How Much Overhead Spending Does a Restaurant Require?

The foodservice industry remains very much in demand due to high patronage from consumers worldwide. Therefore, launching a restaurant brand is a great idea for bringing value to patrons and making some good money while at it.

However, launching and running a restaurant comes at a high price. Your operational costs will constitute a significant aspect of your company’s budget. Also, it’s essential to determine your overhead expenses from your operational costs to build a better budget. Your “overhead” refers to all operational costs unrelated to labor and materials. Below is a comprehensive guide to help you determine how much overhead spending your restaurant requires.

Factor in advertising and marketing expenses.


Unless you’re running a franchise restaurant, spending money on marketing is undoubtedly essential as a restaurant business. In this age, you can work with a public relations or digital marketing agency to promote your brand across multiple channels to drive success. However, your specific marketing costs will depend on the scale of your efforts, concepts, competitor actions, among others.

Nevertheless, you should factor in all your promotional fees from digital marketing, print ads, and television ads to determine your overall advertising costs. Since marketing is typically expensive, you can delegate social media responsibilities to an employee to promote your restaurant at a lower cost. This way, you can engage your workers and turn them into effective brand ambassadors who’ll promote your company effectively. Leading employee engagement experts can help you with your employee engagement efforts.

Ambassify helps brands inform, communicate and build trust with their employees. The platform has individual use cases that any modern-day company can leverage to promote itself. Firstly, they can aid your employee advocacy efforts by ensuring that your employees feel part of your company’s bigger picture, making them feel included, trusted, and valued. This way, you create engaged employees who are more productive, happier, and less likely to leave your company. Their organization can also help you craft a strong employer brand, promoting your organization as a great place to work and increasing your chances of acquiring top talent. Also, the platform can help you create a solid customer advocacy program to promote your company through your loyal clientele.

Calculate all repair costs.

Repairs are essential to any restaurant’s operations, so yours must prominently feature when calculating your overhead expenses. Consequently, ensure that you include repairs from every aspect of your operations to arrive at a precise amount. Generally, restaurants’ standard repair costs include fixing storage buildings, vehicles, parking areas, and kitchen equipment. Repairing kitchen equipment when it breaks down can be pretty costly, so it’s always advisable to select reliable repairers who get you value for money on your repairs. Experienced appliance repair specialists such as Honolulu Appliance Repair will come in handy when seeking repairers in Oahu and Honolulu.

HonoluluApplianceRepair provides quick and efficient residential and commercial appliance repair services to homeowners and commercial kitchens in Honolulu and Oahu. Their skilled technicians can repair and maintain your ice makers, dishwashers, dryers, freezers, stoves, pizza ovens, washers, microwaves, HVAC systems, refrigerators, barbecues, and several other appliances. Additionally, Honolulu Appliance Repair can repair equipment from all the major appliance brands, including Whirlpool, Kenmore, GE, Frigidaire, Jenn Air, Viking, LG, Electrolux, Thermador, Samsung, and Maytag. Furthermore, they offer excellent customer service at reasonable prices and make appliance repair appointment scheduling easy and convenient.

Factor in utility costs and shop around for suppliers.

Utilities like water, electricity, internet and trash removal are essential to your restaurant’s proper functioning. Therefore, calculate all your monthly charges for natural gas and electricity, water, recycling, telephone, internet fees, among others. Utility costs can be expensive when totaled, so you can also explore great ways to lower your bills. For example, always investigate the utility situation before signing any rental agreement for your restaurant. This way, you avoid taking on the debt of previous owners who may have left without settling their bills. Additionally, you can invest in more quality and energy-efficient kitchen equipment to help you save significant cash on your electricity bill. Dependable restaurant suppliers such as The Restaurant Warehouse can handle these concerns.

The Restaurant Warehouse offers affordable and durable restaurant equipment for sale in Seattle to restaurants, commercial kitchens, and other businesses in the foodservice industry. You can purchase quality commercial cooking equipment like ice machines, sandwich prep tables, freezers, hot plates, grills, dishwashers, ice machines, freezers, and commercial ovens. Additionally, they offer restaurant equipment financing, so you can make affordable monthly payments as you use top-notch restaurant equipment. Furthermore, The Restaurant Warehouse’s prices are notably less than the average foodservice industry’s pricing because they sell directly via the internet. As such, there’s no need for salespeople and sales commissions that can inflate equipment prices. What’s more, they provide great customer service to patrons and are renowned for providing top-notch restaurant equipment to restaurant brands in the city of Seattle.

Carefully examine all your tax filing activities.

You can also examine your restaurant’s tax filing for the recent year to determine the depreciation recorded as business expenses. Some common depreciation categories on this form may include your vehicles purchased, large equipment, and restaurant building. Therefore, incorporate all these costs into your overhead figure to arrive at an accurate sum. When totaling these costs, you can always look for ways to save money on everyday restaurant expenses. Thankfully, there are numerous financial tools you can rely on to help you achieve this. For example, you can set a target and use a savings goal calculator to help you determine the time and amount you’ll need to put in monthly to realize your savings target. This way, you can reach your goals for a down payment, dream vacation, college, and other milestones.

Overhead costs are critical components of a restaurant’s operational budget that all managers must stay on top of. By factoring in the costs of advertising, marketing, repairs, utilities, equipment, staffing, and professional services, a restaurant is better positioned to have a clearer view of its expenses which enables efficient financial management. The above-listed points are some key insights into how to calculate your restaurant’s overhead expenses accurately.

Back To Top