Building a Pizzeria/Restaurant from Scratch

[Chicago Pizza]

Hey everyone, glad to join the forum!  I am in the process of signing a lease in a 4,500 square foot building to build a pizzeria and restaurant from scratch!  It's alittle scary to say the least, all I am getting is what they like to call a "vanilla box", which means four walls.  I have been rounding out the numbers to see what I'd financially need, to get started. Everyone says "whatever you think you need, you always need more", and "when you think you got everything accounted for, you wind up missing 20 things".  If anyone has started one from scratch, or in general knows what I am missing, or some figures, I would greatly appreciate it. 

This is what I gathered so far....
Architect - $5,000
Lawyer - $15,000
Securit Deposit - $24,000
Equipment - $110,000
Security / Audio / Phones - $20,000
Computer System - $15,000
Construction - $100,000
Tile - $40,000
Business Cards / Menus / Flyers - $5,000
Advertising - $10,000
Food Supplies - $10,000
Electrician - ?
Plumbing (We have one bathroom given to us but going to build two more bathrooms, and all the gas lines we need done) - ?

So far we are up to $353,000

Anything else I am forgetting?

Thanks all for the help I greatly appreciate it

[shango]

What about smallwares (plates etc..) and disposables (boxes, napkins, etc..)?  Wine/beer?

Permits?

tables and chairs can be quite expensive.

Architect seems low, very low, but I guess it depends on who, and where..

[Buffalo]

Wages...

Insurance...Building, autos, workers comp, etc, etc, etc

Buffalo

[Mo]

Hey Chicago:

Architect is way too low for 4,500 sf. Budget $15,000-20,000 and make them earn every penny.

Attorney is very high. (figure closer to $2000, unless he/she is doing something other than setting up the company, filing with state/feds. etc)

Construction Costs are Way Too Low for 4500 sf (unless you are a contractor and doing all the work yourself) I would at least double that figure to include all the subs, etc (plumbers, electricians, hvac, concrete, etc)

What kind of security/audio/phone system do you plan on having for $20,000? That would be one hell of a sound system for a restaurant. I think that number can come down to $2,000 easy. Security set-up is $500 (plus monthly service of course), phones are a $100 from staples and having an electrician run the audio shouldn't cost more than $1,000.

$10/sf for tile is not great but not terrible either but I would move all the construction numbers into one category (and then break them out individually) a good architect can advise you on all of the things that would fall under the build-out.

What kind of equipment are you getting for $110,000? That's a big number so I am curious what all this includes. Try to buy used when you can. So much stuff can be had for a good price that's less than a couple years old. Sad to say but restaurants are going under all the time with brand new equipment in them...

Again, $15,000 for a computer? Is that a POS/register system? Back office computer is $1,000. POS can be had for well under $10,000.

That's a whopper of a security deposit. I would definately try to negotiate that down. Also, have landlord forgive rent for the duration of the build-out, say three months. This is pretty standard practice and will save you a few bucks.

Business cards are $20 at Kinkos. Flyers are cheap. You can do 5000 menus for $600.

Your advertising number is good if you spend it the right way. Negotiate the hell out of the newspapers if you are considering running ads. They will take just about anything now.

Somebody was talking about insurance, wages, etc but those are more operating costs rather than start-up costs. Be as detailed as you can. Think through everything about a billion times. Then do it again.

Good luck and do your homework. It is very easy to spend ungodly amounts of money on this stuff.

Mo.

[jjerrier2450]

Yikes...$350K seems way low.  In Dallas it is about $150-200/sf to go from cold dark shell to lights on ready to roll.  Biggest expenses will be plumbing (gas lines, plumbing lines, sinks, drains = lots of concrete cutting), HVAC, vent-a-hood, grease trap (especially if you have to bury it below grade...).  I would guess about $65K for architect, plans, permits, interior design, etc.

It may be much cheaper where you live...

[sweetlew]

Try not to waste precious start-up $ on advertising.  Use social media (Facebook, Twitter, myspace). I also use a mass e-mail service called, "Sudden Values".  It's roughly $1800 yr for two restaurants.  Also, get at least two estimates on commercial insurance.  ALWAYS re-bid your commercial insurance every two years.  It will keep your agency on its toes!  It can also save you thousands ($5 to $10K) a year!  If you don't believe me, TRY IT.  IT WORKS! 

Advertising can be a colossal waste of money.  Great food is the best form of advertising!  Keep your food simple and fresh.  Carve out your own niche.  Good luck...

PS.  This may sound trite, but if you want to make a small fortune in the restaurant business, start with a large one!

[Fourlix]

Must be nice to have that much cash sitting around....
Reality check...
I am building a new restaurant in a building I already own. No mortgage. I had a motorsport dealership which was a casualty of this economy. Expensive toys are very hard to sell these days. SO, out go the bikes, and in comes the kitchen equipment, tables and chairs and new decor.  It ticks me off the city made me get a building permit, but the electrical additions were pretty extensive, and we had to put in a fire wall.  I bought everything on ebay. We will seat 99 people without a sprinkler system.  This is a BBQ and Wood Fired Pizza Restaurant, we are also doing fresh pasta and GYROS.  This is all food that is not available in this area other than Pizza Hut, Dominos and Papa Johns,  none have liquor licenses or serve beer. I have a restaurant beer and wine license and will be serving 10 beers on tap. The kitchen is divided into an exhibition kitchen with the Emiliomitti 505 ($2,500 on ebay), the GYRO machine and the Freidrich smoker BBQ($14K MSRP, $2500 on ebay)  The back kitchen has everything else including a 12' hood with ansul system.  Walk in cooler, ice machine, 100 nice chairs from a restaurant in Hermosa beach, $20/each, made my own tables for about $15 each, Bought a beautiful antique front bar for $1,500 and will build the back bar myself. Here's a pic of one I built for our saloon.  Yes, I am handy.
I had to hire a contractor, so I found one that would let me do my own work. The electrician had to be legit, and my plumber friend is also legit. 
billythekid bbq.com
Billy's BBQ and Wood Fired Pizza
Total cost?   about $40k  It can be done........

[Fourlix]

Here's that bar I built...

[scott123]

Total cost?   about $40k  It can be done........

Really? $40K.  How much was the alcohol license? Here in NJ, an alcohol license can run you more than a million dollars.  And that's if you want to spend a lifetime waiting for one to become available AND know the right people.

[Fourlix]

A beer and wine restaurant license is only $1,000 a year and about $400 in initial application fees.  A full liquor license is very expensive, about $300K.  With the restaurant license, at least 60% of revenues must come from food.

I need to explain that this is a small town, about 25,000 people, with about 40 restaurants. Most of them are pretty bad. This is the southwest, New Mexico, cost of living is pretty cheap, and the cost of getting things done is also a lot less than more "civilized" parts of the country. I built my building, metal with a really cool rock facade, lots of custom features for $18 per square foot seven years ago. It took me 5 months start to finish. I realize that is not possible most places.

But when I see someone starting a new business and the 4th thing on their list is "order new equipment" it does make me shudder.   There is a ton of great used equipment out there, and ebay is a great place to shop. Even if you don't find it there, it will usually lead you to it, and give you a real world idea of what you should pay for it. Craig's list works too.

There are lots of Mexican restaurants here, and only of few of them are any good.  There are lots of fast food joints, McDonalds etc and Pizza Hut, Papa John's and Dominos.  There are no Chili's or Outback's or even an Applebees.  The town people have been screaming for one of these casual dining chains but the economic reality is that the town can not justify the expense of putting one in.  My answer is to create my own equivalent of one of these chains but at my price level. I have a great location in the biggest shopping center in town, with lots of parking. We are tying to the Billy the Kid legacy, which has been totally ignored here, even though this was Billy's home town, before he acquired a taste for pistols and other people's horses.

[GotRocks]

But when I see someone starting a new business and the 4th thing on their list is "order new equipment" it does make me shudder.   There is a ton of great used equipment out there, and ebay is a great place to shop. Even if you don't find it there, it will usually lead you to it, and give you a real world idea of what you should pay for it. Craig's list works too.

I agree, but sometimes the good used stuff is just not available. For instance, The oven I have decided on after months of research, including speaking with people around the country that use the model that I want, along with different ovens, it is just not available at a discounted or used status.

Then lets look at other equipment, coolers, freezers, ranges fryers and all that can be had almost anywhere in excellent used condition, But things like a commercial BBQ pit  is tough to find for any substantial discount under the cost of new if it is from one of the top-3 manufacturers (O-H, S-P, & J&R)

It probably doesn't help that I live in the middle of nowhere either. the nearest used restaurant equipment house is 2 hours away. I am in the boonies with snow up to my butt for 6 months of the year, and our tourist season is primarily in the summer months.

I wish you success in this difficult industry