How to open a restaurant in the UK: costs, licences and a business plan (2026)
Updated 19 October 2026
Short answer: to open a restaurant in the UK, prove your concept and location, write a business plan that shows how many covers you need to break even, and budget roughly £50,000–£150,000 to take over a fitted restaurant or £150,000–£500,000+ to fit out an empty unit (typical estimate). Check the unit's planning use before you sign, register with your council at least 28 days before opening, and get a premises licence if you'll sell alcohol or hot food after 11pm.
This guide covers each step for 2026: a £ cost table, a worked monthly P&L, a SWOT analysis you can copy, the licences in each UK nation, and how to launch. It's written for independent, first-time restaurant owners.
Not legal or financial advice. Based on gov.uk, FSA, HMRC and licensing guidance checked on 11 October 2026. Planning and licensing are decided locally, so speak to your council and, for a lease or alcohol licence, a solicitor.
How much does it cost to open a restaurant in the UK?
The premises drive the budget. Taking over a restaurant that's already fitted (a "second-hand" site with extraction, kitchen and toilets) costs far less than converting a shell. These figures are typical estimates for a 40–60 cover independent restaurant outside central London, not quotes.
| Cost | Take over a fitted restaurant | Fit out an empty unit |
|---|---|---|
| Lease premium (key money) | £0–£60,000 | Usually £0 |
| Rent deposit (3–6 months) | £8,000–£30,000 | £8,000–£30,000 |
| Legal and professional fees (lease, licence, accounts) | £3,000–£10,000 | £5,000–£15,000 |
| Building work, extraction, plumbing, electrics | £5,000–£30,000 | £80,000–£300,000+ |
| Kitchen equipment | £5,000–£25,000 | £30,000–£80,000 |
| Furniture, lighting, décor | £5,000–£25,000 | £20,000–£60,000 |
| EPOS, card readers, booking and ordering tools | £0–£5,000 | £0–£5,000 |
| Signage (and advertisement consent) | £1,000–£5,000 | £2,000–£8,000 |
| Opening stock, crockery, linen, smallwares | £4,000–£10,000 | £6,000–£15,000 |
| Pre-opening wages and training | £3,000–£12,000 | £5,000–£15,000 |
| Launch marketing | £1,000–£5,000 | £1,000–£5,000 |
| Working capital (3 months of costs) | £20,000–£60,000 | £20,000–£60,000 |
| Rough total | £50,000–£150,000 (often more with a premium) | £150,000–£500,000+ |
Typical estimates for 2026. Central London rents, premiums and building costs can be double these.
Two ways to spend less: lease or buy second-hand kitchen equipment, and look for a site that was a restaurant until recently. Never cut working capital. Most restaurants take months to build a regular trade.
Step 1: Choose your concept and test it
Write your concept in one sentence: who it's for, what you serve, and why people will come back. For example: "a 45-cover neighbourhood bistro serving seasonal plates at £15–£22, busy with locals from Wednesday to Sunday."
Then test it cheaply before you sign a 10-year lease:
- Run a supper club or pop-up for a few nights. Our pop-up restaurant guide shows how.
- Cook the menu for friends who'll be honest about the price.
- Count footfall at lunch and dinner, on weekdays and weekends.
- List every restaurant within a 10-minute walk, what they charge, and how full they are on a Tuesday.
Thinking smaller? A café or takeaway costs less to open. See how to open a café and how to open a takeaway.
Step 2: Write your restaurant business plan
Banks, landlords and Start Up Loans will ask for a business plan. More importantly, it shows you whether the idea works on paper. Cover these sections:
- Summary and mission statement. What you are, in two or three lines.
- Concept and target customers. Who comes, when and how often.
- Market and competitors. Prices, gaps and your SWOT analysis (below).
- Menu and pricing. Dishes, prices and target GP.
- Premises. Location, covers, lease terms, planning status.
- Team. Roles, hours and wage costs.
- Marketing. Launch plan, reviews, regulars, direct orders.
- Financial forecast. Monthly sales and costs for year one, cash flow, and break-even.
- Funding. How much you need and where it comes from.
Worked example: a 50-cover restaurant's monthly P&L
All figures are a typical estimate for illustration. The restaurant opens six days a week.
| Line | Monthly |
|---|---|
| Covers per day (lunch and dinner) | 60 |
| Average spend per cover, inc VAT | £32.00 |
| Sales inc VAT (60 × £32 × 26 days) | £49,920 |
| Sales ex VAT (eat-in is always 20%) | £41,600 |
| Food and drink cost at 30% | £12,480 |
| Gross profit (70% GP) | £29,120 |
| Wages, NI and pensions (about 32% of sales) | £13,300 |
| Rent | £5,000 |
| Business rates (after any relief) | £800 |
| Energy and water | £2,200 |
| Card fees, insurance, software, repairs, laundry, marketing, waste | £3,500 |
| Total overheads | £24,800 |
| Profit before tax | £4,320 (about 10% of sales) |
Break-even covers: each cover brings in £18.67 of gross profit (£32 ÷ 1.2 × 70%). £24,800 ÷ £18.67 = about 1,330 covers a month, or about 51 covers a day. At 60 a day you're ahead, but a quiet January could wipe that out. Run your own numbers with our break-even calculator, and price each dish with the GP calculator.
Restaurant SWOT analysis: an example
A SWOT analysis lists your Strengths, Weaknesses, Opportunities and Threats. Keep it honest and specific. Here's an example for a fictional neighbourhood bistro:
| Strengths | Weaknesses |
|---|---|
| Chef-owner with 10 years' experience | No track record as a business owner |
| Fitted site, so low fit-out cost | Small kitchen limits the menu |
| Short seasonal menu keeps food waste low | Little parking nearby |
| Opportunities | Threats |
|---|---|
| No mid-priced restaurant within a 10-minute walk | Rising energy, food and wage costs |
| New flats nearby with young professionals | Two chains opening in the town centre |
| Lunchtime trade from offices; takeaway and pre-orders | Staff shortages for experienced chefs |
Use it to make decisions. For example, a weakness like "no parking" might push you to grow collection orders and local delivery.
Restaurant mission statement: a simple template
"We serve [type of food] to [who] in [area], made with [what makes you different], in a place that feels [how you want guests to feel]."
Example: "We serve seasonal British plates to our neighbours in [town], using produce from farms within 30 miles, in a dining room that feels like a friend's kitchen."
Step 3: Fund it
- Savings are the cheapest money, and lenders like to see you invest some.
- Start Up Loans: a government-backed personal loan of up to £25,000 at a fixed 7.5% a year, repaid over 1–5 years, with 12 months of free mentoring. It's for new businesses and those trading for less than 5 years.
- Bank loans, asset finance and equipment leasing for the kitchen.
- Investors or a business partner: agree shares, roles and an exit plan in writing.
Step 4: Find premises and check planning before you sign
This is where many restaurant plans go wrong. Check these before you sign heads of terms:
- England: restaurants and cafés are Class E(b). A unit already in Class E (for example, a shop) can usually become a restaurant without planning permission. A hot food takeaway is "sui generis", so if most of your trade will be takeaway, ask the council how they'll treat it.
- Wales: restaurants, cafés and takeaways are Class A3. Changing from a shop usually needs permission.
- Scotland: restaurants are Class 3 (food and drink) and shops are Class 1A. Since 31 March 2023 many Class 1A shops can change to Class 3 without planning permission, with exceptions (for example, close to homes). Hot food takeaways are sui generis.
- Northern Ireland: restaurants, cafés and hot food takeaways sit outside every use class, so a change of use to a restaurant needs planning permission.
Also check:
- Extraction. A new flue or extraction system almost always needs planning permission, and it can cost tens of thousands.
- Planning conditions on opening hours, deliveries and outdoor seating.
- Business rates. Look up the rateable value on gov.uk. In England, small business rate relief and a lower retail, hospitality and leisure multiplier can cut the bill for smaller sites.
- The lease. Ask for a rent-free period for the fit-out, a break clause, and the landlord's consent for alterations. Get a solicitor to read it.
Step 5: Get the licences you need
You don't need a general "restaurant licence". You need specific licences for what you do.
| You want to… | England and Wales | Scotland | Northern Ireland |
|---|---|---|---|
| Sell alcohol | Premises licence + a designated premises supervisor (DPS) with a personal licence (Licensing Act 2003) | Premises licence from the council's Licensing Board + personal licence holder (Licensing (Scotland) Act 2005) | Liquor licence granted by the court under the Licensing (NI) Order 1996; take advice from an NI licensing solicitor |
| Serve food 11pm–5am | Late night refreshment (hot food or drink), through a premises licence | Late hours catering licence from the council, where the council requires one | Licensing Act 2003 doesn't apply; check opening-hour conditions with your council |
| Put tables on the pavement | Pavement licence (England: council fee capped at £500 new, £350 renewal). Wales: ask your council | Ask your council | Pavement café licence from the council (Licensing of Pavement Cafés Act (NI) 2014) |
| Play recorded music | TheMusicLicence (PPL PRS) | Same | Same |
| Show live TV | TV licence | Same | Same |
What a premises licence costs in England and Wales: the application fee is set by your unit's rateable value band, from £100 (Band A) to £635 (Band E), plus an annual fee of £70–£350. A personal licence costs £37, and you need an accredited licensing qualification first. Your application is advertised, and neighbours and the police can comment. If anyone objects, the council must hold a hearing, so plan for about two months. Some town-centre areas have cumulative impact policies that make new alcohol licences harder to get. Check before you sign.
Not selling alcohol and closing by 11pm? You may not need a licence at all, just food business registration.
Step 6: Register and set up food safety
- Register with your council at least 28 days before opening. It's free and can't be refused. You must register even if you take over an existing restaurant.
- Food safety management system: use the FSA's Safer Food, Better Business (England and Wales), CookSafe (Scotland) or Safe Catering (Northern Ireland), or your own HACCP plan.
- Training: the law requires staff to be trained or supervised to a level that fits their job. Level 2 food hygiene for kitchen staff and Level 3 for the head chef or manager is the usual standard.
- Allergens: you must give information on the 14 allergens in every dish. The FSA says written allergen information, supported by a conversation with staff, works best for customers. Read our Owen's Law guide and build a chart with the allergen matrix maker. If you use Menuthere, you can tag the 14 allergens, calories and a halal mark on each dish, on every plan including Free, and diners see them when they open the dish.
- Your first inspection will set your food hygiene rating. Prepare with our EHO inspection guide. Displaying the rating is the law in Wales and Northern Ireland, and voluntary in England. Scotland uses Pass or Improvement Required.
Step 7: Fit out the kitchen and the building safely
- Extraction and ventilation sized for your cooking, with odour control if planning asks for it. Book regular deep cleans of ducts.
- Gas work by a Gas Safe registered engineer qualified for commercial catering.
- Fire risk assessment: a legal duty for the responsible person (Fire Safety Order 2005 in England and Wales; Fire (Scotland) Act 2005; NI has its own order).
- Separate wash-hand basin in the kitchen, plus enough sinks for food and equipment.
- Grease management to stop fat blocking drains.
- Accessibility: under the Equality Act 2010 you must make reasonable adjustments for disabled customers, such as step-free access where you can.
Step 8: Hire your team
- Pay at least the legal minimum. From 1 April 2026 the National Living Wage is £12.71 an hour for workers aged 21 and over. It's £10.85 for ages 18–20 and £8.00 for 16–17 and apprentices.
- Check the right to work for every employee before they start.
- Register as an employer with HMRC, run PAYE and set up workplace pensions.
- Employers' liability insurance is a legal requirement once you employ anyone.
- Tips: since 1 October 2024, all tips must go to staff in full, and you need a written tipping policy.
- Rotas: plan shifts around your covers forecast with our free staff rota maker.
Step 9: Build your menu and prices
- Start short. Ten to fifteen dishes are easier to cook well and cost less to stock.
- Price for GP. Many restaurants aim for around 65–75% GP on food and higher on drinks (typical ranges, not rules). Check every dish in the GP calculator.
- VAT: all food and drink eaten in is standard-rated at 20%, so your menu prices must include it. Cold takeaway food can be zero-rated. See VAT on takeaway food.
- Calorie labelling on menus is only required for businesses with 250 or more employees in England. Smaller restaurants can still show kcal by choice.
- Design it with our free menu templates.
Step 10: Set up bookings, ordering and payments
Pick tools that save staff time from day one:
- EPOS and card readers for the floor. See our restaurant EPOS guide.
- A QR code menu that's always up to date and shows each dish's allergens and calories. Try our free QR code menu.
- Order at the table for busy lunches or bar areas, with a table ordering system.
- Takeaway and collection orders through your own page, so you don't pay commission on regulars. Delivery apps can help you get found, but they charge around 30% plus VAT when they deliver. Compare them in Just Eat vs Deliveroo vs Uber Eats.
- Card surcharges on consumer cards are banned in the UK, so build card fees into your prices.
CTA: give your restaurant one menu for tables, collection and delivery. Menuthere gives you a QR menu, table ordering and a commission-free ordering page from the same menu. QR codes, an ordering website and allergen and calorie tags on every dish are free (up to 50 orders a month). Lite adds unlimited orders, card payments through your own Stripe account, table booking, scheduled orders and advanced delivery zones (pricing by zone), from US$17 a month (billed in US dollars; your bank converts it). Create your free ordering page, book a demo or see Menuthere for restaurants.
Step 11: Soft open, then launch
A soft opening is a few quiet services before your official launch, often for friends, neighbours and local businesses, sometimes at a discount. It lets the kitchen and floor find their rhythm before reviewers and the public arrive.
- Run two or three soft-opening services with a limited menu.
- Ask guests for honest feedback on a short card.
- Fix the bottlenecks: ticket times, pass layout, table turns.
- Set up your Google Business Profile with photos, hours, menu and booking or ordering links before launch.
- Ask every guest for a review with a QR card on the table.
Step 12: Build regulars and protect your margin
- Track covers, average spend and GP every week, not every quarter.
- Re-cost your menu every few months, because supplier prices move.
- Reward regulars: a birthday offer, a loyalty card or early access to new menus.
- Waste: use a licensed waste carrier. In England, food waste must be separated from recycling (businesses with fewer than 10 full-time-equivalent staff must comply by 31 March 2027).
Opening a restaurant in London
The rules are the same, but the numbers are bigger:
- Rents and premiums can be several times higher than in other UK cities.
- Licensing is busier, and several central boroughs have cumulative impact areas.
- Pavement seating often comes with strict hours and space conditions.
- Deliveries and staff travel: factor in ULEZ and congestion charges for older vans.
Restaurant rules across the UK
| England | Wales | Scotland | Northern Ireland | |
|---|---|---|---|---|
| Register food business | 28 days before opening | 28 days before opening | 28 days before opening | 28 days before opening |
| Restaurant planning class | Class E(b) | Class A3 | Class 3 | Outside the use classes (sui generis) |
| Alcohol licensing law | Licensing Act 2003 | Licensing Act 2003 | Licensing (Scotland) Act 2005 | Licensing (NI) Order 1996 |
| Hygiene rating display | Voluntary | Required by law | FHIS (Pass / Improvement Required), display voluntary | Required by law |
| Food safety pack | SFBB | SFBB | CookSafe | Safe Catering |
Your restaurant opening checklist
- Concept tested (pop-up, supper club or tasting)
- Business plan with break-even covers
- SWOT analysis and mission statement
- Funding agreed
- Planning use, conditions and extraction checked before signing
- Lease reviewed by a solicitor
- Premises licence and personal licence (if selling alcohol or open after 11pm)
- Registered with the council 28 days before opening
- Food safety system, training and 14-allergen information ready
- Fire risk assessment and gas safety records
- Employer registration, payroll, pensions, insurance and tipping policy
- Menu costed for GP, VAT-inclusive prices
- EPOS, QR menu, booking and ordering set up
- Soft opening booked, Google Business Profile live
FAQs
How much does it cost to open a restaurant in the UK?
As a typical estimate, about £50,000–£150,000 to take over a fitted restaurant, and £150,000–£500,000 or more to fit out an empty unit. Central London costs more. Fit-out, extraction, kitchen equipment and working capital are the biggest items.
Do I need a licence to open a restaurant?
There's no general restaurant licence. You must register as a food business at least 28 days before opening. You need a premises licence to sell alcohol or serve hot food after 11pm, plus licences for pavement seating, music and live TV if you offer them.
How do I get a licence to sell alcohol in a restaurant?
In England and Wales, apply to your council for a premises licence under the Licensing Act 2003 and name a designated premises supervisor who holds a personal licence. Scotland and Northern Ireland have their own systems. Allow around two months.
Do I need planning permission to open a restaurant?
In England, a unit already in Class E can usually become a restaurant without permission. You'll usually need permission for new extraction, signs and some changes of use. Wales and Scotland have different use classes, so check with your council first.
What should a restaurant business plan include?
A summary, concept, target customers, competitors and SWOT analysis, menu and pricing, premises, team, marketing, a 12-month financial forecast with break-even, and your funding needs.
What is a SWOT analysis for a restaurant?
It lists your strengths, weaknesses, opportunities and threats. Strengths might be a skilled chef or a fitted site. Threats might be rising costs or new competitors. Use it to plan how you'll compete.
Is opening a restaurant profitable?
It can be, but margins are tight. In our worked example, a 50-cover restaurant needs about 51 covers a day to break even and makes around 10% profit at 60 covers. Location, GP and labour control make the difference.
How long does it take to open a restaurant?
Plan for four to nine months from finding a site to opening. Lease talks, planning, licensing and fit-out take the longest.
Sources (11)
- GOV.UK / FSA, Starting a food business and Register a food business, gov.uk/guidance/starting-a-food-business (accessed 11 Oct 2026).
- FSA, Food Hygiene Rating Scheme display rules; Safer Food, Better Business; allergen guidance for food businesses, food.gov.uk (accessed 11 Oct 2026).
- GOV.UK, Alcohol licensing and Alcohol licensing fee levels (premises licence bands A–E £100–£635; annual fees £70–£350; D/E multipliers; personal licence £37) (accessed 11 Oct 2026).
- Licensing (Scotland) Act 2005; Civic Government (Scotland) Act 1982, s.42 (late hours catering); Licensing (Northern Ireland) Order 1996; Licensing of Pavement Cafés Act (Northern Ireland) 2014, legislation.gov.uk (accessed 11 Oct 2026).
- The Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020; Welsh Government use classes guidance; Town and Country Planning (Use Classes) (Scotland) Order 1997 as amended by SSI 2023/35; Planning (Use Classes) Order (Northern Ireland) 2015, legislation.gov.uk (accessed 11 Oct 2026).
- FSA, Allergen guidance for food businesses, gov.uk ("written allergen information, supported by a conversation, works best") (accessed 11 Oct 2026).
- GOV.UK, Pavement licences: guidance (accessed 11 Oct 2026).
- GOV.UK, National Minimum Wage and National Living Wage rates (from 1 April 2026) (accessed 11 Oct 2026).
- GOV.UK, Small business rate relief (accessed 11 Oct 2026).
- GOV.UK, Simpler recycling: workplace recycling in England (accessed 11 Oct 2026).
- British Business Bank, Start Up Loans, startuploans.co.uk (7.5% fixed, up to £25,000, 1–5 years; accessed 11 Oct 2026).