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Running a small eatery carries less risk compared to a larger restaurant due to lower investment requirements. Additionally, this model is flexible and can easily generate profit. So, how much capital is needed for a small eatery business? Let’s explore the answer with Kamereo in the following article!
How much capital is needed for a small eatery business?
The amount of capital required to run a small eatery depends on various factors, but you need at least around 100,000,000 VND to start. This amount includes costs for renting or buying premises, equipment, ingredients, utilities, staff salaries, and other expenses.
Premises rental costs
The rental cost depends on factors such as central location, convenient transportation, and spacious parking. Therefore, rental prices range from 5 to 30 million VND/month. If the space is spacious, airy, and conveniently located, the rental cost will be higher. When signing a lease contract, you typically need to place a deposit for 3 to 6 months, so you should prepare at least around 16,000,000 – 90,000,000 VND just for premises rental.
Kitchen equipment costs
Kitchen equipment like pots, bowls, plates, chopsticks, spoons, freezers, refrigerators, etc., can be bought new or second-hand. Depending on the size of your eatery, you should budget around 20,000,000 – 30,000,000 VND for these items.
Ingredient costs
In the small eatery business model, ingredients are often purchased daily, so prices vary by day and season. Based on the daily customer volume, you can estimate the amount of food needed for preparation, budgeting around 3,000,000 – 5,000,000 VND.
If you haven’t found a reliable food supplier, consider Kamereo. With years of experience, we complete thousands of orders monthly. Kamereo ensures accurate delivery times, avoiding disruption to your business operations. Currently, Kamereo offers various promotions for new partners. Orders from 400,000 VND will be delivered in HCMC and Binh Duong, with customers getting up to 1% cashback on monthly invoices totaling 20,000,000 VND.
Read more: Introduction to Kamereo brand
Decoration and tool costs
To attract customers, your eatery should have unique and appealing décor reflecting its culinary style. Additionally, you need to purchase tables, chairs, plates, knives, forks, spoons, etc., for customers’ comfort. List the detailed items needed, with costs for these aspects for a small eatery ranging from 30,000,000 – 40,000,000 VND.
Staff salary costs
When starting, hire about 2 part-time staff, especially during peak hours. Thus, staff salary costs range from 2,000,000 to 3,000,000 VND per person.
Software and support equipment
To accurately manage revenue and profits, your eatery needs a sales management software and hardware like a handheld mini POS machine, receipt printer, etc. For small eateries, the management-sales model only needs basic functions like order cancellation, kitchen requests, billing, receipt printing, and take-away orders. Therefore, the owner can easily choose a software package suitable for a budget of around 2,000,000 VND/year.
Small eatery business experience
After understanding the costs for opening a small eatery, you can create a suitable budget. Here are some tips to optimize your capital:
Learn about the F&B business
Starting a small eatery is a smart choice for those without much experience in the F&B industry. With a small scale, you can run the business while learning and improving your management skills. However, starting a small eatery does not mean just investing money guarantees success.
Equip yourself with basic knowledge about running an eatery to minimize risks and maintain effective operations. Learn from experienced people in the industry, join forums or Facebook groups on legal regulations, food safety, cost calculations, etc.
Determine what your eatery will sell
Once you have the estimated capital, identify clearly the products you want to sell. This requires market research, especially niche markets with low competition but high potential.
Choosing the right location is very important
Running a small-scale business doesn’t mean you can choose any location or cost. The eatery should be conveniently located and easy to find to attract customers. Identify clearly your business products, estimate the number of serving tables, and the maximum serving capacity to choose the appropriate space. If the premises are too large and underutilized, it leads to space waste and creates an empty feeling. Conversely, a too-narrow space with poor arrangement can make the eatery cramped and uncomfortable for customers.
Selecting ingredients
One challenge in running a small eatery is lacking capital to stockpile supplies like large restaurants. Therefore, finding green-clean food sources is crucial. You can buy ingredients from wholesale markets, which may be cheaper but often lack quality assurance.
Hence, you need shopping experience to avoid being deceived. Alternatively, purchase directly from farming sources for wholesale prices, requiring pre-existing relationships for order placement and price negotiation.
Setting appropriate prices
Customers dislike visiting an eatery without clearly listed menus and prices. Maintaining fixed prices can reduce your profit margin but creates a positive impression, retaining loyal customers and ensuring stable income. However, when applying this strategy, ensure to keep allowable profit margins and avoid selling below cost. For small eateries, maintaining capital for continuous operation is critical.
Ensuring service quality
Small eateries cannot compete with high-end restaurants in terms of facilities. Therefore, besides price competition, focus on excellent service to attract customers. Always be attentive and friendly, fulfilling customers’ needs, and consider adding perks like free drinks or mints to enhance service quality. Staff represent your eatery directly.
Regardless of how good the food and décor are, poor service can render all other efforts meaningless. Initially, hire part-time students to reduce staffing costs. However, this might lead to workforce fluctuations. Ensure staff are well-trained, hospitable, and friendly.
Optimizing marketing plans for small eateries
In the early stages, brand recognition is crucial. This helps customers know your eatery, increasing the likelihood of trying your food and supporting long-term business sustainability. If budget is tight, distribute flyers around the eatery, offer discount vouchers, and link with delivery partners like GrabFood, Shopee Food, etc., to boost online sales.
Read more: Top 8 food delivery apps to boost your sales
Conclusion
The above outlines the costs for opening a small eatery. Hopefully, this article provides useful information to help you maximize profit. Follow F&B business experiences to keep up with market trends!
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