6 Hidden Costs of Opening a New Restaurant That You Probably Didn’t Know

expenses opening restaurant

When you are penning the details of opening a restaurant there are always certain costs that skip your mind. It doesn’t happen as much if you are a seasoned restaurateur or already have experience managing a restaurant for someone else.  

However, for people with no experience, success often depends on getting the expenses right. Not ballpark figures, no approximations, but exact estimates. Usual costs of opening a restaurant, such as rent, employee salaries, buying/renting furniture, and maintaining an inventory of ingredients are fairly obviously.  

This post is about those not-so-obvious expenses that creep up on you when you least expect it. Here are 6 hidden expenses you probably didn’t know about opening or running a restaurant.

Restaurant Insurance Cost 

Restaurant insurance is a term used to describe a bundle of insurance policies that are relevant to a restaurant. This mainly includes property insurance and liability insurance. Property insurance covers damages that occur to the property or any equipment or assets in the business location. Liability insurance protects you against customer lawsuits or to cover the cost of injuries that may have occurred in your premises. Restaurant insurance cost can be anything from $25 per month to hundreds of dollars depending on the size of your restaurant and how many people you serve. 

Scavenging Materials for Decor

While you probably have a contractor assigned to design and build your restaurant’s interiors, but what about the little things. Picture frames, posters, wall hangings, clocks, and all the small items that give your space a homely feel. Everything from flowers at the table to the fancy tablecloths. Even if you are scavenging these decor items you will probably end up paying way more than expected. 

Hiring a Restaurant Marketing Expert

If you are starting off, a significant portion of your monthly budget should be dedicated to promoting your restaurant. A qualified marketing expert starts from scratch, right from creating a theme-appropriate website to spreading the word on social media channels. Marketing experts also help you design your print marketing materials and manage your offline marketing campaigns. Restaurant marketing teams also ensure your restaurant get listed on all the local food apps to boost home delivery sales. All of this knowledge and expertise do not come cheap. 

Cost of Licenses, Certificates, and Permits

Restaurants need many licenses and permits to operate in the United States. The number of licenses can increase depending on what you are offering. For example, if you serve alcohol, then you need a liquor license. Almost all restaurants need fire certificates and should always be ready for inspection. Restaurants that play music, also need music license or they run the risk of getting sued by record producers. Restaurants also need Food Handler’s permit along with a regular good old-fashioned business license. Getting all these licenses and permits require both direct and indirect costs. Direct cost is the cost of the licenses and permits themselves and the cost of renewing them. Indirect cost is the stuff you need to buy in order to get the license. This may require buying a larger fridge to store all ingredients at the right temperature or buying chef’s hat for everyone in the kitchen. The specifics really boil down to the guidelines of each permit and licenses.  

Credit Card Processing Charge

Have you ever wondered why Visa and Mastercard generously allow you to pay for stuff without ever charging you a dime? Well, that’s because the businesses that are accepting the payment agree on paying a processing charge every time you swipe a card. Now, that you own a restaurant, you are that business owner. That means you would need to pay a processing charge every time a customer pays using credit card. 

For restaurants operating in the USA, the processing fee is around 1.8 to as high as 2.5 percent of the total bill. That may not seem much but that’s definitely something you should consider when pricing the dishes. 

Food Waste Cost

One of the trickiest parts of restaurant management is reducing food waste. The cost of food waste can be huge if you miscalculate your restaurant’s requirements. Many fresh ingredients need to be bought on a daily basis, which means wastage occurs on a regular basis too. The ones that hurt the most is the pre-consumer food wastage. This is the food or ingredients that get spoiled or thrown away before they end up being served to customers. While seasoned restaurant managers know how to reduce food waste, eliminating it completely is almost impossible. The only thing you can do is calculate the cost of wastage and figure out a way to donate the food before they spoil.

What Does It Take to Obtain a Loan When You Need One

Loan qualifications

Lenders of all types set qualifications that applicants must meet in order to be considered for loans. The good news is that some lenders are willing to work with people who have experienced a few financial setbacks in the past. If you fall into that category, don’t assume there are no Alberta loans that you can receive. As you begin the search, remember that lenders who place less emphasis on credit scores will still need certain types of information. Have the following ready before you prepare an application.

Verifiable Sources of Income

No lender is likely to approve an application unless you can provide confirmation that you have one or more sources of steady income. While many people think that means money earned from a job or from being self-employed, those are not the only sources that lenders accept. Most provide lists of what sort of income sources they consider acceptable to those who apply for one of their loans in BC.

For example, did you know that funds from a Canadian Pension Plan are accepted as verifiable income? The same is true for maternity leave benefits, Old Age Security, private pension plans, and employment insurance. There may be other forms of income that the lender will accept. When it doubt, ask and listen closely to the answer. Assuming one or more of your income sources is considered sufficient to receive a loan, you’ve passed the first hurdle.

Proof of Identity

You will need to provide proof that you are the person you claim to be. This will often involve providing documentation that confirms your identity. Some sort of official identification like a vehicle operator’s licence is often a good start. Some lenders will accept any form of identification that includes a photograph, like a college student ID. Most lenders are happy to provide a list in advance of what sort of documentation they will need to confirm an applicant’s identity.

Verification of Age

You must be of legal age in order to obtain a loan. While some lenders may approve a loan for someone under the age of 18 if they have a co-signer, that is not always the case. Just as you will need to provide proof of your identify, be prepared to submit documentation that confirms your age.

Confirmation of a Permanent Address

Residents are eligible for many different types of loans. One of the ways that you confirm your residency is by providing a permanent address. This must be the physical address where you live. It can be a home, an apartment complex, or any type of living facility. The key is that there is a physical location where you live permanently. If you have any questions regarding residency requirements, lenders like Magical Credit are happy to answer them.

Proof That You Have a Bank Account in Good Standing

You will need an active bank account that’s currently in good standing. The means the bank has not placed any limitations on your ability to use the account. There are some lenders who will require that you have an active checking account. Others will accept a checking or savings account.

Confirmation that you have a bank account you can use freely is essential. Most lenders will deposit the funds from an approved loan directly into that account. You will also need a checking account that you can use to remit loan payments through an online interface or by mailing a cheque to the lender through the post.

Some lenders will accept checking accounts related to institutions that operate online only. Others may require an account with a more traditional institution. It never hurts to check with the lender to ensure your bank meets their qualifications.

How would a loan make a difference for you? If there’s something that you need to accomplish, the right loan can make things a lot easier. Visit Magical Credit today and learn more about the types of loans offered and how you can qualify for them. The right solution will mean that the money is in your hands quickly and you can repay the loan using terms that are easy to manage.

Which locations are the best investment ideas for your business

Are you a business looking to grow in your respective market and invest in new office space? While London is a notoriously expensive area to operate in, there do exist plenty of areas offering affordable prices – especially for serviced office space that you can cultivate to make a solid home for your brand. Take a look below to find out more about some of the hottest working locations within the capital.


There are tonnes of Serviced Offices in Marylebone perfect for established businesses as well as growing start-ups. Marylebone is a chic residential area with a village feel, filled with indie boutiques and a range of tasty restaurants if you’re looking for an after-work treat. The area benefits from its central location and large train station, making it the perfect area for locals and commuters to travel into work whenever they need to. Situated in the affluent West End of London you’ll find yourself among areas like Fulham, Hammersmith and Chelsea, which each provide amazing areas for investment and business meetings.


Clerkenwell is a vibrant area in the centre of London within the sub-district of Finsbury. Clerkenwell is fast becoming a favoured location for new brands looking to invest in their localities with serviced office spaces perfect for start-ups. While working from Clerkenwell you’ll find yourself among a whole host of cultural activity as this location features nearby access to the British Museum and British Library, as well as the architectural mega-structure that is the Barbican Centre. What all these locations have in common is great accessibility and commuter links, which is vital for a workforce who are most likely working out of the capital.


Shoreditch is one of those London districts that perhaps gets a bad rap for being a centre of hipster activity. While that was certainly true for the east end location a couple of years ago, the area is quickly becoming a prime spot for business investment and brands looking to set themselves up in an area that possesses great transport links and events nearby. Shoreditch is also filled with quirky bars and restaurants, perfect for after work drinks or meetings in a vibrant and youthful district. Look into some serviced office-space today with a trip to Shoreditch.


While the glory days of Soho are now firmly in the past, the area still boasts some of the best office-space that London has to offer. Soho once had a reputation as being something of a seedy area but that couldn’t be more from the truth. These days, Soho is a hub of progressive activity, and business start-ups looking to establish their brands on the local patchwork. Soho is located within the City of Westminster and is a fashionable location for shopping, dining, and jazz nights. Why not invest in some shared office-space in Soho today – it could change the way your brand operates forever.

Hopefully this article has provided you with a little food for thought when it comes to planning some new office investment for your brand. While London provides endless opportunities for success, there are always new areas popping up that are quickly named the new, hottest area. It’s important to consider what you want for your business and what type of location will suit the goals of your brand.