Are you looking to start a Food & Beverage and not sure how much it costs?
EasyVend has put together 5 of the most common expenses associated with starting a Food & Beverage Business in Australia.
1. Location
The largest cost you will need to be prepared for if you are looking at opening a Food & Beverage business whether it be a Café, Restaurant, Bakery, or anything in-between is the location cost. A location cost will largely come down to where you want your business to be located and more importantly the size you require.
Before you consider opening a Food & Beverage business it is important that you understand where you want to trade and how much space you require. It is important that you choose a location that will allow you to grow in the future. The last thing you want to do is choose a location that is too small, moving locations will cost your business significantly every time you decide to do so.
If you are looking for location costs, you should be prepared to spend between at least $50,000 – $250,000 on location costs depending on size, fit out and location.
Location Expenses: One of the Largest Business Setup Costs
Location plays a huge part in the cost to open a business in the food and beverage space. The area you choose shapes how people find you and how your business feels from the moment someone walks in.
A lively spot gives you instant exposure, while a quieter location helps you keep your business set up costs lower at the beginning. The best choice depends on available capital and the customers you want to reach.
Every site brings its own expenses. Rent, council approvals, layout updates, and basic structural work should be included in your business start up costs.
Your location decisions also shape how much money do I need to open a business. Bonds and advance rent are usually required early, so these early payments give you a clearer picture of your launch budget.
A good location sets the tone for your customer experience and gives your business a strong start from day one.
2. Equipment
To operate a Food & Beverage business of any kind you will need to have the appropriate equipment. Before you set off on your journey of beginning a Food & Beverage business it is important that you understand the equipment you require to operate whatever type of F&B business that you are looking to start.
You should research what tools you need, how much they will cost, the on-going maintenance costs and any other associated costs like warranty, insurance etc. The average Food and Beverage Industry Equipment costs has been found to be slightly under $100,000 depending on quantity, size and individual requirements.
3. Product Costs
As a Food & Beverage business you will need to acquire the relevant products to be able to trade. For example, if you are a bakery, you will need to order Flour, Eggs etc. As a Food Distributor you will need to source products directly from the supplier and so on.
It is important that you familiarize yourself with the products that you require and their costings prior to starting a Food & Beverage business. It is important to note that as inflation rises, product prices will follow suite. You should always keep a buffer in your product cost forecasting to take into account economical factors. It has been found the average Food and Beverage business pays between $2,000 and $10,000 on product costs every month.
4. Staff
Arguably the largest overhead of operating a Food & Beverage Business – Staff. If you are looking to open a Food & Beverage business, it is vital that you understand your staff requirements and the ongoing costs of having staff.
The more staff that you have, the more your business will need to pay. To achieve profitability, it is vital that you only hire the correct number of staff required to complete the job at the highest level. The last thing that your business wants is to have staff standing around looking for work!
Before you start your journey of opening a Food and Beverage business think about what you need, what you want your staff to do and more importantly what you expect. This way you will have an accurate idea and can forecast costings and future business earnings prior to open.
It has been found that the average labor costs for Food & Beverage Businesses it 30% of all revenue.
5. Marketing
Marketing is a large but vital expense. To acquire customers to sell your Food & Beverage products to, you will need to market your business and build your awareness. To do so will cost your business money.
You should put together a Marketing plan which outlines what type of customers you are looking to acquire and how you are going to go about acquiring them. Are you going to use Online Advertising? Are you going to create a website? Will you hand out flyers? These are some of the things you need to answer.
Marketing costs will vary depending on the scale and what method you are looking to use to Market your business.
Related Article: Best Ways to Market Your B2B Food & Beverage Business.
Marketing and Brand Development: Essential Business Setup Expenses
Marketing is a real cost that deserves space in your launch budget because it directly affects how fast customers discover your business. From the look of your logo to the quality of your photos, every touchpoint shapes the first impression people form about you.
Branding assets, signage, photography, and your online presence all sit within your company start up costs. These elements help you stand out in a crowded market and give your business a clear identity before you even open.
Digital activity is another key expense. Website development and paid advertising can bring steady attention long before launch day.
When you approach marketing with intention, your business enters the market with energy rather than waiting for foot traffic to find you.
Final Word,
There are many associated costs with starting a Food & Beverage Business. Before you set off on your journey of starting a Food & Beverage business it is important that you familiarize yourself with the upfront and ongoing costs and put together a cost analysis to help you decide whether it is the right decision or not.
We hope you enjoyed reading this article. To read more articles like this, please visit the EasyVend latest news page here.
About EasyVend,
For food and beverage businesses, EasyVend supports and automates every part of your business, freeing you up to grow your sales simply, unlike other ERP systems.
EasyVend features include Stock Management, Online Ordering, Invoicing, Receipting, Automatic Credit Card Payments, Xero Accounting Integration, Route Management, Business reporting and more.
To learn more about EasyVend and what sets us apart call us today on 1300 473 744 or submit the form below.
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Calculating How Much Money You Need to Open a Business
A practical way to determine how much money do I need to open a business is to map out every fixed and variable cost you will face in the first six months. Rent, equipment, stock, staff, compliance, and marketing all form a clear roadmap. Once you add a buffer for unexpected expenses, you gain a realistic view of how much to start a business without feeling stretched too soon.
FAQs
What is the average cost to open a business?
There is no single figure, but new owners typically invest in premises, fit-outs, stock, staff, insurance, and marketing. These form the core of your business startup costs.
Is $10,000 enough to start a business?
It may be enough for small, home-based, or mobile concepts. Physical food premises usually require more capital due to commercial equipment and lease commitments.
What ongoing costs should new food operators expect?
Expect ongoing spending on stock, wages, utilities, equipment servicing, and marketing. These recurring costs define your cash-flow needs long after opening day.