How should I budget for the initial stock of food and supplies when opening my restaurant?

This article was written by our expert who is surveying the industry and constantly updating business plan for a restaurant.

Our business plan for a restaurant will help you succeed in your project.

How can I smartly budget for the first stock of food and supplies without overspending when starting my restaurant?

How much should I set aside for my first food inventory?

What part of my budget should I use for kitchen equipment and supplies?

How do I figure out the cost of perishables for the first month?

What's a good budget for non-perishable supplies?

How should I plan for staff uniforms and linens?

How much should I spend on marketing and promotions at the start?

How much should I keep for unexpected expenses in the first few months?

What food cost percentage should I aim for at the beginning?

How do I decide the initial stock levels for each menu item?

What's a good budget for training and developing my staff initially?

How should I plan for technology and software expenses at the start?

What are the typical initial utility costs for a restaurant?

These are questions we frequently receive from entrepreneurs who have downloaded the business plan for a restaurant. We’re addressing them all here in this article. If anything isn’t clear or detailed enough, please don’t hesitate to reach out.

The Right Formula to Budget for the Initial Stock of Food and Supplies When Opening Your Restaurant

• 1. Conduct market research and analyze the restaurant industry:

  Research the local restaurant market to understand customer preferences, popular dishes, and dining trends. Study the demand for different types of cuisine and examine local regulations and required licenses for operating a restaurant.

• 2. Gather data specific to your restaurant:

  Collect data on opening costs, such as the initial purchase of food stock, kitchen equipment, and dining supplies. Identify competitors, potential suppliers, and partners, and understand your target clientele's preferences.

• 3. Estimate the number of servings needed for the first month:

  Determine the expected number of customers per day and the number of operating days in the first month. Calculate the total number of servings required by multiplying these figures.

• 4. Calculate the cost of food supplies:

  Estimate the average cost of raw ingredients per dish based on your menu. Multiply the total number of servings by the average cost per dish to determine the initial cost of food supplies.

• 5. Estimate non-food supply costs:

  Consider the cost of non-food supplies such as cleaning products, napkins, and utensils. Estimate these costs as a percentage of your food budget.

• 6. Include a buffer for unexpected expenses:

  Add a buffer to your budget to account for unforeseen expenses or price fluctuations. This buffer should be a percentage of your total food and non-food supply costs.

• 7. Calculate the total budget for initial stock:

  Sum the costs of food supplies, non-food supplies, and the buffer to determine the total budget for the initial stock of food and supplies.

An Example for Better Understanding

Replace the bold numbers with your own information to see a personalized result.

To help you better understand, let’s take a fictional example. Imagine you are opening a **50-seat restaurant** that will serve an average of **100 customers per day**. You plan to offer a menu with **10 different dishes**, and based on market research, you estimate that each dish will require an average of **$5 in raw ingredients**.

To calculate the initial stock of food, you should first determine the number of servings needed for the first month. Assuming you operate **30 days a month**, you will need **3,000 servings** (**100 customers x 30 days**). Multiply the number of servings by the average cost per dish: **3,000 servings x $5 = $15,000**. This amount represents the initial cost of food supplies.

Next, consider non-food supplies such as cleaning products, napkins, and utensils. Estimate these costs at **10% of your food budget**, which would be **$1,500** (**$15,000 x 0.10**). Additionally, factor in a **10% buffer** for unexpected expenses or price fluctuations, adding another **$1,650** (**$16,500 x 0.10**) to your budget.

Therefore, the total budget for the initial stock of food and supplies should be **$18,150**. This comprehensive approach ensures you have adequate resources to meet customer demand while accounting for unforeseen costs, setting a solid foundation for your restaurant's opening month.

With our financial plan for a restaurant, you will get all the figures and statistics related to this industry.

Frequently Asked Questions

How much should I allocate for my initial food inventory?

When opening a restaurant, it's advisable to allocate between 25% and 35% of your total startup budget for initial food inventory.

This percentage ensures you have enough variety and quantity to meet customer demand without overstocking.

Adjust this figure based on your menu complexity and expected customer volume.

What percentage of my budget should go towards kitchen equipment and supplies?

Typically, you should allocate around 10% to 15% of your total startup budget for kitchen equipment and supplies.

This includes essential items like ovens, refrigerators, and small wares necessary for daily operations.

Consider leasing options for high-cost equipment to manage initial expenses better.

How can I estimate the cost of perishables for the first month?

Estimate the cost of perishables by calculating approximately 5% to 10% of your projected monthly sales.

This approach helps in maintaining a balance between having enough stock and minimizing waste.

Regularly review sales data to adjust your purchasing strategy accordingly.

What is a reasonable budget for non-perishable supplies?

For non-perishable supplies, allocate about 5% of your total startup budget to ensure you have a sufficient stockpile.

These items include canned goods, dry ingredients, and cleaning supplies that have a longer shelf life.

Buying in bulk can often lead to cost savings, but be mindful of storage space.

How should I budget for initial staff uniforms and linens?

Set aside approximately 2% to 3% of your total startup budget for staff uniforms and linens.

This includes aprons, chef coats, tablecloths, and napkins, which are essential for maintaining a professional appearance.

Consider a rental service for linens to reduce upfront costs and simplify maintenance.

What is the recommended budget for initial marketing and promotions?

Allocate around 3% to 5% of your total startup budget for initial marketing and promotions to attract customers.

This can include social media campaigns, local advertising, and launch events to create buzz around your restaurant.

Effective marketing can significantly impact your initial customer turnout and long-term success.

How much should I reserve for unexpected expenses in the first few months?

It's prudent to reserve about 10% of your total startup budget for unexpected expenses that may arise.

These can include equipment repairs, additional staffing needs, or unforeseen regulatory costs.

Having a contingency fund helps ensure smooth operations during the critical early months.

What is the ideal food cost percentage to aim for initially?

Aim for a food cost percentage of between 28% and 35% of your total sales to maintain profitability.

This figure helps balance quality and cost-effectiveness in your menu offerings.

Regularly analyze food cost reports to identify areas for improvement and cost-saving opportunities.

How can I determine the initial stock levels for each menu item?

Determine initial stock levels by analyzing your menu and estimating the expected sales volume for each item.

Consider factors such as ingredient shelf life, supplier lead times, and storage capacity.

Adjust stock levels based on actual sales data and customer feedback after opening.

What is the recommended budget for initial training and staff development?

Allocate around 2% to 4% of your total startup budget for initial training and staff development.

Investing in training ensures your team is well-prepared to deliver excellent service and maintain operational standards.

Consider ongoing training programs to keep staff skills up-to-date and improve retention.

How should I budget for initial technology and software needs?

Set aside approximately 3% to 5% of your total startup budget for technology and software needs.

This includes point-of-sale systems, reservation software, and inventory management tools essential for efficient operations.

Evaluate different options to find solutions that fit your restaurant's specific needs and budget.

What is the typical range for initial utility costs in a restaurant?

Initial utility costs for a restaurant can range from $1,000 to $3,000 per month, depending on size and location.

These costs include electricity, water, gas, and waste disposal necessary for daily operations.

Implement energy-saving practices to help reduce these expenses over time.