What is the minimum amount required to start a restaurant business in Dubai?

Getting your dream restaurant business into the real world is a challenging project, but it can also be incredibly rewarding. The basic question will come to your mind is what is the minimum amount required to open my restaurant in Dubai?

There are lot of cost to consider in your budget including variables and the type and size of restaurant you want to open.

Here we will guide you through a particular type of restaurant as an example so that you can map and arrive at a basic cost for your type of restaurant and we are not going to discuss about creating a business plan.

We recommend you to follow through the step by step process so that you can avoid any last minute surprises.

The process is simple and as follows

• Commercial license for your restaurant

• Leasing of space

• Kitchen equipments

• Appointing a designer

• Restaurant layout

• Permits from authorities

• Fit out and decorations

• Furnitures

• Staffs

• Marketing and promotions

• Restaurant opening

Commercial license for your restaurant

Just google for business setup or approach any economic department branch in Dubai. They will assist you with getting all the procedures done at a nominal cost and you can obtain the commercial license for your business from Dubai economy and tourism department within 10 days.

The cost for obtaining commercial license will vary from AED 15000 to 25000 based on the type of activity you are going to do.

The next step is to take Food license from the food safety department and we will discuss about this in detail in the following steps.

If you are planning to open the restaurant in other emirates, you have to check with the respective authorities.

Leasing

Once your license is in the process head out to hunt for the space based on the type and size of restaurant you want to open.

Please check for the following points before finalising your restaurant location

because location is crucial to its success.

Here are few tips

• Do proper market research and understand the demography

• Choose the location where there is enough foot fall

• Size of the restaurant

• Access and parking

• Power availability in KW

• Extract duct location. How far?

• Location for LPG tank

• Separate entry exit for kitchen

• What are the amenities provided by the landlord?

• Space availability for outdoor seating

• Evaluate competitors

• What other criteria that drives customers to your restaurant

Normally for a 100 sq m shop in Dubai the annual rent varies from - 100k to 500k depending on the location. Keep the budget counted for 5% Security deposits to landlords, 5% commission to Real estate agents and other government fees in addition to the rent.

Kitchen equipments

The next step is to finalise the menu because the kitchen equipments will be selected based on what type of menu you are going to serve

Finalise all the kitchen equipments and layout with your chef and kitchen equipment supplier

Allocate 40% of the space for kitchen and storage

Decide on the flow of activities right from raw material receiving area, Cold storage, dry store, vegetable and meat, fish cleaning, hand wash, preparation area, cooking, dish washing area, grease trap, distribution, packing and delivery.

Designing proper flow will allow you to serve your customers quickly and you can save a ton of time.

Once the flow is decided, finalise the kitchen equipments based on the type and capacity. It is highly recommended to maximise the usage of LPG compared to electrical operated equipments.

Get the layout prepared from the professional kitchen equipments supplier with exact dimension of equipments not an approximate sizes that is to include power requirement for each equipment and heat dissipation values.

You have to keep the cost in mind for the kitchen hood, fresh air fan and exhaust equipments based on the type of menu you are cooking.

For example if you have charcoal tandoor in your kitchen equipments list consider the cost for hot wash continuous cold water mist kitchen hood, fire suppression system, treated fresh air supply, ESP / ecology unit and fire rated extract ducts. These are authority requirements.

The typical cost of kitchen equipments for 100 Sq m restaurant will be from AED 80000 to AED 300000 depending on the type of cooking.

Designer and fit out Contractor appointment

Appoint a restaurant designer who are well versed in all the details not only color, theme and furniture selection, but also having a sound knowledge about furniture layout, able to utilise the space wisely, understanding the kitchen requirements, electromechanical works, authority approvals and inspections. Because if any one area goes wrong, you will not be able to open the restaurant on time as planned.

If you need further assistance, we can help you with the full turnkey interior fit out services or part of services like consulting. click here to get in touch with us

Restaurant layout

When you are preparing the restaurant layout, ensure that the flow coordinate with each element. Please consider the following elements.

• The flow of utilities and information such as Order information, POS, electricity, water and exhaust.

• The flow of goods - Raw materials deliveries from vendors and supply deliveries

• The people flow - Your customers, vendors and staffs

The restaurant floor plan should have the space allocated for each operational areas such as Entry exit for incoming goods and food delivery, Kitchen, Indoor Dining, outdoor dining, Entry and waiting area for customers, POS counter, Rest rooms, and a back office if your restaurant is big.

While laying out the space, consider location of utilities like control panels of electromechanical services, interior decoration elements, zoning restrictions and landlord requirements if any.

Statutory Permits

Obtaining statutory permits are mandatory before starting your restaurant construction works even if it is a modification/ renovations or alterations.

Lets discuss about the restaurant located in Dubai based on the statutory requirements

An experienced designer or the decoration contractor will take care of the government regulations and requirements and they will incorporate in the drawings and layout. We advise you to go with an experienced contractors.

Once the layouts are prepared and finalised it is advised to stick to it till the end because if you modify the kitchen equipment layout and furniture layout till the last moment, it will be difficult for you to get the final completion certificate from the authorities.

For a restaurant in Dubai, the rules and regulation of one authority differ from the other. In simple words, the process, rules and flow may not be the same if your restaurant is situated in the main land and Dubai development authority.

The process is as follows for instance your restaurant falls under the control of Dubai Municipality.

Step 1 - To Obtain Food license from Food safety department.

Step 2 - To submit necessary drawings and getting approvals from Dubai Civil defence that includes LPG submission as well.

Step 3 - To submit necessary drawings to Dubai Municipality including mechanical ventilation drawings.

Step 4 - To submit necessary drawings to Dubai electricity and water authority incase you are the first tenant in that premises or requesting additional power load. If you are not the first tenant just paying deposits and name transfer is enough.

All the above submissions require final inspection done and getting the completion certificates from the respective authorities. Operating the restaurant without fit to occupy certificate will end up in paying penalties and closure also.

Normally the cost associated with the above coordination process are charged by the contractors separately and there will be a nominal government fees that has to be paid by the restaurant owner.

Fit out and Decorations

Once your contractor has obtained the fit out permit from the municipality, you are good to start the construction works.

The cost of fit out works will differ based on what type of decoration and finishes you choose.

You can keep a minimum budget of AED 150000 for 100 sq m restaurant and it can go upto AED 500000 as per your requirements.

Furnitures

the furniture selection is totally under your control.

You can have a standard table and chairs or banquet seating or a high end designer furnitures based on your requirements.

The minimum budget you can allocate for the starting range quality loose furnitures including cash cash counters, service counters etc are around AED 20000 for 100 Sq m size restaurant.

Staffs

Allocate some funds for the staffs recruitment, training, uniforms, accommodation rent, transport, and other protocol as per government regulations. Typically keep a budget around AED 150000 for 10 staffs. This is one time initial expenses and the staff visa renewal will be after 2 years.

You can approach any business set up offices and they can help you with the PRO services and the cost associated with it.

Marketing and promotion

You have to allocate a budget for business promotion expenses such as digital marketing, printing the menu, flyers, food delivery aggregators, advertisements, signages etc.

Typical minimum budget for the above AED 25000

Working capital

You know your business better so keep a runway for a minimum of 3 months operations that includes rentals, staff wages, utility expenses etc.

We will leave it to your own discretion to calculate the working capital cost.

Summary

The Rough estimate is calculated for a 100 Sq m standard Indian type of cooking restaurant. This budget is at a minimum consideration for indicative purpose only and it is variable as per the needs. We recommend you to do your own research based on your requirements.

If you need further assistance, we can help you with the design drawings, authority approvals and complete turnkey interior fit out services for your restaurant. Click here to get in touch with us.

contact@spacedecointeriors.com

or Call and ask for Siva at 058 5761379 for free advise.

DISCLAIMER: This content is provided for informational purposes only and is not intended as legal, accounting, tax, HR, or any other professional advice. You are responsible for your own compliance with laws and regulations. You should contact your subject matter expertise or other relevant advisor for advice specific to your circumstances.