How Much Does It Cost to Open a PHO Restaurant?

Do you want to start a PHO restaurant and you need a cost breakdown? If YES, here are 13 factors that affect the cost of opening a PHO restaurant.

Aside from Chinese and Mexican restaurants, another culture niche restaurant that is emerging in the United States of America is the PHO Restaurant. There are quite a number of PHO restaurants in the United States of America, and you can start yours if you are interested in the business.

If you are a Vietnamese living in the United States and you are looking towards leveraging on the vast population of Vietnamese descent in the US to generate revenue, then one of your best options is to start a PHO Restaurant.

The truth is that, if you can successfully start a PHO restaurant in the United States, your clients aren’t going to be just Vietnamese but every other person within your location who loves exploring delicacies. The PHO Restaurant industry is made up of restaurants that prepare and serve Phở, pronounced “fuh,”.

Pho is a Vietnamese soup that is normally made with a bone-beef broth, banh pho noodles, and thinly sliced beef, that’s often served with bean sprouts and other fresh herbs on the side.

Not to be confused with Japanese ramen which is usually made with wheat noodles, pho is made with rice noodles. Food can be prepared to either be eaten on the premises at restaurant locations or for take-out. The PHO Restaurants industry is a profitable industry and is open for any aspiring entrepreneur (not just Vietnamese) to come in and establish his or her business.

The Estimated Cost of Opening a PHO Restaurant

When it comes to starting a PHO restaurant, the major areas that you should look towards spending the bulk of your cash are in renting or leasing a standard facility, equipping the restaurant facility, and purchasing all the needed utensils, wares, and supplies.

You also need to pay your employees and utility bills. These are the key areas where you will spend your startup capital;

1. The total fee for registering a business in the United States of America – $750.
2. Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
3. Marketing promotion expenses for the grand opening of the PHO restaurant in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
4. The total cost for hiring a business consultant including writing a business plan – $2,500.
5. The total cost for the purchase of insurance (general liability, workers’ compensation and property-casualty) coverage at a total premium – $2,400.
6. The cost for renting or leasing a facility that will be converted into the PHO restaurant and that can accommodate the number of customers that will be accommodated per time (Reconstruction of the restaurant facility inclusive) will cost – $300,000.
7. Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
8. The cost for insurance (general liability, workers’ compensation and property-casualty) coverage at a total premium – $2,400.
9. The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of $105,600.
10. The cost for construction of a standard PHO restaurant and kitchen – $100,000.
11. Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
12. Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
13. The cost for start-up inventory (cooking ingredients, alcoholic drinks, soft drinks, beverages, coffee, and serving wares et al) – $80,000
14. Storage hardware (bins, rack, shelves, food case) – $3,720
15. The cost for counter area equipment (countertop, sink, ice machine, etc.) – $9,500
16. The cost for store equipment (cash register, security, ventilation, signage) – $13,750
17. The cost of purchase of delivery vans – $50,000
18. The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound systems, tables and chairs et al) – $4,000.
19. The cost of launching a website – $600
20. The cost for our opening party – $10,000
21. Miscellaneous – $10,000

From the rough estimate above, you would need a minimum of six hundred and eighty – seven thousand, seven hundred and eighty USD ($687,380) to establish a medium–scale but standard PHO restaurant business in the United States of America. Please note that this amount includes the salaries of all the staff for the first three months of operation.

Please note that this is a rough estimate and we usually advise our readers to directly contact wholesalers and suppliers of the types of furniture and utensils they want to have in their restaurant in order to get the real-time prices of these items.

The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.

13 Major Factors That Will Influence the Cost Of Opening A PHO Restaurant

1. The Type of PHO Restaurant

A major factor that will determine the overall cost of opening a PHO restaurant in the United States of America is the type of PHO restaurant the owner of the business wants to start. There are different types of restaurants based on the services they offer and they are;

• Fast-casual
• Casual Dining
• Premium Casual
• Family style
• Fine dining.

Please note that these different types of restaurant styles come with different cost implications when starting the business.

2. The Choice of Location

Another major factor that will determine the cost of opening a PHO restaurant in the United States of America is the location. In business, location is a key part of what determines the success of the business. As a matter of fact, there are business consultants cum realtors who are specialized in helping people choose an ideal location for their type of business.

Renting or leasing a restaurant facility in a location that is off the city center or off a residential estate will be less expensive when compared to renting or leasing a facility in a well–populated and growing residential estate; a location in a metropolitan city with the right demographic composition of people who can afford to patronize your restaurant.

3. The Required Licenses and Permits

In the United States of America, you cannot open a PHO restaurant without first applying for the mandatory license and permits. Of course, you would need an accreditation certificate, building license, zonal permits, and signage permits amongst others.

As expected, these license and permits cost money and it will influence the overall cost of opening a PHO restaurant in the United States of America.

Please note that you must pass different inspections before you can be issued your permits and this will also cost you money. In order to get the overall cost of licensing and permits associated with opening a new PHO restaurant in the United States, we will advise that you reach out to your city government.

4. The Type of Facility

The type of facility you want to run your PHO restaurant business from is also a major factor that will determine the overall cost of opening a PHO restaurant business in the United States of America. As regards the facility, you have the option of renting, leasing or constructing your own PHO restaurant from the scratch.

With renting and leasing a facility, you might just have to spend extra to modify the restaurant facility to fit into what you have in mind, but there is a limit to how far you can go and it will be dependent on what the landlord of the facility wants.

If you want to construct your PHO restaurant from the scratch, you need to buy the land or property, construct and equip the facility to fit into what you have in mind. With that, you will agree that you are going to spend way more when compared to people that rent or lease a restaurant facility.

5. The Number of Customers You Want to Admit

Another very important factor that determines the cost of opening a PHO restaurant in the United States of America is the number of customers you intend to admit per time. No doubt, there are standard PHO restaurants that can accommodate over 50 customers per time and there are others that can only accommodate less than 20 customers per time.

The more the number of customers a PHO restaurant can accommodate, the more money you are expected to spend to set up and run the restaurant.

6. The Cost of Hiring and Paying a Business Consultant and Attorney

If you want to get your business started on the right foundation, it will be a wise decision to hire the services of a competent business consultant and perhaps an attorney.

A business consultant will help with drafting a workable business plan document, a marketing plan and strategy, a comprehensive SWOT analysis, and other advisory services that will help you with opening the business. So also, an attorney will help you with registering the business, drafting contract documents, and offering you all the legal expertise that will help you start the business on the right foundation.

Of course, you will agree that these services will cost you money and it will indeed influence the overall cost of opening a PHO restaurant in the United States of America.

7. The Cost for Branding, Promotion, and Marketing of the PHO Restaurant

The cost of branding, promoting, and marketing the PHO restaurant is yet another key factor that will determine the overall cost of opening a PHO restaurant in the United States of America. Trust me, if you need massive results as it relates to competing and winning a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion, and marketing of your new PHO restaurant.

As a matter of fact, it is not cheap to come by an expert in branding, promotion, and marketing that will help you compete with brands that are already determining the market direction of the ethnic restaurant industry in your city. So, if you add the cost of paying a branding and marketing expert, it will surely increase the cost of opening your PHO restaurant.

8. The Cost for Furnishing and Equipping the Restaurant

Another very important factor that will determine the cost of opening a PHO restaurant is the cost of furnishing and equipping the restaurant. Before you can open a PHO restaurant, you should budget and buy dining chairs and tables, a fridge, deep freezer, cooker and serving wares ad utensils, flat-screen TVs, sound system, DVD players,

Satellite dish and decoder, drawers and cabinets, telephones, filing cabinets, office equipment (cash register, security and fire alarm and protection gadgets, CCTV, ventilation, signage), amongst others. All these will cost money and it will influence the overall cost of opening a PHO restaurant in the United States of America.

9. The Cost for Insurance

The cost of insurance is yet another important factor that will determine the overall cost of opening a PHO restaurant in the United States of America. Interestingly, in the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.

Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your own PHO restaurant business.

10. The Cost for Registering the Business

The cost of registering a PHO restaurant business is yet another cost that will influence the overall cost of opening a PHO restaurant in the United States of America. Although the cost of registering a business is affordable, it will no doubt add to the overall cost of opening a PHO restaurant in the United States of America.

11. Cost of Recruiting and Training Your Staff

The fact that you are opening your PHO restaurant as a new business means that you are expected to recruit and train your staff.

The training will help you sell the corporate culture of your organization to the new employees. As expected, it will cost you money to hire expert trainers that will help you train and bring your new hires up to speed and that will add to the overall cost of opening a PHO restaurant.

12. The Cost for the Purchase and Customizing of Uniforms

Another factor that will determine the overall cost of opening a PHO restaurant business in the United States is the cost of the purchase and customizing of uniforms. As expected, your waiters and waitresses, bartenders, kitchen staff, chefs, and of course security personnel have different uniforms and they are expected to put on these uniforms when on duty.

All these uniforms will cost you money which is why it must be part of your budget if you are looking towards opening a PHO restaurant in the United States of America.

13. The Cost for Grand Opening of the PHO Restaurant

In recent times, no PHO restaurant opens its door for business without first organizing an opening party to officially launch the business. This means that the cost of the grand opening will determine the overall cost of opening a PHO restaurant business in the United States of America.

You can choose to do a soft opening if you are operating on a low budget or you can choose to go for a grand opening party. The bottom line is that it is a cost that must be part of your budget and this cost will influence the overall cost of opening the PHO restaurant in the United States of America.

In Conclusion,

Please note that there are other factors not listed above that will surely influence the overall cost of opening your PHO restaurant which is why we will advise that you work with a result-driven business consultant in your city to give you the needed guide and info as it relates to the unique factors in your location.