Start a restaurant or café: from licences to the covers you need each day

A full restaurant is not yet a profitable one

Tomás is a chef and Lea has run the floor of a busy brasserie for years. They want to start a restaurant of their own: a 36-seat neighbourhood bistro, open for dinner five evenings a week. Their bank asks one question first: how many covers (guests served) per evening do you need, and how sure are you of getting them? Fair enough, because a restaurant can be full on Saturday and still lose money over the year.

Of the US accommodation and food services establishments opened in the year to March 2015, 58.5% were still operating after five years and 41.6% after ten (source: US Bureau of Labor Statistics, December 2025). The danger rarely lies in one bad Saturday, but in quiet weeknights, a slow first season and costs that keep running while the dining room is empty. The example below is in euro; the logic holds in any currency.

The restaurant market in figures

What the figures mean for a newcomer

The market is large and fragmented: in the EU, the average food and beverage business employs only a handful of people. Margins are thin. In the EU average, the operating result before depreciation fell from 12.0% of revenue in 2011 to 7.5% in 2020, while staff costs rose from 27.8% to 32.3% (source: Firmfocus, October 2026). The year 2020 was the first pandemic year and therefore an extreme point; even so, it shows how quickly a margin of this size can disappear. A new restaurant needs a concept, location and cost structure that work with the guests it can realistically attract.

How the costs of a restaurant split

Restaurant costs fall into three blocks: food and drink purchases, staff, and everything else, from rent and energy to repairs, card fees and depreciation on the kitchen. The EU average above shows staff alone taking almost a third of revenue.

Firmfocus rule of thumb for a first rough budget, not a measured average.

Two consequences follow. Pricing starts with the cost of each dish: the menu price excluding VAT is the ingredient cost divided by your target food cost share. And occupancy matters more than the price list, because staff, rent and the kitchen loan cost the same on a quiet Tuesday as on a busy Saturday.

Licences and rules for a restaurant or café

Food safety comes first everywhere: you register with the food authority and work with a food safety system based on HACCP (hazard analysis and critical control points: knowing where food can become unsafe and checking those points). Alcohol, terraces, music and late opening need separate, often local, permits.

• Zoning: check that a restaurant is allowed at the address before you sign anything.
• Building and fire safety: extraction, escape routes and accessibility often need approval.
• Lead time: ask how long each permit takes and plan the opening around the slowest one.

Rules change and differ by city; the step on business name and licences explains how to check them.

Financing: expect to bring your own money

Lenders see restaurants as high-risk: the fit-out is worth little if you close and fixed costs are high. Expect the bank to ask for a substantial share of own money, and ask in advance what share it requires and whether a subordinated loan from family counts. Such a loan ranks behind the bank if things go wrong, so some banks treat it almost as equity. Equipment leasing, microlenders and supplier finance can fill gaps; read the purchase obligations that come with supplier money. The financing plan shows how to combine them.

Take over or start new

Taking over gives you a working kitchen, guests and a track record the bank can check. You pay for goodwill, the equipment may be older than it looks, and licences are often personal, so you may still need your own. Starting new gives you your own concept, but a longer route through permits and a slower start. Before an offer, ask for several years of figures and read buying a business.

Worked example: how many covers a day does the bistro need?

Tomás and Lea open 240 evenings a year: five evenings a week for 48 weeks. The average guest spends €42 excluding VAT, of which €30 on food and €12 on drinks. Purchases cost €12 per cover and card fees and consumables €1, so each cover contributes €29 to the fixed costs.

Fictitious Firmfocus example. Amounts excluding VAT; shares and daily amounts rounded. Fixed costs: €150,000 + €48,000 + €18,000 + €20,000 + €30,000 + €6,000 = €272,000.

Fixed costs are €272,000 a year. Divided by €29 per cover, that is 9,380 covers a year, or 40 per evening, before the owners earn anything. Tomás and Lea need €72,000 together to live on and set aside tax, so the real target is €344,000 / €29 = 11,862 covers a year: 50 per evening. Their plan has no slack. Each cover per evening is worth €29 x 240 = €6,960 a year.

The weak point is the start. If the first three months, about 60 open evenings, bring 30 covers instead of 50, the contribution falls short by 20 x €29 x 60 = €34,800. The €40,000 buffer absorbs that, but not a permit delay on top, so they negotiate two rent-free months for the fit-out and open with a smaller menu.

Small or larger start

Pitfalls

• Planning on revenue instead of covers: build the forecast from covers per day and spend per cover, and test ten fewer.
• Signing before the permits: link the lease to the permits, or agree that rent starts when they are granted.
• Working for free: in a sole proprietorship your own work is not a staff cost. A plan that breaks even without your pay is a loss-making plan.
• No money for the slow start: keep working capital separate from the fit-out budget, as described in startup costs.

Compare other industries in Starting by industry or return to the overview Start a business.