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Running a Restaurant/Figuring out financial projections


Hello Larry!

First off, numbers are not my friends :/

A little about me... my restaurant would be fine dining, and is based on the premise that we offer lots of unique alcoholic items. So a very elaborate martini menu, and lots of fun desserts. WE are currently looking at two spaces... one is approximately 4500 sq foot (an old bank so needs a good amount of TI) and 8000 sq foot (was a restaurant before) Is 8000 sq foot too big? Will i be drowning in overhead? and how do the staffing numbers differ from the smaller to larger space?

I am putting together financial projections for my business plan and I just dont understand how I can accurately determine how much staff I would need, and how much I would pay each one (aside from the waitress, host, bartenders... its mostly the kitchen staff I am clueless about). How much employee salary should I have 'set aside' prior to opening... 6 months worth a year??

Also what is the best way to determine what my general sales (%) would be for alcohol and food? and how much do those sales vary from monday to sat? What is the best way to accurately calculate what my initial startup purchases would be for food an ddisposables? I know liquor would range about 7-10k. If that is my initial cost for liquor, what would the number look like the second and third month?

Lastly, what would you recommend is the best way to figure out what a good starting capital number  should be? Would you say its important to have working capital and then an emergency fund on top of that?

Once I put together my final projections, would you mind taking a look at them and helping me to determine if they are pretty accurate.

Just so you know, the financial projections are for my own benefit, not to snag an investor. I want to make sure I am set up for success and can avoid running into problems because my initial calculations were so far off. I live in Cleveland Ohio, and the location would be downtown in the restuarant district sort to speak :)

thanks so much I really appreciate your time!

You wore me out just reading all your questions and confusion. Let's bring you back to earth.

Eighty percent (80%)of all new restaurants fail. It is good that you are trying to look at projections to reduce the chances of failure, but let me make a couple of guesses.

1) You have been in the food industry, but not in the capacity of a GM or owner.
2) You have always dreamed of owning a bar/restaurant and now see some opportunity to make that dream a reality.
3) You believe that if you serve "elaborate martini(s)", "fun desserts" along with good food, you will be a hit in the restaurant district.

Good luck - that is very close to the description of the 80% who failed!

In all of your words above, there was not one mention of how you were going to market your business. There was not a single paragraph about the number of people who may respond to your sales message. Who, why and how often will people visit your establishment? Without a marketing plan, no one will find you and all the unique ideas you think will keep people coming back.

Yet, without any idea of how many people you will serve on a daily basis, you want me to tell you:
a) how many square feet you need
b) how many employees you will need (and their cost)
c) hoe much your start-up costs are going to be
d) ongoing expenses
e) capital needed for safely opening your restaurant/bar.

Let me make this clear - I am willing to help you as much as I can, but you need to approach this from a standpoint of marketing reality. You will be competing with numerous successful Cleveland eateries in the downtown area. In my travels I have visited many of them. They became successful because they found a way to market themselves.

Think it through. Then let's start over with your people projections - then your revenue projections - then your expenditures - then your capital needs, etc., etc.

If this didn't scare you, write me back soon.  

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Larry Edger


Multi concept restaurant owner. Just finished fourth restaurant. Can answer questions on all aspects of running, owning and starting a restaurant, cafe or hospitality operation. Enjoy helping other restaurant owners. Most "consultants" have no idea what a restaurant operator needs to be successful. Let me know if I can assist you finding answers to your operating and marketing questions. Accomplished chef and menu development a particular talent for upscale casual restaurants.


Owner and operator of several multi-concept restaurants. Successful entrepreneur, started businesses from scratch on many occasions. Know the problems with planning and running a restaurant. Always independent operations and not the product of chain restaurants.

As an author of The Restaurant Ebook, A Guide to Keeping Your Dream Off the Chopping Block, I have helped hundreds of restaurateurs to market and run a better restaurant.For more information visit or

Attended Ohio State University and have gone through many extended classes relating to marketing and management. Written many courses and training manuals.
Currently building fourth restaurant and created a blog to keep track of daily activities. Readers can see the various steps from leasing to opening. Visit

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