Commercial Kitchen Costs You Need to Keep Track Of
Not all kitchens are created equal or come with the same price tag as another. Small business owners need to pay special attention to their budget and carefully allocate funds that will cover all of their needs when it comes to commercial kitchen costs.
Let’s take a look at what type of commercial kitchen equipment you’ll need, how much you can expect to spend, and different factors that can impact your total cost of ownership.
Types of Kitchen Equipment
The back of house (BOH) kitchen equipment is usually one of the less glamorous aspects of opening the restaurant of your dreams. However, with the potentially steep price tag, it’s not one you can afford to ignore. After all, how can a restaurant function properly and serve great food without having the right equipment and tools to get the job done?
Depending on a range of variables (which we’ll cover throughout this post), you can expect to spend anywhere from a few thousand dollars to outfit a restaurant kitchen to upwards of $100,000 or more.
The most common commercial kitchen equipment will fall under these categories:
- Storage – Bussing equipment, shelving units, drying racks, and food storage containers
- Refrigeration – Freezer, beverage dispenser, ice machine, and refrigerator
- Food Prep and Cooking – Oven, range, fryer, grill, mixers, and food processors
- Smallwares – cutting boards, knives, pans, pots, and cutlery
- Technology – point of sale (POS) systems, kitchen display system (KDS), and impact printers
Let’s take a look at some of the hardware you’ll need and how much you can expect to spend per item.
Commercial Cooking Equipment
Like the big-ticket appliances in your home, commercial machines will cut into a healthy chunk of your budget.
Note: Expect to spend costs are based on thorough internet research of new equipment that ranges from countertop models to freestanding equipment.
- Deep fryers
Expect to spend: $500 – $8,000
- Commercial griddles and flat top grills
Expect to spend: $2,100 – $5,000
- Commercial charbroilers
Expect to spend: $1,200 – $12,000
- Convection ovens
Expect to spend: $1,200 – $12,000
- Smoker ovens
Expect to spend: $4,000 – $10,000
- Pizza ovens
Expect to spend: $50 – $20,000
Besides appliances to cook with, you also have to budget the workspaces and tools you’ll need to prepare menu items properly.
Expect to spend: $100 – $5,000
- Prep tables (with sink)
Expect to spend: $450 – $2,500
- Refrigerated prep tables
Expect to spend: $1,000 – $9,000
Expect to spend: $6,000 – $25,000
- Drying racks
Expect to spend: $70 – $1,400
Food Storage and Holding Equipment
To keep food at its freshest and in compliance with local health codes, you’ll need the right equipment to keep prepared food hot and dry storage items fresh.
- Food holding cabinets (warming)
Expect to spend: $850 – $24,000
Expect to spend: $650 – $3,000
- Heat lamps for expeditor window
Expect to spend: $55 – $355
- Commercial shelving
Expect to spend: $85 – $600
- Commercial Refrigeration
As important as it is to keep food hot, it’s just as essential to keep refrigerated perishables cold and foodborne illnesses at bay.
- Walk-in coolers and freezers
Expect to spend: $6,000 – $15,000
- Reach-in coolers and freezers
Expect to spend: $1,100 – $26,000
- Prep refrigeration
Expect to spend: $1,000 – $9,000
- Ice machines
Expect to spend: $2,300 – $8,500
- Refrigerated display cases
Expect to spend: $1,100 – $15,000
Specialty Kitchen Equipment
While you’ll likely need most of the equipment we’ve mentioned up to this point, the necessity for this next group of items will be highly dependent on the type of fair you plan to serve.
- Espresso machines
Expect to spend: $1,200 – $20,000
- Soft-serve ice cream machines
Expect to spend: $1,600 – $21,000
- Pasta maker
Expect to spend: $35 – $22,000
- Small Ticket Items to Consider
Referred to as “smallwares” in the industry, these are the little things that can easily be overlooked, so make sure you account for them in your budget.
- Ticket holders
Expect to spend: $3 – $60.00
- Utility carts
Expect to spend: $60 – $400
- Chafing dishes
Expect to spend: $5 – $25
- Protective clothing (oven gloves, mitts, aprons)
Expect to spend: $3 – $50
- Smallware items needed for cooking and serving food (tableware, cutlery)
Expect to spend: $2 – $1,200
Factors That Impact Commercial Kitchen Costs
When it comes to outfitting your commercial cooking space, appliances and equipment are not the only factors that will affect your budget. You also have to think about the space itself.
Property Location and Square Footage
Whatever corner of the nation you decide to open a restaurant in will impact how much you pay for the physical space. A kitchen that is 800 square feet in New York City will cost significantly more than the same amount of space in Des Moines, Iowa.
Whether you rent, lease, or buy a piece of property, make sure you can afford the monthly payment for the facility.
Move-In Ready Vs. Renovation Space
Another thing that will factor into your commercial kitchen funding is the state of the space. While you may rent a building that was previously a restaurant, that doesn’t mean it’s move-in ready.
Your restaurant concept could be completely different from the last tenant. Therefore, you’ll have to do some remodeling to make it functional for your needs.
While some believe that the cost of running and maintaining a kitchen and its equipment is where most of the funds go, food costs that can quickly eat up a restaurant’s budget.
While industry standards dictate that your food cost should fall around 30-35 percent, many restaurants find themselves spending much more.
Why? Well, there are several reasons:
- Not having the right balance of mixing low-cost foods such as pasta with higher cost ingredients like seafood
- Not controlling portion sizes per serving
- Using restaurant funds to buy food for home
- Employees consuming food beyond their allocated shift meal
- Wasteful habits
For many restaurants, this is where the belt-tightening needs to happen. Make sure you are not only clear with your staff but are staying organized and adequately tracking inventory.
Legal Requirements and Inspections
When discussing the cost of commercial kitchens, one area that can go unnoticed is the legal requirements and inspections. Not only do these audits need to occur at startup, but also regularly throughout the life of the restaurant.
The most common fee in this category houses your costs for insurance, and the different permits needed to operate.
Restaurant Insurance Requirements
- Building insurance
- Inventory insurance – protects against food spoilage due to equipment failure
- Liability insurance – general, property, automobile, etc.
- Workers compensation
Required Licenses and Permits for Restaurants
- Business license/Employer ID number
- Foodservice license
- Sign permit
- Certificate of Occupancy
- Building/Employee health permits
Legal requirements and permits all vary depending on location, so don’t ever assume. Make sure you get all the information needed from your local officials in writing before moving forward.
Cost-Effective Alternatives for Your Commercial Kitchen
Once you’ve made your list of items, the cost of your commercial kitchen equipment alone may shock you. That’s why many businesses look for cost-effective alternatives to help them cut costs down a bit, especially if they are just starting up.
Second-hand equipment often gets a bad rap because it’s been used before. However, there are plenty of places to purchase, or even rent, second-hand commercial kitchen equipment that refurbished and is ready to be put to good use. The best part is second-hand equipment costs significantly less than brand new hardware.
Another way you can save some dough is through the use of trendy collective kitchens. Collective kitchens are community spaces that can be used for various initiatives, including soup kitchens, job training, and more.
These spaces are shared by the community for both preparing and serving food. In many of these collective kitchens, food budgets are shared by those who use the area, and the food may be brought to other locations for consumptions. Even better? Leftovers are often shared with food pantries, churches, and other community groups to help feed those in need.
Not quite ready for a brick and mortar set up? Then consider taking your show on the road with a food truck. A smaller space means lower commercial kitchen costs, smaller and fewer appliance needs, and lower employee costs. Also, it’s entirely possible you’ll spend less on licenses, permits, and insurance.
The Bottom Line
If you don’t account for all the different factors that can impact your commercial kitchen costs, staying within your budget may prove to be a difficult task. It’s best to start with your menu and work backward to only purchase exactly what you need.