The restaurant business as an extremely competitive industry, with new establishments opening and closing all the time. Restaurateurs must compete with many different dining options, from large franchises, to smaller, family-owned restaurants, who are all often surrounded by convenience stores, food trucks, and carts. A savvy entrepreneur can compete in this space with a combination of efficiency and effective targeting to a specific customer base. The type of restaurant envisioned in this scenario is a small restaurant that accommodates workers during the week, especially for lunch.

In Baltimore, restaurants are heavily regulated, where several licenses and permits must be acquired before doing business. The location must be zoned for restaurant use, and the facility itself must pass inspections by the fire marshal, building inspector, and the health department, both before and after opening for business. The biggest expense associated with these licenses and permits is meeting and maintaining the standards required to operate as a business, which may not be factored as monthly operational costs. Please visit the Department of Labor, Licensing and Regulation for requirements for your business at

The tables below depict the common issues and costs associated with operating a restaurant.


Political Labor laws – ensuring that staff is eligible to work in the US. Maintaining a safe work environment and compensating legally
Economic Disposable income of customers for eating out
Location of brick and mortar location that is accessible, especially for lunch
Commodity prices
Social Trends in restaurant style, such as indoor versus outdoor
Competition from food trucks, especially for lunch
Methods of compensating sales staff – salary versus commission
Technological Record keeping, including staff scheduling and inventory management – software and hardware
Handling money and processing payments
Advertising online and using social media
Environmental Waste disposal
Sourcing, dependent on products (imports, lead, etc.)
Legal Zoning restrictions
Building permit
Use & Occupancy permit, including inspection by fire marshal, building inspector, health department
Water Discharge Permit (sewage)
Critical Success Factors Brick and mortar location that is accessible to target market
Gaining and maintaining all appropriate licenses and permits
Major Activities Associated Costs Cost Driver
Selling goods Wholesale prices for products Number of units of products ordered
Ordering and managing inventory Staff time Volume of products ordered; number of staff members per hour


Projected Expenses
Employee Costs including benefits Year One Cost per month
Owner  $          3,500
Book Keeper – Outsourced  $              800
Legal – Outsourced  $              800
Tech Support – Outsourced  $              250
Staff (2 cooks, 2 register)  $          8,000
Wages Subtotal  $        13,350
Taxes, Fees  $          2,003
Subtotal  $        15,353
Food & Beverage  $          3,000
Cleaning Supplies  $              100
Napkins/Paper Towels/Straws  $              100
Subtotal  $          3,200
Facility Expense (rent)  $          1,700
Electric  $              300
Water  $              125
Internet/Telephone  $              100
Office supplies  $                50
Property Insurance  $              208
Maintenance  $              500
Computers/Hardware  $              100
Subtotal  $          3,083
Marketing Costs
Web site hosting and advertising  $              200
Web site updates  $              100
Business Cards, Pens, Swag  $                50
Subtotal  $              350
Furniture and decorations  $              3,300
Subtotal  $          3,300
Projected Monthly Costs   $        25,286