inspections apply to the space. Have a contractor check the ventilation, fire suppression, grease handling, plumbing and electrical, the kitchen systems Toast says to check in a build-out estimate [5]. A former restaurant may already have some of them. Requirements and fees differ by location, so ask the offices that cover your address [11].
Do 90% of restaurants fail?
A study of restaurants in Columbus, Ohio, from 1996 to 1999 found about 26% failed in the first year and 59% within three years (61% for independents) [13]. It counted a change of owner as a failure, not only a closure [14]. Its author said he could find "no evidence of a 90 percent failure rate anywhere" [13].
How this guide is made. Researched and drafted with AI tools. A separate AI review checked the figures against the sources listed, on the dates shown, before we published it. This is general information, not legal or tax advice. Editorial policy
Sources
- RestaurantOwner.com. Independent Restaurant Cost to Open Survey Report (summary, PDF; survey released Nov 2018) (checked Oct 2026)
- PR Newswire. How Much Does It Cost to Open a Restaurant? - Over 350 Independent Restaurant Owners Share Their Startup Costs and Financial Performance (RestaurantOwner.com release, Nov 15, 2018) (checked Oct 2026)
- RestaurantOwner.com. Industry Survey: How Much Does it Cost to Open a Restaurant? (page dated April 2018 in its metadata) (checked Oct 2026)
- Square. How Much Does it Cost to Open a Restaurant? (checked Oct 2026)
- Toast. How Much Does It Cost to Open a Restaurant in 2026? (checked Oct 2026)
- Insureon. Restaurant Insurance Cost (checked Oct 2026)
- Square. Square Processing Fees, Plans, and Software Pricing (checked Oct 2026)
- Square. POS Hardware and Equipment (checked Oct 2026)
- SCORE. Startup Expenses (template) (checked Oct 2026)
- U.S. Small Business Administration. Plan your business: Calculate your startup costs (checked Oct 2026)
- U.S. Small Business Administration. Launch your business (register your business; apply for licenses and permits) (checked Oct 2026)
- Internal Revenue Service. Publication 583, Starting a Business and Keeping Records (checked Oct 2026)
- Ohio State News. Restaurant failure rate much lower than commonly assumed, study finds (2003) (checked Oct 2026)
- Parsa, H.G., et al. Why Restaurants Fail. Cornell Hotel and Restaurant Administration Quarterly 46(3), 2005 (PDF hosted by the University of Denver) (checked Oct 2026)
