How much does it cost to start a restaurant?
Estimate the all-in cost to open a restaurant, from a quick-service counter to a full-service dining room. The kitchen buildout and the cash you need before a steady dinner rush are the two lines that decide the number.
Typical range $445,600 – $751,950
- Format & buildout$275,000
- Kitchen equipment$75,000
- Lease deposit + first months$30,000
- Furniture, fixtures & décor$40,000
- POS, tech & online ordering$8,000
- Initial food & bar inventory$12,000
- Licenses & permits$15,000
- Branding & pre-opening marketing$12,000
- Working-capital buffer$90,000
- Total$557,000
§ 02 The return
Read the payback figure against the cell beside it. It assumes you are still trading. BLS follows every new establishment in this sector, and 42.6% of them are shut within five years. The payback number is not wrong, it is just answering a narrower question than it looks like: if you are still open, this is when the money comes back. It does not price the branch where you are not.
The default revenue here is the Census average for this industry, adjusted to 2025 dollars. The profit margin used to work out payback is Calcatrice's own estimate: public data does not publish net profit margin for staffed businesses, and the IRS figure above measures a sole proprietor's take-home, not a company's margin.
§ 03 Effort & commitment
Nights, weekends, and holidays are the job. Few businesses ask more of an owner-operator than a restaurant.
Where the money goes
Does it pay back?
Cumulative cash flow. The line crosses zero the month your cumulative profit has repaid the startup cost.
By the numbers
- THE PAYBACK FIGURE ABOVE ASSUMES YOU ARE STILL TRADING, and until now this page never said so.
More
It is computed from Economic Census receipts, and the Economic Census counts businesses that EXIST: the ones that opened and closed are not in the denominator. BLS Business Employment Dynamics follows every new establishment from the day it opens. Of those that opened in this sector (Accommodation and food services) in 2019, 57.4% were still open five years later, so 42.6% were gone. That does not make the payback number wrong, it makes it narrower than it looks: IF you are still open, this is when the money comes back. It does not price the branch where you are not. - AND WHILE WE ARE HERE: '90% of restaurants fail in the first year' IS NOT TRUE, and BLS has quietly said so for a decade.
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It is the most repeated statistic in the startup world and nobody checks it. Of new accommodation-and-food-service establishments, 82.6% are still open after one year and 57.4% after five, which is BETTER than the 51.5% all-private average. We checked it was not a pandemic artifact before printing it: food service beats the all-private average in every opening cohort back to 2010. The trope is wrong about CLOSURE. It is roughly right about the difficulty, which is a different thing: food service also has the thinnest margins of anything we cover, so you can survive five years and still never pay yourself properly. Surviving is not succeeding. - THE "AVERAGE" FOR THIS INDUSTRY IS A MEAN, AND A MEAN IS NOT A TYPICAL BUSINESS.
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The Economic Census also publishes receipts by firm SIZE, and nobody here had ever pulled it. Firms with under five employees, which is the band you would actually be starting in, average $36,859 a month. The all-establishments mean is $133,555: it overstates the small operator by 3.62x. Firms with 500 or more employees take 22% of this industry's receipts, and that is what lifts it. About 57% of establishments sit in size bands whose own average is below that mean. We used to pre-fill YOUR expected revenue with the mean, which drove the profit and payback lines, and it is the worst mistake this site has made. - Census (2022): the average full-service restaurant with employees took in about $122,214 a month, while a solo operator with no employees averaged about $5,385 a month.
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Those are the figures as published for 2022; this calculator carries them forward to 2025 dollars using the GDP price deflator. - IRS (2023): sole proprietors in restaurants and drinking places reported net income of about 3.4 percent of receipts, though that is the owner's own take before paying themselves any wage.
- Recouping the buildout often takes years, and a large share of restaurants close before they get there.
Margin used in this calculator: 3% to 7%. That band is our own estimate, not a published statistic. Public data does not report net profit margin for staffed businesses, so treat the payback figure as a projection, not a promise.
Where every number above comes from
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US Census
U.S. Census Bureau, 2022 Economic Census
census.gov -
US Census
U.S. Census Bureau, 2022 Nonemployer Statistics
census.gov -
IRS
IRS SOI, Sole Proprietorship Returns (TY2023)
irs.gov
What this assumes, and where it could be wrong
Every one of these is a place the number could be off. They are here because you should be able to check our working, not because we are hedging.
YOU PAY RENT THROUGH PLAN REVIEW, LONG BEFORE YOU SERVE A PLATE.
YOU HIRE AND TRAIN A FULL CREW BEFORE A SINGLE PAYING GUEST.
WHAT HERE IS A FEDERAL FIGURE, AND WHAT IS OUR MODEL.
The kitchen buildout is the line that separates a $150k quick-service spot from a $500k full-service room. A vented hood, fire suppression, grease trap, and gas lines add up fast.
A liquor license is not in the base number because it varies wildly.
Restaurants run at a loss before the room fills up. The working-capital cushion, not the equipment, is what most closures run out of.
Taking over a former restaurant with a usable kitchen is the cheapest way in, because you inherit the most expensive buildout.