 Hey guys, my name is Wilson, this week we're going to be talking about how much does it cost to start up your restaurant. This has been a question that I get on a daily basis. Can I start my restaurant with $10,000? Can I start with $50,000? Can I start with $100,000? We're going to be answering it right now. Now before we actually go into it, if you haven't yet had a chance, definitely watch this video. The four types of restaurant concepts that there are because it definitely varies between a bubble tea shop from an ice cream to a fine dining experience to a casual dining experience. All these come into play when deciding how much does it really cost when you're starting up a restaurant. So now that I've shared that with you, make sure you guys stay until the end because I'm going to be sharing with you five money saving tips for your restaurant when you're building out. And then I'm going to be sharing with you some resources in the link below as well. So now let's dive right in. Now I know that you like knowing the numbers. I know that you like people giving you the straight answer, which is the reason why I'm giving you the straight answer right now. For you to be able to open up a low-end restaurant, we're talking about from $100,000 to $175,000. Something that is in the median end, we're talking about $175,000 to $225,000. And something that is on a higher scale goes from anywhere from $750,000 to over a million dollars. This is the answer that you're looking for because you want exact numbers and that's why I'm giving it to you. But this is not realistic because there are so many different variables that come into play, which is the reason why I'm going to explain a little bit further about why and how these numbers come about and the things to consider when thinking about how much does it cost to set up your restaurant. Now as I dive in a little bit further, another way of presenting the numbers and how much it costs is by the square footage. And what I mean by that is you can calculate based upon the footage that you have anywhere from $100 to $800 per square foot to have your restaurant up and running. Okay. And what that includes would be including the renovation, the rent, the build-out costs, the equipment, everything is included. That gives you a median of $450 per square foot. Now once again, this includes a lot of different things and we're jamming everything into it. So that's the reason why I'm going to dive in a little bit further for you. So you may be wondering, my location is only 500 square feet. How much do I need to pay? Do I still need to pay $100,000 or my place is 2000 square feet? How much do I need to pay? Is it going to be $300,000 to give you a better answer? On average, it costs around $100 to $800 per square foot to be able to forecast how much you're going to spend setting up your restaurant. And that would include anywhere from renovations to equipment to your build-out costs to the decor. All those would be included when it comes down to averaging. How much does it cost for your space? So for example, if you have a 500 square foot place and you're having a lower end of the equipment and lower end of the renovations and you don't need to have build-out costs, then the cost per square foot may go down to, let's say, $200 and that you can actually build up a 500 square foot place for only $100,000 for the same location in the same size. If you're going a little bit more higher end, if you need more equipment, if you need more decor, then the prices would go up to, let's say, $500 per square foot or $800 per square foot, depending all on the equipment that you buy and also all the furniture that you buy. And that's the reason why there are so many different variables that come into play and I'm giving you a range depending on your needs. So once again, it varies from $100 to $800 per square foot. So depending on your needs, you can actually kind of project how much would it cost and project the whole set of costs for your F&B. Now that you know the generalized number of how much it costs to set up a restaurant, I'm going to be diving into the five big variables where you can consider and that really comes into play of how much does it cost to set up your restaurant and the number one variable is your location. When we're talking about your location, there are different ways of setting up your location. First of all, you can actually buy out or actually rent a place that is completely empty and you can build it from scratch. We're talking about building the washroom. We're talking about the building, the piping, the grease traps and including including all the hooded vents and redoing all the HVAC and everything. And that itself is going to be much higher in terms of the budget. Now a little bit lower than that, you can consider buying an existing F&B place and you can just convert that and do some renovations, minor renovations to be able to get your shop up and running. And that itself, you're going to save on the buildup costs. You're going to save money in building up your washroom and then you're going to save building up all the different equipment, so on and so forth. And lastly, you can actually consider buying out and let's say a place that is not operating a food and beverage, but has all the different components already. For example, let's say a massage place. They have all the piping, they have the office place ready. Then you can just take off some of the walls and include your piping. So at the end of the day, we're going to be talking about the variable that is really determining the factor of how much you're going to be able to spend. The second money saving tip for you and another variable that you should really consider, one of the biggest costs is equipment. When it comes down to equipment, everyone want new stuff. And when you want new equipment, it comes at a big price tag. And which is the reason why I said that prices range from $100 per square foot to $800 per square foot, depending on this variable as well, which is equipment. You can actually choose in buying out new equipment or you can actually lease it. So then that way you're only paying a monthly rental fee and that would help you with your cash flow. You don't need to pay the whole thing up front. You're going to be paying interest if you lease it out. But on the other hand, you're going to save on your cash flow. Another alternative to save on money when it comes to equipment is to go into second hand shops. A lot of FMV places go out of business, which is the reason why it goes their equipment goes up for auction a lot of times. And a lot of times when you go to the auction places, these second hand places, you're going to be able to get them for a lot cheaper than the actual original new cost. For example, with our ice cream shop, initially when we first started, we thought we'd need to buy all new equipment. So we spent $30,000 buying a brand new Taylor soft serve machine. And we bought two of those. That's $60,000 that we spent buying a machine. Within three months, we realized that these machines are not what we wanted because they do not produce enough ice cream in the timeframe that we need, which is the reason why we started looking into what are some of the money saving tips. And that's when we found out that, hey, you know what? We can actually buy a second hand equipment, which is equally as good. We bought a second hand equipment that produces more and better ice cream for only $10,000. And we got this machine from an auction, auction place. And I'm like, wow, that's amazing. Now I'm sharing this goodie with you to be able to save you some money when opening up your food and beverage shop. The third variable to consider when opening up your shop that would save you tons of money and that can vary from here to here is the opening inventory. And what I mean by that is when you open your shop, you're going to have to buy a lot of ingredients, whether it be soft serve and tons of different powder and tons of different milk. Or if it's a restaurant, you're going to buy tons of meat and tons of pasta, tons of sauces. And at the end of the day, you need to be able to budget accordingly because a lot of inventory has shelf life. And when you do not manage these ingredients properly, then you're going to be able to spend a lot of money just on food costs that goes to waste. So when you're opening up your shop, budget accordingly, make sure that if you're ordering something in bulk, get them to deliver it multiple times a week, right? So then that way you can make sure that your food is always fresh. And on top of that, it actually decreases the amount of spoilage and your cost for your shop. For example, because our ice cream shop was so busy all the time during the summertime, we continued to order 50, 60 jugs of milk every single week. And before we know it, we were in winter season. And when winter season hit, our sales went down dramatically. And in turn, we actually wasted 20 jugs of milk because we were not producing enough volume. And that itself is a lot of money when it comes to spoilage. And for us, we need to make sure that we always consider the different trends and how people are shopping and how people are consuming our goods. And we should always just buy in small quantities and get it delivered as a needing basis, okay? So in that way, we can decrease the amount of spoilage, which brings in a lot more money in your pocket. The fourth type of variable when it comes to opening up your restaurant is the contingency fund. A lot of people do not account for this. This is actually a must have when it comes down to it. Although you're going to see a bigger spend and a bigger budget that you need. This is something that is crucial to your success. And why I say that is because for any food and beverage shop to take traction, to actually make traction, you need to be able to bring your food out there in the world. And it takes time for people to talk about your place. It takes time for people to know how great your place is. And usually it takes a couple months to pick up. If you do not have enough funding to last that six months period until you gain that traction, you're going to be able to go out of business. You're going to compromise on your food offering and the quality would go down. And in turn, it goes into a backwards spiral into something that is no good. And it qualifies, compromises everything that you have been building your shop to stand for. Which is the reason why having contingency fund for your food and beverage restaurant is super important. Please, please, please do not oversee this line item when it comes to your budgeting. And the last variable to consider when opening up your shop is professional fees. Anywhere from franchise fee that we're talking about that ranges from 30K to 50K, to accounting fees, to your architect, to your lawyer fee, to your consultant. All these type of fees add up. It could go up to like tens of thousands of dollars. And if you do not account for these little costs, which adds up, then you can easily run into the reds. You can easily be in a situation where you don't want to be. Once again, contrary to the first three variables, which you can actually account for and actually save money for, these are the different things that you should definitely always consider and always account for when coming to your budget and when you're budgeting. How are you going to set up your food and beverage shop? For us, when we first started our ice cream shop, we didn't account for paying for a consultation. We didn't account for the lawyer fees when we're setting up our franchise. And that itself costs us more than $40,000. And in turn, it is because only because we were lucky and only because we were able to generate a lot of buzz from the beginning that we were able to afford all these professional fees. Otherwise, I can tell you we wouldn't be in business today. So make sure that when you're accounting and budgeting of setting up your shop, always account for professional fees. Doesn't matter how little they are because they always add up. So there you go. How much does it cost to set up your FMV shop? Hopefully by now you understand that there is no straight answer that I can give you in terms of how much does it cost to set up your FMV shop? Because once again, there are so many different variables that come into play. I tried my best to give you a ballpark range initially. Then we came into how big your size to project, how much does it cost to build your FMV? And then we talked about the five different variables where you can actually save money on and actually account for your budgeting. Then that way you're going to be in the best shape to budget for your food and beverage shop. Hopefully this has helped you in giving you some insight into how to prepare for your opening. If you want to learn a little bit more, I've actually written down from step one to the end step to a thriving shop all in the link below. So go in the link below. These are basically stuff that I've learned for the past five years from actually selecting a winning menu to choosing the perfect location to actually finding out what our customers like to actually finding the perfect location. All these things all in the link below. So make sure that if you guys want to learn more about how to build a thriving food and beverage shop, check it out in the link below. If you guys like this video, make sure that you give me a thumbs up. Otherwise, if you have any questions, leave in the comment section below and I'll make sure to answer it for you. Otherwise, subscribe along the journey. I'll see you guys next week.