Commercial Kitchen Cost Guide: How Much Does it Cost to Set Up?

Are you thinking of starting your own restaurant or coffee shop? Then, you're probably aware that one of the most significant expenses you'll face is setting up your commercial kitchen.

Yes, that's right - a commercial kitchen is the beating heart of any hospitality business. But don't worry. We've got you covered! In this guide we'll dive deep into the costs associated with setting up a commercial kitchen. We'll explore everything from the cost of kitchen equipment to building permits and licences.

So, whether you're a seasoned restaurateur or a first-time entrepreneur, buckle up and get ready to learn all about commercial kitchen and restaurant startup costs!

What is a commercial kitchen?

So, what are commercial kitchens? Well, think of it as the laboratory of your restaurant or coffee shop. It's where all the culinary magic happens! A commercial kitchen is a space that is specifically designed and equipped to handle the demands of a professional kitchen. It's not your average kitchen - you won't find any cute little herb gardens or cosy breakfast nooks here!

In a commercial kitchen, you'll find all the heavy-duty kitchen equipment you need to cook up a storm - from industrial ovens and grills to walk-in freezers and refrigerators. It's where chefs and cooks spend most of their time chopping, sautéing, baking, and grilling to perfection.

Now, let's talk about some examples of commercial kitchens. Have you ever watched one of those cooking competition shows? You know the ones where the chefs are running around frantically, trying to cook up a storm in a race against the clock? Well, those shows are a great example of commercial kitchens in action!

So, there you have it - a commercial kitchen is the powerhouse behind any successful restaurant or coffee shop. And now that you know what it is, let's dive into the costs associated with setting one up!

How much does a commercial kitchen cost?

The cost of building a commercial kitchen can vary greatly depending on a number of factors. Typically, you can expect to spend anywhere from £11,000 through to £75,000+ to build smaller commercial kitchens and anywhere from 190,000 through to £400,000 for larger commercial kitchens [1].

Factors that affect the cost of a commercial kitchen

Setting up a commercial kitchen is no small feat, and there are many factors that can impact the total cost. Here are some major factors that you should consider when estimating commercial kitchen costs:

Location

Where you set up your commercial kitchen can have a big impact on the costs. For example, if you're planning to open up in New York City, the rent and real estate prices can be much higher compared to a smaller town. Plus, you'll also need to factor in the cost of utilities like electricity, gas, and water, which can vary depending on where you're located. 

Another thing to keep in mind is that some cities and municipalities may require additional permits and fees for commercial kitchens. So, it's important to do your research and figure out what regulations and costs you'll need to account for before you start building your kitchen.

Size of the kitchen

The size of your commercial kitchen is another major cost consideration. The larger the kitchen, the more expensive it will be to equip and maintain. However, it's essential to strike the right balance between having enough space to prepare and cook food efficiently and not having too much unused space. The cost per square foot of commercial kitchen space can vary widely depending on the location.

Kitchen design and layout

Your commercial kitchen's design and layout can also have a significant impact on costs. A poorly designed kitchen can lead to inefficiencies and costly mistakes. You'll need to consider factors such as the placement of equipment, the flow of traffic, and the types of meals you plan to prepare. You can hire a kitchen designer to help you optimise your space and avoid costly mistakes.

Equipment and appliances

The cost of kitchen equipment and appliances can be a significant portion of the total cost of a commercial kitchen. You'll need to invest in high-quality, durable equipment that can withstand heavy use.

The cost of equipping a restaurant with new equipment can vary among different establishments. However, if a restaurant wants to purchase new equipment from trustworthy dealers, it should expect to pay somewhere between £25,000 – £40,000 [2].  

Labour and installation costs

Finally, labour and installation costs can add up quickly, especially if you're starting from scratch. If you're setting up a commercial kitchen in an existing space, you'll need to factor in the cost of any necessary renovations or upgrades. You'll also need to hire licensed contractors to handle any plumbing, electrical, or HVAC work.

So, as you can see, there are many factors that can impact the cost of a commercial kitchen. It's essential to do your research and estimate your costs carefully. Commercial kitchens carry major costs, and usually only businesses, such as restaurants, can afford to set one up from scratch.

Cost breakdown of setting up a commercial kitchen

Now that you know the factors that can impact the cost of setting up a commercial kitchen let's break down the costs in more detail.

Kitchen design and layout

As we mentioned earlier, the design and layout of your commercial kitchen are critical to its success. A well-designed kitchen will help your staff work efficiently, which can save you money in the long run.

A kitchen designer can help you with this - their cost is normally around 10% - 20% of your total project cost, and they tend to charge hourly. The average cost is between £770 – £4,600 [3].

Equipment and appliances

The cost of equipment and electric appliances can be one of the most significant expenses when setting up a commercial kitchen. As we mentioned earlier, high-quality commercial-grade equipment (like fryers, commercial dishwashers, ovens) can be costly, but it's essential for the success of your kitchen. 

You'll also need to budget for smaller equipment such as pots and pans, utensils, and dishware, as well as cleaning and safety items.

Labour and installation

The cost of labour and installation can vary widely depending on your location and the complexity of your project. You'll need to hire licensed contractors to handle any plumbing, electrical, or HVAC work.

Permits and fees

Depending on your location, you may need to obtain permits and pay fees before you can open your commercial kitchen. These can include following health and safety requirements with health permits, fire permits, and zoning permits.

Miscellaneous costs

Finally, don't forget to budget for miscellaneous costs, such as insurance, legal fees, and marketing expenses. These costs can add up quickly, but they're essential for the long-term success of your business.

So, there you have it - a breakdown of the costs associated with setting up a commercial kitchen. As you can see, it can be a significant investment, but with careful planning and budgeting, you can create a successful kitchen that will serve your business well.

Cost-saving tips for setting up a commercial kitchen

Setting up a commercial kitchen can be expensive, but there are ways to save money without sacrificing quality. Here are some cost-saving tips to help you stay within your budget:

1. Buy used equipment

Buying used restaurant equipment can be an excellent way to save money. Many restaurant owners upgrade their equipment regularly, which means you can often find high-quality equipment for a fraction of the actual cost. Just make sure to inspect any used equipment thoroughly before making a purchase.

2. Rent or lease equipment

If you're just starting out or only need certain equipment temporarily, consider renting or leasing instead of buying. This can be an excellent way to save money on equipment costs, especially for items that you won't be using every day.

3. Prioritise your equipment needs

Not all restaurant equipment is created equal. Determine which items are essential for your kitchen and prioritise those purchases. For example, a small commercial oven may be more cost-effective than a large, expensive model. Don’t feel pressured to buy all the most expensive items - you can buy the essentials now, and then expand as your business grows.

4. Buy in bulk

When purchasing small equipment items such as dishware, pots, and pans, buying in bulk can often save you money in the long run. Consider teaming up with other restaurant owners to make large purchases together and take advantage of bulk discounts.

5. Choose energy-efficient equipment

Energy-efficient equipment may have a higher upfront cost, but it can save you money on utility bills in the long run. Look for equipment with an Energy Star rating to ensure maximum efficiency.

6. Introduce technology

Investing in hospitality POS (Point of Sale) systems and KDS (Kitchen Display Systems) can streamline your kitchen operations, reduce errors, and save you time and money in the long run. These systems can help you manage inventory, order tracking, and reporting, allowing you to optimise your kitchen's efficiency and reduce waste. Technology like this, which serves several purposes at once, is a great way to save money.

7. Negotiate with vendors

Don't be afraid to negotiate with vendors for lower prices or better deals. Many vendors may be willing to work with you, especially if you're purchasing large quantities of equipment or supplies.

By implementing these cost-saving tips, you can significantly reduce the amount of money you need to spend when setting up your commercial kitchen. Remember, a little creativity can go a long way in saving you money without sacrificing quality.

How can Epos Now Capital help?

Epos Now Capital is a new financing solution that provides SMEs with up to $1M in funding to drive business growth, marketing investment, and cash flow management.

With no hidden fees and no fixed monthly payments, you'll have instant access to business cash advances, repaid only when your customers pay you.

To check your eligibility, you can fill out a simple online form. Once approved, you'll receive the funds to invest in your business, with payments taken on a weekly basis as an agreed percentage of your card transactions.

This flexible approach to financing can be a great option for small businesses looking to set up their commercial kitchen without worrying about monthly payments that eat into their cash flow.

For more information on running a successful kitchen, check out our helpful guides below:

• Kitchen management guide
• How to start a Ghost kitchen
• Cloud kitchen business model
• Kitchen staff duties and responsibilities
• Restaurant's kitchen equipment and essentials
• Epos Online Ordering
• Lease kitchen space