Commercial property in England now averages £112 per square foot after a 19% rise in a single year, and once open, wages alone will absorb around 37.5% of revenue (industry research, 2025). Barriers to entry in UK restaurants are formally rated low — anyone can enter — but the capital and the running costs decide who stays.
Premises and fit-out: the big cheque
The site is the largest upfront commitment. Beyond rent and deposit, a new restaurant needs commercial kitchen equipment, extraction, refrigeration, furniture, tableware and the interior itself — costs that scale sharply in high-footfall urban locations where the customers actually are. Leases in the sector are typically short, five to ten years, often with upward-only rent reviews, which means fit-out spend must pay back fast. The alternative route the report notes is buying an existing business: paying a premium for a site that already has extraction, a licence and a kitchen can be cheaper than building all three.
Licences and compliance
Serving alcohol requires a premises licence and a designated premises supervisor, alongside food business registration, hygiene compliance under the Food Safety Act and allergen processes that have tightened significantly in recent years. Planning permission comes into play for outdoor seating or structural changes. None of these lines is enormous alone, but each carries lead time — and a delayed licence postpones opening day while rent runs.
People: the cost that never stops
Staffing is where new operators most often underestimate. The National Living Wage stands at £12.21 an hour, employer National Insurance rose sharply in 2025, and a full-time employee now costs at least £2,500 a year more than before those changes. With hospitality vacancies 48% above pre-pandemic levels, recruiting a full opening team takes longer and costs more than most business plans assume. Budgeting wages at the industry's 37.5% of projected revenue — not an optimistic 30% — is the honest starting point.
Operator takeaway
Model your first year at the industry's real numbers: 37.5% wages, 28.3% purchases, 14% rent, and a 6.3% margin if everything goes to plan. If the plan only works at better ratios than the national average, it is a hope, not a plan. The operators who survive year one opened with systems for bookings, costs and staffing already in place — retrofitting discipline mid-service is far more expensive.