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

Commercial Workspaces

Besides appliances to cook with, you also have to budget the workspaces and tools you’ll need to prepare menu items properly.

• Worktables
  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
• Dishwashers
  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
• Steamtable
  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.

Food Costs

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

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.

Collective Kitchen

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.

Food Trucks

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.