You're just days away from announcing the grand opening of your new restaurant. You've secured the perfect location in a bustling downtown area with plenty of foot traffic. However, one challenge you face is that the space you're leasing for your restaurant is quite small. The layout of your dining room accommodates only 15 tables, providing a total of 60 seats. Despite the limited space, you can still make the most of it. Here’s how.
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How to Maximize Small Restaurants
How to Work With a Small Dining Space
Sometimes, thinking small can help you go big. A smaller location for your restaurant can make the transition to restaurant ownership easier than managing a larger space. Bigger venues require more staff, equipment, taxes, and restaurant furniture, which can be both emotionally and financially overwhelming. In fact, some of the most successful restaurants only offer 20 seats at a time. Additionally, small restaurants naturally convey a sense of busyness, which is a quality most diners prefer. A bustling atmosphere instills confidence—people are more likely to trust a popular, full restaurant as a good dining choice. By limiting the number of seats, you increase their value, encouraging customers to make reservations in advance or try to grab a seat during quieter times. Both strategies can help balance customer demand and prepare you for busier days and nights.
A smaller restaurant also creates a sense of warmth and ambiance that larger spaces often lack. While a small kitchen may limit your menu options, it doesn't mean you can't get creative. Consider offering a rotating fixed-price menu instead of a static dinner menu. This type of menu could include an appetizer, soup, salad, entrée, and dessert for a set price, or feature a more limited selection of appetizers, mains, and desserts. A fixed-price menu, or "prix fixe" menu, can help keep your kitchen organized during peak hours, giving staff ample time to prepare and ensuring smoother operations. You can also run a prix fixe menu alongside your regular menu to highlight specials and attract more customers.
Small in Space and Cost but Not in Quality
Most novice restaurateurs don’t have the budget for a large location. Even many seasoned operators prefer smaller dining rooms. While the space may be more cramped than they would like, owners often aim to maximize the area by seating as many guests as possible without compromising comfort, service, food quality, or ambiance. Though it may take some adjustment initially, you can create a floor plan that best utilizes the available space while accommodating both staff and customers.
Smaller spaces also come with the advantage of lower rent. Typically, leases are priced on a per-square-foot basis. Lower rent costs give your restaurant a better chance of generating sufficient revenue to cover all expenses. As a general rule, your total expenses should not exceed 10% of your profits. For example, if you're renting a small space of approximately 1,000 gross square feet that can seat around 40 guests, and the rent is $25 per square foot annually, your total rent for the year would be $25,000. To comfortably cover this cost, your restaurant would need to generate at least $250,000 in revenue annually.
Lower rent isn't the only economic benefit of smaller restaurants. With only 20 restaurant tables, you’ll need fewer servers. Most operators assign no more than five tables per server, which means you can run with a smaller staff while still providing attentive service. Additionally, having a manager or host available during busy times can further support operations. If you have a bar area, only one bartender is typically required. The size of your kitchen depends on your menu and preparation style, but the smaller the menu, the fewer stations, equipment, and staff you need. A smaller inventory of food, equipment, and beverages usually doesn't come at the expense of quality or sales. For example, a compact restaurant layout can operate with smaller storage areas, as long as the location allows for efficient foot traffic and frequent deliveries.
Varying Built-Out Costs per Space
Even when you decide to start small, there are still built-out costs to consider. A smaller restaurant typically means fewer square feet, which translates to a smaller budget for construction, restaurant furniture, fixtures, and equipment. You can save money by generating revenue sooner, without having to spend extensively on pre-opening rent and other occupancy costs. According to a review of startup restaurants from five years ago, built-out costs for a restaurant typically average about $85 per square foot for an existing space, but can exceed $200 per square foot for a new build.
| Type of Space | Average Built-Out Cost per Sq. Ft. | Estimated Built-Out Cost per Seat |
|---|---|---|
| Existing Restaurant | $85 | $2,222 |
| New Restaurant | $242 | $6,800 |
| Estimated Overall Costs | $183 | $5,080 |
Average Built-Out Costs per Restaurant
Not all small restaurants are created equal. Several factors influence the overall cost per square foot or per seat. The type of restaurant furniture you select, the materials you use, the kitchen equipment required, the age of the building, the availability of utilities and ventilation, and the building's overall condition all play a role in determining expenses. Additionally, the type of small restaurant you operate matters as well. For example, the cost per square foot at a quick-service restaurant (often referred to as a fast-food restaurant), where customers place and pick up their orders at the counter, is typically lower. However, the per-seat cost may be higher compared to other restaurant types. This is primarily because fast-food restaurants tend to have fewer seats and rely more heavily on takeout business.
Fast-casual restaurants, on the other hand, are a bit harder to define. Generally, in a fast-casual restaurant, customers place an order at the counter but have their meals delivered to their tables. The front of the house often has a more attractive layout with stylish furniture and lighting, which contrasts with the simpler design of a fast-food venue. As a result, fast-casual restaurants typically have a higher cost per square foot, as they usually feature a larger seating capacity compared to quick-service restaurants. A full-service restaurant, which uses servers to take and deliver orders, generally has the highest built-out costs. These restaurants often include a bar, which further increases the cost of construction and outfitting the space.
| Type of Restaurant | Average Built-Out Cost per Sq. Ft. | Estimated Built-Out Cost per Seat |
|---|---|---|
| Fast Food/Self-Service | $63 | $3,250 |
| Fast Casual/Self & Table Service | $158 | $1,866 |
| Full Service | $192 | $5,576 |
Lead with Your Restaurant Floor Plan and Design
While there isn’t a one-size-fits-all formula for designing a restaurant floor plan, most restaurants follow basic commercial layouts, including the following:
- Waiting / Entrance Area
- Dining Room
- Bar / Countertop Area
- Kitchen and Prep Rooms
- Storage
- Restrooms
- Patio
To ensure smooth workflow, it’s important that all elements of your venue align with your restaurant floor plan. A small dining room, while offering immediate coziness, can present a challenge when fitting in all the necessary components, including restaurant furniture. Regardless of the restaurant layout design and concept, the dining room is the heart of your restaurant, which is an essential consideration when creating your floor plan.
Decorating a small restaurant can be a challenge for novice restaurateurs who might not see the full potential of a limited space. However, you are only limited by your imagination. Your small restaurant can feel intimate and cozy with a little decorating finesse, or it can appear more expansive, depending on the mood and ambiance you want to create for your guests. Color, for instance, plays a crucial role in your restaurant design. A fresh coat of paint on your walls and ceiling is one of the most cost-effective ways to transform a small restaurant. It can also alter the perception of space. For example, cool colors like blue or green can make a room seem larger by giving the illusion of distance, while lighter shades can have a similar effect. On the other hand, dark or warm hues such as red, orange, and beige can make the space feel more intimate. To create an effective color scheme, try using two or more colors in your palette to complement one another.
Lighting can also influence the perception of the room's size. Natural light is often the best choice, so consider installing large windows at the front of your restaurant to help open up the space. For a more adventurous option, you could invest in large glass garage doors that can be opened during warm weather to expand the space. Additionally, torchieres placed along the walls can bounce light off the ceiling and down into the dining area, making the room appear larger and more open.
Selecting the Right Seating
You may be tempted to cram in more seats than is comfortable in your small dining room, but doing so can lead to poor service. It makes it difficult for servers to move between tables and for customers to enjoy their meals. As a general rule of thumb for restaurant table setup, maintain a 24- to 30-inch gap between each table. Restaurant booths are often seen as a space-saving option for small dining rooms. Like restaurant chairs, booths come in a variety of shapes, sizes, styles, and colors. They can also be customized to fit your seating layout and design. Flexibility is key in a small restaurant. By moving tables together for larger parties or separating them for smaller ones, you can make the best use of your limited space. Regardless of your seating arrangement, ensure there is a clear path leading in and out of the dining room for both staff and customers. To keep the space uncluttered, it’s best to avoid placing prep or hostess stations in the dining area, as these can take up valuable space and make the room feel cramped.
Experimenting with different configurations of restaurant tables and chairs will help you determine how many seats you can comfortably fit in your small dining room. It will also allow enough room for staff to maneuver between tables. Ultimately, your budget will play a role in choosing your restaurant seating. Like other commercial-grade restaurant equipment, restaurant furniture is an investment, as it is built to withstand the daily demands of a busy food service environment. Fortunately, with a smaller venue, you won’t need to purchase as much furniture, which can help you avoid allocating a large portion of your startup budget to seating costs.