The Expenses of Building a New Restaurant

There are plenty of expenses that come with building a new restaurant and an entrepreneur must prepare themselves. The food industry is a lucrative and ever-growing business. With the right concept, a new restaurant can quickly become a hot spot in town. However, starting a new restaurant is not cheap. Many expenses involve building and opening a new restaurant, including rent, construction costs, equipment, furnishings, etc.

Building a New Restaurant: Things to Consider

Here are the expenses your clients should consider when building a restaurant:

To Rent or To Buy?

First and foremost, deciding whether to rent or buy space is a significant decision when opening a new restaurant. Budgets and long-term strategies will be heavily affected by this decision.

Renting might be the best option if they only plan to be in business for a few years. It’s cheaper upfront, and they won’t have to worry about property taxes or maintenance costs. On the other hand, if they plan on owning the restaurant for a long time, then buying the space will save them money in the long run. 

Location, Location, Location

The location of the restaurant is another factor to consider. If they’re in a highly visible location with high foot traffic, their build-out costs will be higher. The reason is simple: Your clients must account for the extra wear-and-tear on the materials and finishes. In addition, they’ll likely face higher construction costs if they are in an urban area due to the difficulty of working in a densely populated place. 

Costs would also depend on the popularity of the area. Restaurants will face more competition for customers if the site has an abundance of restaurants. Depending on their new restaurant’s position in the area, they may need to invest more in marketing and advertising.

The Upfront Cost of Equipment and Materials

It can be expensive to purchase all kitchen and dining room equipment. Buying materials to build the space from scratch will also be necessary. These materials are drywall, paint, flooring, and other construction materials. These upfront costs should be factored into their budget to keep it in line.

Your clients may also benefit from commercial package insurance, which can help protect their investments. It might add to their upfront costs, but it will give them long-term financial security.

Commercial package insurance can protect businesses from various risks, including property damage, liability, and business interruption. This type of insurance can help cover the cost of repairs or replacement if your client’s business suffers damages due to fire, weather, theft, or other covered events. It can also help them pay for medical expenses if someone is injured on their property or for lost income if the business needs to close due to a covered event.

Take Note of Recurring Bills: Utilities

Aside from the upfront costs of building a restaurant, they will have to account for the monthly recurring bills. Utilities, in particular, such as water, gas, and electricity, affect their expenses. The amount they pay for utilities will largely depend on the size of the restaurant space and how much equipment they need to run it effectively.


Knowing what to expect when opening a new restaurant can help your clients manage their budgets and plan for success. As their insurance agent, the best tool you can provide is commercial package insurance, which can help in protecting them from some of the common risks they face while delivering some essential coverages they may not have thought about.

About Snyder Specialty

Snyder Specialty, LLC is a New York-based underwriting facility that provides a range of property and liability solutions for personal and commercial lines. Specializing in coastal properties and hard-to-place risks, Snyder Specialty expands your current capabilities with proven solutions for complex risks. Find out more about the company’s range of services by calling (718) 362-8039.