How to Start a Restaurant in 2025: 10 Proven Steps for Success

In this article, we’ll reveal the minimum cost to start a restaurant and guide you through an easy 10-step process to set up your restaurant on a budget. We’ll also introduce an all-in-one restaurant tech platform to streamline your operations and enhance efficiency.
Publishing date 01/10/2025
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Opening a restaurant checks all the boxes of entrepreneurial success — pursuing your passion, serving the community, and of course, earning the big bucks. 

However, over 30% of restaurants fail within their first year, making it a risky venture for new entrants in the industry.

So, how to start a restaurant without incurring devastating financial losses?

In this article, we’ll reveal the minimum cost to start a restaurant and guide you through an easy 10-step process to set up your restaurant on a budget. We’ll also introduce an all-in-one restaurant tech platform to streamline your operations and enhance efficiency.

Let’s dive in.

What Is the Minimum Cost to Start a Restaurant?

The cost of bringing your restaurant vision to life can vary based on factors like your concept, location, rent, equipment, labor, permits, and a slew of other expenses. On average, you’re looking at anywhere from $275,000 to $425,000 just to get things off the ground.

That said, these are just broad estimates for a full-scale restaurant. If your idea leans more towards a food truck, a cloud kitchen, or a take-out-only model, your costs could be significantly lower. 

The key is understanding your concept and aligning your budget accordingly.   

10 Easy Steps to Launch Your Restaurant on a Limited Budget

However, even if you have the budget, actually opening a restaurant can be tricky. 

Here’s a 10-step guide to help get you started and position your business for long-term profitability:

1. Choose Your Preferred Restaurant Concept

A restaurant concept is the core idea that defines your establishment, shaping everything from the menu and decor to the vibe and service style.

Whether you’re inspired by fast-casual spots like Chipotle, full-service dining like Applebee’s, or quick-service giants like McDonald’s, your concept is key to success.

It helps you:

But before finalizing your restaurant concept, think about:

  • Customer Values: Align your business with what your audience cares about.
  • Menu Fit: Match your menu to the concept — think fine dining for premium seafood, not fast-casual.
  • Service Style: Decide between full table service or pickup based on your offerings.
  • Uniqueness: Stand out with features like farm-to-table, vegan menus, or locally sourced ingredients.

Pro Tip: Ensure your name, logo, menu, and food presentation bring your concept to life. Your website, for instance, should instantly convey what your restaurant is all about.

2. Draft a Business Plan

A restaurant business plan outlines how you’ll launch your business, guiding you through the startup process and helping you secure investors. It details your concept and proves its viability, with sections covering every aspect of your business. 

The key sections to include in your business plan are:

  • Business Overview: Summarize your business plan with an executive summary highlighting the key aspects of your restaurant business.
  • Company Profile: Compose a detailed description of your business strengths, strategies, and vision.
  • Ownership and Management Structure: Outline your ownership model and team structure.
  • Concept and Menu Details: Describe your restaurant concept and provide a sample menu.
  • Staffing Plan: Detail your staffing needs, costs, and specialized positions.
  • Market Research and Competition: Analyze your location, target audience, and competitors.
  • Financial Plan: Provide financial details, funding requirements, sales forecasts, and pricing projections.
  • Marketing Strategy: Outline your short- and long-term advertising and marketing plans.

3. Create a Delectable Menu

With your business plan in place, it’s time to get creative and design a menu that truly shines. Crafting the perfect menu isn’t just about choosing dishes — it’s about making smart, strategic decisions that bring your vision to life and ensure smooth operations.

Some factors to consider when designing your restaurant menu are:

  • Simple and Eye-Catchy Menu Design: Organize your menu logically with clear headings and readable fonts, making it easy for customers to navigate. Add pictures to make your menu items more engaging.

Avoid paper menus or printed pdfs that make it difficult to make revisions and leave no room for upselling opportunities. Instead, consider an online menu as a smarter alternative.

Check out how Milagro’s SmartMENUS can enhance user experience and create easy upselling opportunities.

  • Set Smart Pricing: Price your items based on ingredient, labor, and overhead costs to ensure profitability without overcharging. It’s also critical to avoid unnecessary expenses when you’re operating on a limited budget.
  • Focus on Profit: Monitor food costs and margins to ensure your menu generates enough profit for growth.
  • Predict Customer Demand: Use sales data and trends to forecast demand and align your menu with customer preferences.
  • Plan for Food Storage: Make storage provisions to minimize waste and ensure items stay fresh, with specific needs for temperature control or separation. Such due diligence beforehand can save you thousands of dollars from food wastage losses.

Pro Tip: Don’t skip the drinks menu; it’s a key profit driver for many restaurants.

4. Find a Space to House Your Restaurant

Next, you can shortlist potential locations for your restaurant.

Whether it’s a bustling city street or a quiet neighborhood, the space you choose must align with your concept, attract your target customers, and set you up for long-term success.

Pick a spot that’s easy to access for both pedestrians and drivers, with ample parking for customers. You’ll also want to consider the local population, understanding their age, income, and preferences to tailor your concept to their needs. 

Don’t forget to account for labor costs, as wages and laws can vary by location and impact your budget. Check out the competition in the area to identify if you’re likely to succeed. For instance, if the market is already saturated, it might be harder to stand out, but if there’s a gap, it could be an opportunity to thrive.

Lastly, make sure your chosen space is zoned for your type of business and complies with all local regulations to avoid future legal headaches.

What’s the easiest way to grab some customer attention?

Creating an attractive exterior for your restaurant.

Here’s a handy guide on maintaining your restaurant’s exterior to attract more customers and build a reputation.

5. Fund Your Restaurant

With all the basics in place, you’ll still need at least $275,000 to open a restaurant. 

What if you don’t have that kind of cash? 

No worries. Here are some alternative ways to fund your restaurant dreams:

  • Use Restaurant Incubators: At a restaurant incubator, you can test your concept with shared kitchen space and business guidance. Incubators also offer equity-free capital, mentorship, and a supportive community to help launch your idea.
  • Explore Financing Options:  Look into SBA loans, micro-lending, or alternative lending programs specific to the restaurant industry. These options often offer flexible terms and guidance for small business owners.
  • Connect with Local Associations: Restaurant associations offer valuable resources, from funding leads to industry advice. They can connect you with local networks, space, and programs to help get your restaurant off the ground.
  • Find an Investor: Angel investors are individuals who believe in your concept and can provide funding. Tap into your network of family, friends, or locals to find potential backers to support your vision.
  • Crowdfund Your Project: Crowdfunding on platforms like Kickstarter or GoFundMe can help raise startup funds. Focus on local promotion and offer great incentives to engage your community.
  • Start Small: Pop-ups and food trucks let you test your menu and concept without a huge investment. This approach helps you build a customer base and gather feedback before opening a full restaurant.

6. Secure the Required Permits and Licenses

Starting a restaurant involves securing several federal, state and local level licenses and permits. The specific requirements vary based on your location, but you must get all necessary permits/licenses to ensure your restaurant operates legally.

At the very least, you’ll need:

  • A business license to operate legally. 
  • An employer identification number (EIN) to hire staff. 
  • A foodservice license to meet health and safety standards. 

If you plan to serve alcohol, you’ll also need a liquor license. Additionally, getting a health permit ensures that your restaurant passes health inspections, covering everything from food handling to cleanliness. 

7. Procure Restaurant Equipment

Choosing the right kitchen equipment helps your restaurant operate smoothly, with must-have items like refrigerators, stoves, ovens, fryers, grills, and worktables. 

There are three ways to acquire your equipment, each with its own share of pros and cons:

  • Purchasing new items gives you reliability and often includes warranties, but can be pricey for a new venture.
  • Buying used equipment offers significant savings while still meeting your needs, though it’s important to check the condition before buying. 
  • Leasing allows you to avoid high upfront costs by paying a monthly fee, plus gives you the flexibility to upgrade as your restaurant grows.

Consider each option and pick one that best fits your budget, needs, and long-term goals.

8. Hire Experienced Staff

One of the most exciting and critical steps to opening a restaurant is building a team that’s as passionate and dedicated as you are. A great team doesn’t just keep things running smoothly; they set the tone for your restaurant’s culture and ensure your customers leave with a smile. 

Think about the benefits, training, and incentives you offer to create a space where everyone feels valued and motivated.

The key roles you’ll need to fill right away include

  • Management team to keep things on track. 
  • Kitchen staff such as a head chef, sous chefs, prep cooks, line cooks, and dishwashers to bring your menu to life. 
  • Front-of-house team like servers, hosts, and bussers to make the customer experience unforgettable.

9. Market Your Restaurant

Spreading the word and generating excitement is key to successfully launching your restaurant. 

But how do you promote your new venture without costly ad campaigns?

  • Start by building a user-friendly website that showcases your brand, menu, hours, and contact details, using platforms like Wix or WordPress. 
  • Claim your restaurant’s listing on popular directories like Yelp, TripAdvisor, and Google My Business to increase visibility and gain credibility through customer reviews. 
  • Use social media channels like Facebook, Instagram, X, and TikTok to engage with your audience and create viral content. 
  • Run promotions like a free drink or dessert to attract new customers and encourage repeat visits. 

Finally, host a grand opening event with special features like live music or wine tastings to create buzz and draw in a crowd. With these strategies, you’ll not only get people talking but also build a loyal customer base from day one.

10. Invest in the Latest Restaurant Tech

Investing in the latest tech stack, even for a new restaurant, isn’t a luxury but a necessity.

Think of restaurant tech as your secret weapon for streamlining operations, boosting efficiency, and delivering an outstanding customer experience. Imagine having a point-of-sale (POS) system that integrates with your kitchen, automates orders, tracks inventory in real-time, and gives you insights into sales trends. This not only saves you time, but reduces errors, and even prevents costly waste. 

With a reservations and waitlist platform, you can optimize seating arrangements, reduce wait times, and enhance customer satisfaction. And don’t forget about online ordering and delivery platforms, which are no longer optional when customers expect convenience at their fingertips. 

In an industry where margins are perceived as thin and customer expectations high, the right tech can be the difference between surviving and thriving.

Looking for the perfect, all-inclusive restaurant tech solution?

Milagro: The All-in-One Restaurant Commerce Platform You Need

If you’re just getting started in the restaurant space, it might be a hassle to getting alignment from multiple vendors and maintain a bunch of different contracts. As a first-timer, it’s better opt for a comprehensive tool that can take on multiple aspects of your operations.

Milagro can help you there.

It is an all-in-one restaurant commerce solution that streamlines a range of operations within your business. Whether it’s payment processing, waitlist management, online ordering, or even marketing automation, the platform has all the tools you need to succeed. Milagro also offers a powerful customer data platform that delivers actionable insights about each guest so that you can personalize your service and marketing efforts to boost repeat revenue.

We’re here to help!

We’re here to help!

Are you dealing with complex Sales Challenges? Learn how we can help.

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