Many people asked me how much money is needed to open a restaurant in Malaysia. Is RM50,000 enough? Do I need RM1,000,000?
I can never answer those questions because the amount of money needed to open a restaurant depends on many issues, such as:
Location
To operate a successful restaurant, we need to choose the right location. However a good location usually comes with an expensive rental. The start-up cost will have to include the payment we need to pay for the rental deposit and advance rental. To open a new restaurant, usually a landlord will require 2 months deposit and one month utility bill. The Utility company will also require a deposit if you want to register your new restaurant for the electricity supplies.
Renovation budget.
How much money do we need for restaurant renovation? Restaurant renovation can be as little as RM5,000 and can be as much as to RM2,000,000. Restaurant renovation cost depends on the condition of the premise and the concept of the restaurant. Renovation cost structure for restaurant is different from house renovation. Restaurant renovation can be one of the major expenditures during the start up.
Equipment & Furniture.
We need to list down all the required restaurant equipment and furniture for the restaurant and get quotations from several restaurant suppliers. The amount we need depends largely on the menu and restaurant layout. It also depends on whether we buy new or used equipment and furniture. The equipment used for restaurant business is different from household equipment. It has to be industrial quality that can sustain the busy activities in the restaurant operation.
Supplies and Inventory.
Before a restaurant starts, we need to spend money for the purchases of food and beverages inventory, tissues, printing materials, cleaning supplies, etc. How much we need to reserve also depends on the concept and the menu of the restaurant.
Licenses.
We need to include how much money we need to pay for restaurant business licenses, company incorporation, foreign workers levies, etc. The amount of money needed is determined on whether or not we want to serve alcohol in the restaurant and whether or not we want to employ foreign workers in the restaurant.
Human Resources.
You need to know how many staff you want to hire for the restaurant (both kitchen and service) and how much salary you need to pay for each position. Reserve at least 3 months of staff salary in the budget so your restaurant can run smoothly during the initial stage when the sales are still low. The amount of staff needed in the restaurant depend largely on the restaurant layout and the restaurant operating hours.
You can find the template in my ebook on how to calculate the total capital and expenditures of opening a restaurant in Malaysia. Use that template and modify them to suit the kind of restaurant you plan to open.
