Planning a restaurant renovation is like building a house of cards – one miscalculation can topple your entire financial foundation. Entrepreneurs consistently underestimate these costs, leaving them cash-strapped or facing unrealistic payback expectations. You need a detailed roadmap to map out every cost item and build a bulletproof budget.
The main categories of renovation costs
Renovation costs extend far beyond kitchen equipment. A thorough cost calculation covers these essential categories:
- Structural modifications: walls, floors, ceilings, electrical, plumbing
- Kitchen equipment: ovens, cooling, ventilation, work surfaces
- Furniture and furnishings: tables, chairs, bar, decoration
- Permits and consulting: architect, permits, inspections
- Unforeseen costs: always reserve an extra 10-20%
Structural costs per square meter
Structural costs fluctuate dramatically based on location and property condition. Here are reliable reference prices:
💡 Example construction costs (per m²):
- Light renovation: €300-500 per m²
- Complete renovation: €800-1,200 per m²
- Luxury furnishing: €1,500-2,500 per m²
For a restaurant of 120m² (80m² dining area + 40m² kitchen), a complete renovation costs €96,000 to €144,000.
Budgeting kitchen equipment
The kitchen typically devours the biggest chunk of your budget. From tracking this across dozens of restaurants, these reference prices hold true for a complete kitchen setup:
- Basic kitchen (40m²): €25,000-40,000
- Professional kitchen: €50,000-80,000
- High-end kitchen: €100,000+
⚠️ Note:
Used equipment might look like a bargain, but it often leads to higher maintenance costs and more downtime. Budget 30-50% of new price for quality used equipment.
Furniture and dining area furnishings
For your dining area, expect to invest €200-600 per seat, depending on your target market:
💡 Example dining area furnishings (60 seats):
- Tables and chairs: €8,000-15,000
- Bar and bar stools: €3,000-8,000
- Lighting: €2,000-6,000
- Decoration and styling: €2,000-10,000
Total dining area furnishings: €15,000-39,000
Hidden costs that slip through the cracks
These expenses are consistently underestimated but absolutely mandatory:
- Permits: €2,000-5,000 (hospitality, construction, environmental)
- Architect/designer: 8-12% of construction sum
- Inspections and certification: €1,500-3,000
- Gas/water/electrical connections: €3,000-8,000
- Waste and cleanup costs: €2,000-5,000
Total example: restaurant 120m², 60 seats
💡 Realistic total budget:
- Structural renovation: €100,000
- Kitchen equipment: €60,000
- Dining area furnishings: €25,000
- Permits and consulting: €12,000
- Unforeseen (15%): €30,000
Total investment: €227,000
With an average net margin of 8%, you'll need to generate €2.8 million in revenue to break even.
Financing and payback period
Most restaurant owners finance renovations through a mix of personal funds and loans. Budget using these industry standards:
- Own contribution: minimum 30-40% of total investment
- Loan: maximum 60-70%, depreciation over 7-10 years
- Payback period: with healthy margins 3-5 years
⚠️ Note:
Many entrepreneurs calculate construction costs but forget interest and depreciation in their operating budget. This adds €2,000-4,000 per month in ongoing costs.
How do you calculate renovation costs? (step by step)
Measure your space and determine the concept
Measure all spaces carefully (dining area, kitchen, restrooms, storage). Determine how many seats you want and what type of kitchen you need. This determines all other costs.
Request quotes per category
Get at least 3 quotes for construction, kitchen, furniture, and permits. Compare not only the price but also what exactly is included.
Add up all costs and reserve 15% extra
Sum all quotes and add 15% unforeseen costs. This gives you your total investment amount. Then calculate how much revenue you need to break even.
✨ Pro tip
Create a detailed 18-month cash flow projection that includes both renovation costs and operating expenses during your first year. Most restaurants underestimate how long it takes to reach profitable revenue levels after opening.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Can I deduct renovation costs from taxes?
Yes, renovation costs are investments you can depreciate over multiple years. Structural modifications typically depreciate over 10 years, equipment over 5-7 years. Your accountant will provide the exact depreciation schedule for your situation.
What if the renovation costs more than budgeted?
Cost overruns of 10-20% are standard in renovations. Always maintain a buffer of at least 15%. If costs spiral much higher, reconsider some items or secure additional financing before proceeding.
How much revenue do I need to break even on renovation costs?
With an 8% net margin, you need approximately 12.5x your investment in revenue to break even. A €200,000 investment requires €2.5 million in revenue to reach your break-even point.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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