How To Open A Restaurant With Less Budget In 2021

how to open a restaurant

People with an entrepreneurial mindset often wonder if a restaurant will be a good business idea or not. However, even if they think it is a good idea, less budget can be a significant hindrance. That’s why you must know how to open a restaurant even when you have a small amount of money.

Well, you can’t possibly open a big restaurant with a low budget. So, you have to start from scratch, which means opening a small one and then expanding it. But, first, you have to find out the expense of opening a small restaurant. So, let’s start.

How Much Does It Cost To Open A Restaurant?

Well, there is no fixed budget that will help you with any restaurant idea. So, if you want to know how to open a restaurant, you have to consider a lot of factors first. The location of the restaurant matters the most in this case. The better the plot, the higher the price.

So, choosing a property in your neighborhood will be a good idea. Since you already have an idea of the pricing of those plots, you can negotiate with the broker quickly. 

On average, if you open a small restaurant also, it will cost you approximately $275,000. Now, you may not have this much money at first, so choosing the right investors will be more accessible.

So, the more important question is how much it costs to open a restaurant than how to open a restaurant. With this average figure, you can make some adjustments, but the paramount price will depend on your restaurant location.

How To Open A Small Restaurant With No Money?

We will start from the basics. If you have no money to open a restaurant, it will be better to follow the next few steps. We will guide you on the path of how to open a restaurant with no money here.

Step 1: Decide The Size And Concept Of Your Restaurant

Well, it’s pretty evident that if you don’t have any money, you will think of opening a small restaurant at first. Decide the theme and cuisine of your restaurant. It is required because your restaurant’s interior needs to be perfectly synced with the cuisine or theme. Prepare a business plan because you will need it to pitch to the investors. 

Step 2: Find The Right Investors

If you have no money to start a restaurant, you will need to find the right investors. It will take you some time, to be honest. That is because finding people who will give you money to start a venture is challenging. First, depending on your restaurant’s size and concept, you must focus on how much capital you need to fund your business. Then, once you have a rough expense draft, you can apply for a personal loan or find angel investors.

Step 3: Evaluate All The Costs

You will have to evaluate all your associated business costs once your meeting with the investor is done. First, find the overhead cost, labor cost, marketing cost, food cost, equipment cost, etc. Then, evaluate their amounts and determine which ones will remain unchanged even if the market demand fluctuates. For example, the pandemic of Covid19 has destroyed the business of many restaurants. So, if you don’t want to undergo a financial loss, you should double-check your expenses.

Step 4: Choose The Right Spot

Price and competition are significant factor when it comes to choosing the right spot for your restaurant. If you are still wondering how to open a restaurant, you may reconsider your decision. That is because choosing the right place will decide the fate of your small restaurant.

The location must be accessible through all modes of transports. It must be visible on Google Map. You will also need a no-objection certificate from the neighbors of the location. 

Step 5: Get Done With The Licensing Requirements

You have to apply for business registration, tax registration, liquor lice4nse, trade license, food service license, etc. Apart from that, you will need a food handler’s permit, certificate of occupancy, building health permit, and sign permit too.

You don’t want your small restaurant to undergo any legal trouble when it first starts to boom. So, focus on all of these licensing requirements to stay on the safe side of the authority.

Step 6: Find Out The Manpower

Even if you want to know how to open a restaurant of small size, you will need to follow this step. The most important thing will be to hire the right chef because a restaurant’s business depends entirely on its food.

You will need a few helping staff, service staff, and maybe 1-2 management staff for your small restaurant also. You can take the help of your chef to decide the stellar menu of your restaurant too.

It may not be possible for the chef to make it alone if you do it alone because you are not experienced in the cooking domain. So, take it from the expert. You will also need to find the right vendors and suppliers whose quotes will be in your budget. 

Step 7: Incorporate The Right Technology

It doesn’t matter if you want to open a small restaurant or a big one, technology is essential in both of them. You should find the right point of sales software and the right transaction tool if you want to know how to open a restaurant. Customers must have a few options to pay and to book a table at your dining. 


If you are still willing to know how to open a restaurant, you must be passionate about it. Unfortunately, most people skip the idea of a restaurant when they find out the many steps involved in the task. However, we have outlined some basic steps here that anyone can follow to open a small restaurant. So, start with the first step, and fulfill your dream of owning a restaurant now. 

Frequently Asked Questions (FAQs)

1: How will I Know If My Restaurant Will Generate Profit Or Not?

Ans: Well, there is not a detailed guide to find out if the restaurant will be profitable for you or not. However, restaurants are usually beneficial. So, it will most likely generate a good return on your investment if it is located at a good spot. Wait for at least two years before you start seeing profits.

2: How To Open A Restaurant With No Experience?

Ans: There is always a first time for everything, so don’t worry if you don’t have enough experience in the hospitality industry. Come up with a unique idea, get it checked by someone professional, and conduct proper research on the internet. Don’t choose a statement, which will be too risky, and you will be set to open your restaurant.

3: How Much Should A Small Restaurant Make In A Day?

Ans: There is no definite amount that a restaurant can make in a day. But, it should at least generate $1,350 per day to accomplish a profit margin. If your small restaurant does not make this amount of money, review your business plan once again. 

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