Costs to open a small BBQ Joint? Your best guesses?

Looks like I'm going to be laid off in July 2009. My wife has told me to follow my passion and finally open a BBQ Joint / Premium Spice Shop.

I want to focus on takeout but still have maybe 10 - 12 Tables. The spice part will require 800 - 900 SF of space.

That part aside, I have no idea how to figure out what to budget for a kitchen. I do think I will be using one of the larger Cookshack units.

If any of you have started a BBQ joint similar in size to what I am thinking, can you share what you learned while getting ready for opening your place?

BTW, I do realize prices may be drastically different based on locale. But at least I can start planning, and I hope to be ready by mid 2009.....

Thanks.
Original Post
One resource that you have is John Shiflet, Cookshack's sales manager. He has helped hundreds, maybe thousands, of people get started in businesses as you describe. You can call him at 1-800-423-0698 and pick his brain. We are not going to put the hard sell on you or make you feel uncomfortable. We are here to help people solve their barbecue problems. Our philosophy is that we want to make loyal customers, not make quick sales.

I know you will get lots of good information from the members of this forum as well. We have lots of experienced barbecue professionals here.

Check the results I got from this search, too.
New Business - Professionals Only Forum

Best wishes for success!
Below is what my budgeted startup costs were. The only difference was that instead of leasing, I decided to build my own store, which added $125,000 to the cost. I left the leasing figures in place. By the time the doors opened, my reserve shrank to 19,000.

Building
Lease(first 6 months) 18,000.00
Remodeling........... 5,000.00
Electrical & Plumbing 3,000.00

Equipment
Pit Smokers........ 13,000.00
Walk-in Cooler...... 4,000.00
Freezer............. 2,000.00
Fryer............... 800.00
Grill............... 2,000.00
Range/Oven.......... 1,200.00
Sandwich prep station 800.00
Tables and chairs... 1,000.00
Hot holding.......... 500.00
Cookware & prep tools.. 500.00
Storage containers.... 500.00
Hood system........ 7,200.00

Startup Inventory
Food........................................ 4,000.00
Prep ingredients (spices, oils, sauces, etc.)... 800.00
Disposables (dishes, napkins, utensils)...... 1,000.00
Janitorial supplies..............................500.00

Licenses & Fees
Food establishment permit...... 2500.00
Business license ............. 450.00
State Licenses and Fees ..... 300.00
Fire Certificate............. 300.00

Business Costs
Consultants ...... 2,500.00
Insurance....... 500.00
Stationary, Supplies 600.00

Marketing
Print Advertising... 5000.00
Radio.............. 1,000.00
Flyers............. 600.00
Signs............. 2,000.00

Utilities
P.U.D. (electric)...2000.00
Telephone........... 400.00

Cash On Hand
Start-up reserve.. 25,000.00
quote:
Originally posted by Papa Deuce:
Dave, I can't possibly thank you enough! This is exactly what I needed.

Is your place similar in size to what I am thinking?


You're welcome Papa. My place is 1600 sq ft. with seating for 35. My kitchen is a good 550 sq ft because I wanted to earn extra income by leasing commercial kitchen space to other entrapeneurs(sp). The extra space was also necessary so that there was plenty of elbow room to prepare catering orders at the same time as serving the needs of the customer in the store. The expense of the extra square footage from 1,000 sq ft to 1600 sq ft was pretty negligible to the overall costs.
Dave, I like the idea of being able to rent out the kitchen. I know that in my area I have not been able to find such a resource....

Is the 550 SF part of the 1600?

I needed all this to give my wife an idea of what to expect.

How long has your place been open? And, in general, how hard was it getting all the paperwork / permits?

Again, Thank you so much.
quote:
Originally posted by Papa Deuce:
Dave, I like the idea of being able to rent out the kitchen. I know that in my area I have not been able to find such a resource....

Is the 550 SF part of the 1600?

I needed all this to give my wife an idea of what to expect.

How long has your place been open? And, in general, how hard was it getting all the paperwork / permits?

Again, Thank you so much.


That is exactly why I planned to rent out my kitchen, there was an unmet demand. In that way, my kitchen is making me money instead of just sitting unused. Same thing with my pits. They are always producing product; if I'm not doing my bbq, then I'm doing bbq for someone else. If I'm not doing bbq for someone else, I'm making jerky. The only "down" time is for routine cleaning and periodic maintenance. I want my investment to stay busy making me money.

The 1600 sq ft of store is inclusive of the kitchen. Keep in mind that you also need some space for office stuff, public restroom(s), and storage space for supplies.

My business planning took about two years while I was employed full time with our health district.

Securing funding took about 4 months. It actually went very smoothly due to the business plan I put together.

Permitting took almost 5 months of constant pushing before a single shovel of dirt was turned; leasing would have eliminated that.

Permitting for the restaurant only took a total of two months. The first phase which took place before construction, involved among other things, presenting the restaurant drawings/plans and filling out the menu/food preparation HAACP plan. The health district then reviewed the two to determine if my menu preparation and plans was permitable with the facility which would be constructed.

The second phase occured once construction was completed and about 10 days prior to opening. The health inspection team performed an inspection of the kitchen, restrooms, employee area, and other systems (water dispensers, soda machine hookups, etc). I passed 100%. The inspection then proceded to look at the paperwork (foodhandler cards on file, methods for logging refrigerator and hot holding temperatures, method of logging pit temps for unnatended cooking, report forms, etc). After passing that section as well, the health district permit was issued.

The fire department inspection took about an hour. The fire chief came himself to look at the hood and fire suppresion systems, looked at exits and signs, looked for inspectors signatures at the electrical panel, and looked at the gas hookups for the range and fryer, and the automatic emergency gas cut-off valve.

I won't go into the final building department inspection which was required for the new building's occupancy permit.

The day before I opened the doors to my small, mom-n-pop bbq joint I had lost over 45 pounds, had irritable bowel syndrome, and was severly sleep deprived from spending 20 hour days getting the "final touches" completed during the two weeks prior to opening. And I was feeling absolutely euphoric.

Now that I am my own boss, I have worked harder than I've ever worked in my life. I worry more than I ever have in my life. I see my family far less than I have before opening my place. But after three years, things are getting better. Would I do it all over again? I honestly don't know; I might choose to do something like a mobile vending operation, or focusing on pick-up only service.
Once again, I really appreciate your thoughts... I never expected anybody to give such detail.

I honestly don't think I will mind working so hard as it is a passion of mine. I'm also tired of working for people who seemed to make their life's purpose to make their employees miserable.

One last question, if I may... since my place would be similar to yours, is it financially viable? I don't need to make much money as my wife is the primary breadwinner in my home.

I'd be leaving a 75K a year job, and think I would be happy if I caould make 45K - 50K doing what I love, which is making people happy with good food.
quote:
Originally posted by Papa Deuce:
I honestly don't think I will mind working so hard as it is a passion of mine. I'm also tired of working for people who seemed to make their life's purpose to make their employees miserable.

Passion is a definite plus; it was mine as well. Passion for a goal will get you out of bed when your muscles are growling at you and your eyes rebel at the thought of opening. Passion will help you put up with the compost that needs to be shoveled out of the way just to make a tiny bit of progress. Eventually you will want to get to a point where you are acting as the owner of your business, and not as just another employee of your business. That is where I'm at today.... trying to figure out if I am yet the owner of my own business. Smiler

quote:
One last question, if I may... since my place would be similar to yours, is it financially viable? I don't need to make much money as my wife is the primary breadwinner in my home.


I had much the same situation. When I retired from the health district my wife, an R.N., acted as the primary bread-winner and insurance source for quite a while. It was a blessing. Having a money reserve was a necessity. Not expecting to make much of a salary for the first year became the reality.

I would never tell anyone that they can expect to pull a salary from a business in the first year. When it happens it is great. Most foodservice businesses fail due to under-capitalization... and that includes the failure to have enough money set aside in a bank account to live off of during lean times. Lean times are to be expected; sometimes it's seasonal, sometimes it's because a new restaurant has opened up sucking away the customer base for a while; sometimes it's just because... there seems to be no rhyme or reason. That is the reason for a healthy reserve account. And that is the reason to do what Joseph did in the Old Testament...store away the surplus for the time of famine.

Let me post something that I posted in a different food forum a bit ago:

Matt, a target market of 100,000 is NOT a small market. There are bigger markets than yours, but yours is by no means small. My target market is 42,000. You are on the right track at this time by focusing on becoming educated and technically competent in your future craft and learning the art of vending food. But success in the retail food service trades is only partially dependent on that factor.

Within ANY target market the food vendor has competition from EVERYONE who sells food. Your market is everyone who eats food. Your mission as a small business owner is to get as many people as possible to eat your food instead of anyone else's food...including the food that people might prepare for themselves. Are you up to that challenge?, because MARKETING IS THE SINGLE MOST IMPORTANT THING YOU WILL DO IN ORDER TO SUCCEED.

Marketing is NOT just advertising. Marketing is everything you do to increase your customer base by taking business away from your competition. Marketing is convincing the customer base that they want and need what you sell. Marketing CAN include media advertising, but media advertising is just one tool, and probably the least important tool in the long-term. How you look and how your cart looks, how good your food is, your location, door-knob hangers, supporting fund-raisers, going to businesses to give samples, putting flyers on cars in parking lots, towing your brightly decorated cart through neighborhoods, sending out PSA's to the media, joining the Chamber of Commerce and rubbing elbows with business leaders, handing out business cards with a coupon on the back which gives a percentage off of the cost of the first purchase...... the list of things you can do to market your business is nearly endless.

Word of mouth is one type of marketing, but it can be inefficient. It can take YEARS for good word of mouth to overcome the inertia of being new, unknown, and having no reputation. This is a case of "If a tree falls in the woods and no one is around to hear it, etc, etc". Well, if you have a great product and very few in your market know about it, what are your chances of success? Can you succeed in a market of 100,000? Abso-honking-hairy-lutely. And you can also fail in a market of 100,000. But a failure would not be because of the size of your market, it would be because of the size of your marketing.
I opened my BBQ & Burgers restaurant in mid March 2008. I seat 35ppl comfortably, and I have the only drive thru in a town of 1000ppl.

I chose to have a flat-top grill to do burgers with because the building I took over used to be a "Dairy Kreem", (local mom & pop burger and shakes.) I figure "normal" people can't eat BBQ everyday and the burgers and grilled chicken give them an alternative.

So, that given I have the captive audience for drinks thru the window, and there is not another "good" BBQ place around for 300 miles.

I agree with Dave Bugg on most everything except the following...

Business Costs
Consultants ...... 2,500.00
(Consultant? Do you know how to cook great BBQ? What else do you need consulted on that you can't find in some forum somewhere? My BIGGEST advice on this is get a good CPA before you purchase one single thing, however this shouldn't cost you $2500.)

Marketing
Print Advertising... 5000.00
Radio.............. 1,000.00
Flyers............. 600.00
Signs............. 2,000.00

(Put up a sign and open the doors, when you have the money to throw at advertising, do so. But I wouldn't throw $8600.00 at advertising in my first year... If it's good the word will get around!)

It took 2 months longer than anticipated to swing my doors, then I had to go back to my friendly banker and beg for $5000.00 for my first couple trucks. Be prepared for this.

Best of luck to you and if you have any other questions, need recipes, or just need to vent, my email is DukesRibs@gmail.com
quote:
I agree with Dave Bugg on most everything except the following...

Business Costs
Consultants ...... 2,500.00
(Consultant? Do you know how to cook great BBQ? What else do you need consulted on that you can't find in some forum somewhere? My BIGGEST advice on this is get a good CPA before you purchase one single thing, however this shouldn't cost you $2500.)


Consultants had nothing to do with bbq; I cooked bbq for 32 years prior to opening my own place. And I spent a large portion of time during 7 years prior to writing up my business plan using vacation and unpaid leave to visit (and work at some) 282 different bbq joints around the country so that I could absorb as much info on the restaurant trade as possible. Nope, the budget for "consultants" had nothing to do with cooking or restaurant design. The "consultants" were the group of individuals, from property assessors to accountants, that required fees in order to perform an actual service. The time I spent researching and writing my business plan anticipated this expense and was included as a line item for the loan package.

The cost for "consultants" will vary; here is just an example of a few of the most expensive ones I used:
> An attorney to review my contracts with contractors and to advise me on city codes when conflicts arose over signage, landscaping, sidewalks and other stuff.
> A CPA to setup the books (in my case Quickbooks) and to begin setting up the corporate entity (an LLC) for filing with the state.
> A bookeeper who obtained my books and other information from my CPA, prepared all the paperwork for opening accounts with the state employment security agency, the state Dept. of Revenue, the IRS (gotta get those account numbers donchaknow), state L&I, etc.
> Landscape architect. My city requires any developed lot to be landscaped and requires a plan be submitted by a licensed landscape architect or designer.

Over the course of opening the business, spending $2500.00 was close to what was budgeted for that line item.

quote:

Marketing
Print Advertising... 5000.00
Radio.............. 1,000.00
Flyers............. 600.00
Signs............. 2,000.00

(Put up a sign and open the doors, when you have the money to throw at advertising, do so. But I wouldn't throw $8600.00 at advertising in my first year... If it's good the word will get around!)


I agree the amount spent on marketing WILL vary and does not need to be the same as mine, but I wonder if you read my other posts in this thread. I spent a lot of time looking at what I needed to do to capture the attention of customers in my area, and I budgeted accordingly. A small hamlet with one main road, would not require even 5% of the money I had budgeted, but in my location the amount I budgeted was realistic. The point is this: I did not advise the OP to spend the same amount of money that I did for marketing. I would not do that because I haven't a clue as to his location, market, or town. By that same token, you should not advise the OP that just hanging out a sign is sufficient.

The more guerilla tactics you can use, the fewer dollars need to be spent. It depends on a lot of factors, including the size of the town, the size of the market, and the visibility of the location. But the advice to just hang a sign on the door and word of mouth will bring them in is a potential disaster waiting to happen.

My store is invisible from the road and is on the opposite end of town from "restaurant row" and the motels and bars. Can you imagine how long it would have taken to attract my first customer if I had taken the advice to "just hang a sign"?

To overcome my location's handicap, I needed a sign 40 foot tall. Two weeks prior to opening: I hired a few individuals to blanket various neighborhoods throughout town with doorknob hangers. I did a newspaper insert. I did radio advertising that rotated between the 5 most popular radio stations. I sent a PSA to the local paper's business reporter. I put a big ol' sign on my pickup. I passed out cards at the mall. I put flyers on car windshields at several grocery stores. In my small store, I did over 6500.00 on opening night, and word of mouth began to get out. That would have never happened if I had just hung a sign on the door.

Sometimes word-of-mouth works but that is the exception, not the rule. I have seen dozens of beginners around America close shop within 6 months after opening thinking "if I build it, they will come". Sometimes they honestly believed in the word-of-mouth-only concept of marketing. Sometimes they went into business with such a lean budget that they thought they would save money by not spending any funds on marketing. In the last 2 months alone in my town, 3 new eateries have closed shop. They had great product, but very few people knew they even existed. In talking to these guys, they had thought that word of mouth would bring the customers, and they didn't budget anything for marketing, nor did they do anything to market their places.

Just my two cents. Smiler
I think Dave may have hit on this. I couldn't read all of his posts right now because I've got to go to bed, but before I do, I wanted to throw this in for consideration.

What kind of future do you want? I grew up in the restaurant business. I have owned several restaurants, and developed concepts for dozens of others via a franchise incubator I used to work for. I miss the restaurant business almost every day which is why I got into catering a few years back. Now in my weaker moments I'm considering opening another restaurant. Back to the part where I said I missed the business; I want to make it clear, this is not because I loved the business in any normal, good sense. It's more like a heroin addict misses heroin even years later. I can assure you that my life is better in every way I can think of being out of the restaurant business. Daves description was excellent I thought. Even if you get into this business and love it, you will eventually discover a limit to that love.

But, FWIW, I would consider this, which goes back to my original question: What do you want in your future? If you open a mid-sized restaurant, you'll have a job. Likely an 18 hour a day job, 6-7 days a week, forever. You will make a living, but you'll work your buttocks off(Dave lost 45#), and the restaurant will more than likely NOT make enough for you to hire a real manager to relieve you of some of the burden. You'll have what are called "turn keys" around here, which means someone that just opens or closes and you'll have to check up on them constantly. Heck, you'll have to do that even with a real manager. But your wife and kids will love you, and they'll send you pictures of themselves on vacation while you're back home tending the pits. Frowner

If you can open a small, maybe take-out only type place that would need to be staffed just a few hours a day, and use that to supplement a catering business and your other income, you might be able to have a life outside the restaurant. Maybe a catering truck that sets up in the same place every day from 4-8pm. It works for the Mexicans around here, it might work for you too. If you're lucky, it could also be rent free.

Or, find a super high volume location. Open 3 meals a day or even 24hrs (like on a major highway). Get your operational and management plan right and you could make enough to be an owner/manager as opposed to an owner/manager/worker. Think Cracker Barrel. Look to do 1.5-2.0 million in annual sales. But you'll need more than BBQ skills to make it work.

Sounds kind of depressing I know. The truth is probably somewhere there in the middle. Everybody's situation is a little different, but I could take you to a meeting of restaurant owners and you'd hear a lot of the same.

Lastly, I think this guy has a really cool restaurant idea. I've eaten there several times on the way to Charleston. I wish his site had better pictures, but it's four old stores moved to his location and attached to each other. Country as can be and very well done. Only his location could be better.

http://nc-sc.com/dining/
I woke up.

About Dave's advertising budget. Read the book The Tippig Point, and then ask yourself how it applies to advertising. I think Dave nailed it perfectly. You need to reach an initial market for the eventual word of mouth to take off and be effective. The number neded to tip things will vary based on size of market and product being sold and to what age group you market, but it can be computed to some degree. Zero dollars for advertising is not likely to be the best answer, but spending just under the amount needed to reach the tipping point is wasteful as well. Study. Study.
Dave,

Building $26,000
Equipment $40,200
Inventory $6,300
Fees $3,550
Business COsts $3,600
Marketing $8,600
Utilities $2,400
Reserve $25,000

Total $ 115,650

Cost of owning your own BBQ Restaurant.... Priceless

Thanks for posting and congrats. There isn't any male, who after cooking Q, that doesn't ponder opening a restaurant. For those who DO want to go that route, your info (and all the others) is great info for them.

Thanks for putting the effort it to help!

Russ
quote:
Originally posted by SmokinOkie:
Dave,

Building $26,000
Equipment $40,200
Inventory $6,300
Fees $3,550
Business COsts $3,600
Marketing $8,600
Utilities $2,400
Reserve $25,000

Total $ 115,650

Cost of owning your own BBQ Restaurant.... Priceless

Thanks for posting and congrats. There isn't any male, who after cooking Q, that doesn't ponder opening a restaurant. For those who DO want to go that route, your info (and all the others) is great info for them.

Thanks for putting the effort it to help!

Russ


Thanks, Russ. I remember how it felt when I first got the notion to open up a place and had a lot of questions and didn't quite know where to start. Smiler
quote:
Originally posted by Papa Deuce:
Looks like I'm going to be laid off in July 2009. My wife has told me to follow my passion and finally open a BBQ Joint / Premium Spice Shop.

I want to focus on takeout but still have maybe 10 - 12 Tables. The spice part will require 800 - 900 SF of space.

That part aside, I have no idea how to figure out what to budget for a kitchen. I do think I will be using one of the larger Cookshack units.

If any of you have started a BBQ joint similar in size to what I am thinking, can you share what you learned while getting ready for opening your place?

BTW, I do realize prices may be drastically different based on locale. But at least I can start planning, and I hope to be ready by mid 2009..
Thanks.



papa, i have owned several bbq rest. over the years, i start them from scratch and run them for a few years 3-4. and sell them for a huge profit...all in colorado. i will start another in colo. next summer......i read what one person said about the total cost of opening a new rest. and i think it is way off base. i use the KISS method [keep it simple stupid]. DON'T get deep in debt! i can open a rest in a summer tourism town [colo.] with a budget of $25,000.00 and work it myself with one person for counter help and in 100 days of business, i can make 40-50k in PROFIT! also you must have a market thats not cramed with the same type of rest. my last rest i sold for 500% of what i had invested in that business...............so good luck and KISS!

Nice Post. According to me, If you have started a BBQ joint similar in size so you must be a plan & you have to analysis which place i started my BBQ Joint and how many cusions i have taken. You must go for a BBQ consumer & discuss for BBQ food. I hope they will help you definitely. 

According to me, you must be follow 5 steps before you open a small BBQ joint. The following steps are:

1. Location is important, but funding is critical.

2. The devil is in the details.

3. Choose hard work over taking on debt.

4. Start small and grow the business.

5. Focus on being part of the community

Ok.   3rules of business.   1. Location.   2. Location.  3. Location!!!!    4. Nickels and dimes and quarters add up to dollars!!    5. Renting is better than buying.   It’s all deductible.   Don’t get in huge debt!!!   6. Use social media.  Pics pics pics.  Of food and drink.  Talk on social media like you would talk to your best friend.   7.   I started my pun web page.  Chillininc.com.   Cost me $1500.  Worth every penny. Don’t pay 4K.   Get a student taking classes.   Look at it.   Tell me what u think.   8. We help every activity going on in our town.   Plus we do a benefit for a brittle bone foundation.   All is deducted as advertisement.    100%.    We raised $15k in one night.   But! I opened for Michael Martin Murphey.   Lol.   Was a huge night.  It’s in the web site.  9. Do not hire people to run ur business.   It’s ur reputation.  Work it!    I could go on.....   this works for us.    Lmk.   Any questions? Plz send them.   👍👍👍🍷

If you open your small BBQ joint so I recommend you to analyze the following steps before opening your BBQ joint:

1. Location is important, but funding is critical.

2. Begin little and develop the business.

3. Spotlight on being a piece of the network.

4. Pick diligent work over assuming an obligation.

5. The unseen details are the main problem.

In case you're on a financial plan and need to begin little, the Model NS 60 SWT is an awesome alternative at $3,550. The trailer flaunts sliding racks that can be hauled out of the trailer for cleaning or serving and a hotter box that can fill in as a cooker box too.

                                              Authorizing Costs and Insurance:

Every one of these expenses is variable and will rely upon where you live.

Grants: Every city, area, and the state will have diverse standards of the street so to represent your BBQ business. We won't get into a comprehensive rundown here, however, a sure thing is that you can hope to pay somewhere in the range of $200 – $500 yearly to get all the proper assessments for your BBQ business.

Business Entity: If you're simply beginning your business as a "bungalow sustenance" business can be a moderate method to an objective. More or less, the house nourishment laws were set up in the course of recent years to relax the restrictive sustenance laws that were a test for little nourishment organizations to survive. Their yearly wage deals points of confinement of $54,000 with this business element so as you develop you should consider changing the business to an LLC.

Protection: This is another cost that will change contingent upon your area. Seeing a pattern in this segment? Utilizing back of the napkin math you should spending plan around $1,000 – $3,000 every year for this.

I’m just giving sound advice that has worked for me over and over. The last 4 years we have owned a coffee shop.  We do breakfast and lunch.  Well.  We started to incorporate bbq.   It is so popular.  Guess I should have done it long ago.  This is the sixth place I have owned where I do bbq. That’s 28 years of success.   But? Everyone can have an opinion.  This is mine.   Have a great day!!!!

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