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.
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.
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.
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.
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.
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.
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