Costs of Starting a Commercial Kitchen

Business Planning & Feasibility Analysis

Flavours and aromas aside, running a restaurant or commercial kitchen is all about numbers. Profits matter, but so do costs. Stay ahead by balancing both! 

Startup costs are a particular source of curiosity and concern for soon-to-be restaurant owners. After all, these costs determine what you can afford and realistically accomplish when starting your business. 

Examples of Restaurant Startup Costs

The cost of opening a restaurant depends on location, size, equipment, and style. Here are some general ranges for certain categories:

• Small-scale kitchen: $15,000 to $100,000 
• Medium to large-scale kitchen: $100,000 to $250,000 
• Full Restaurant (40 seats): $300,000+

These costs are variable, but fairly consistent. Here’s a more detailed look at what these expenses may entail: 

• Construction Fees/Capital Improvements: $125 per sq. ft. ($125,000 for 1,000 sq. ft.)
• Kitchen Equipment: $10,000 to $50,000
• Furniture and Decor: $50,000
• Kitchenware and Supplies: $18,750
• Licenses and Permits: $500 to $12,500 
• Rent and Utilities: $1,000 to $6,000/month
• Insurance: $625 to $2,000
• Initial Food Inventory: $1,000 to $12,500
• POS System & Technology: $200 to $4,000
• Marketing and Website: $500 to $10,000
• Staffing Costs: $2,000 to $10,000/month
• Miscellaneous Expenses: $500 to $2,500

These costs can differ depending on the business model of your kitchen. 

Examples of Costs Based on Different Business Models

• Cloud Kitchen—Costs could range from $16,000 to $78,000, which is lower due to the lack of dine-in space. 
• Catering Business—A cost range of $15,000 to $100,000 is possible for catering businesses, which rivals small kitchens. Additional expenses for caterers include transportation and packaging material costs. 

Again, none of these costs are set in stone. They could be lower or higher, especially if you have a unique setup or concept attached to your restaurant. Also, if you’re looking to secure a location in an urban setting (i.e., downtown Toronto, Vancouver, or Montreal), you can expect to spend considerably more than if you opened a spot in a more suburban or rural area, so keep that in mind too.