How much does it cost to open a restaurant in Australia?
Opening a restaurant is a huge commitment requiring expertise in managing staff, stock, food quality, customer experience and overheads. Here's a few insights into the costs of running a high-end restaurant.
Restaurant startup and running costs
Exactly how much does it cost to start a restaurant? There's no exact answer to this, as startup costs will differ depending on the scale, location and market. These costs include:
- Purchase or lease of a commercial property,
- Plant and equipment acquisition,
- Food and beverages
Research from Restaurant Startup and Growth magazine suggests that the average restaurant owner spends around AU$650,000 establishing a restaurant.
Likewise, day-to-day running costs will depend on the unique expenses of the business. The single largest expense for most Australian restaurants is staff remuneration, according to the Restaurant and Catering Association. Industry benchmarks from the association indicate that on average 44.2 per cent of costs are labour, followed by 31.2 per cent and 30.6 per cent for food and beverage products sold respectively.
The hidden costs of Australian restaurants
It's not just food and wages that can contribute to the price of dining at high-end restaurants, an investigation by The Good Food Guide revealed.
Aria, the Sydney flagship of Australian celebrity chef Matt Moran, reportedly spends around $20,000 a year replacing broken wine glasses, while the annual table linen laundry bill can reach as high as $280,000.
Tableware is a massive expense for many high-end restaurants as well. Moran's Bangaroo House boasts tableware worth approximately $100,000. Meanwhile, when Chin Chin opened in Sydney last year, $54,000 worth of crockery was ready to grace its tables. Across the Sydney and Melbourne branches of Chin Chin, The Lucas Group spend around $45,000 to replace stolen or lost bespoke cutlery.
How can businesses survive with such high expenses?
Handling huge costs requires a particularly high level of management talent that can only be learned in formal education.
Managing expenses, identifying investors and maximising profits are key to any business but the stakes are especially high in the competitive world of hospitality. To gain the skills needed to confidently operate a restaurant in Australia or abroad, you must apply to Le Cordon Bleu's Bachelor of Business (International Restaurant Management). Over the three-year programme, you'll learn to critically analyse business strategies and manage costs, staff, compliance and more.
If you're ready to discover how Le Cordon Bleu can teach you the skills to open your own restaurant, get in touch today.