Small restaurant

A 300-500 sqft rice hotel. Cash comes in daily, but ingredients eat 35-50 percent of sales and six separate approvals are needed to open.

Last reviewed: 19 September 2026
Version 1

Small restaurant

Starting capital: ৳3,00,000 – ৳6,00,000
Manpower: 3 – 8 people
First sale: 60 – 120 days
Break-even: 12 – 24 months
Kind of work: Shop · Hard

About the business

A 300 to 500 square foot rice hotel or small restaurant serving breakfast, a rice-and-curry lunch and roti at night. Customers pay at the table, so cash arrives every day. That daily cash is both the attraction and the trap: money in hand looks like profit until rent, wages, gas and electricity are counted at month end. Ingredients run 35 to 50 percent of sales and the rest goes to rent, staff and gas. On TCB's Dhaka retail sheet for 15 September 2026, coarse rice is Tk 50-55/kg, broiler Tk 180-200/kg, beef Tk 780-850/kg, rui fish Tk 300-450/kg and loose soybean oil Tk 186-195/litre. Over twelve months loose soybean oil rose about 11 percent and broiler about 7 percent, but raising the plate price sends customers to the hotel next door, and that squeeze is what kills most of them. The paperwork is heavier than people expect: trade licence, BFSA food safety registration, a fire licence from Fire Service and Civil Defence, environmental clearance from the Department of Environment, a TIN and VAT registration, typically two to four weeks with documents in hand. Dine-in restaurants pay 5 percent VAT. Location, keeping one good cook, and serving the same taste every single day are what decide survival.

Unit economics

Item	Range	Evidence
Monthly working capital	৳1,00,000 – ৳2,50,000	Editorial estimate
Selling price	৳60 – ৳200 / unit	Editorial estimate
Variable cost	৳25 – ৳80 / unit	Editorial estimate
Gross margin	50% – 65%	Editorial estimate
Time to first revenue	60 – 120 days	Editorial estimate
Break-even time	12 – 24 months	Editorial estimate
Cash cycle	0 – 1 days	Editorial estimate
Waste / loss	8% – 20%	Editorial estimate
Daily capacity	80 – 250	Editorial estimate

What you need to start

Burners, LPG cylinders (12 kg at Tk 1,585 from 2 September 2026), a fridge and deep freezer, large pots and pans, crockery, tables and chairs, a water filter and fans.Equipment
BFSA food safety registration: Tk 1,000 new, Tk 500 renewal, three years, compulsory under the Food Safety (Registration and Licensing) Regulations, 2026. Includes a physical kitchen inspection.Licence
Fire licence from the Directorate of Fire Service and Civil Defence, issued after a fire safety inspection.Licence
Environmental Clearance Certificate from the Department of Environment, covering solid and liquid waste.Licence
TIN and VAT registration from the National Board of Revenue. Dine-in restaurants are charged 5 percent VAT.Licence
Trade licence from the city corporation or union parishad, fee Tk 100-40,000 by trade type. It must explicitly say 'Restaurant' or 'Food Manufacturing'. Plus application form Tk 10, licence book Tk 50, standard tax Tk 30, stamp Tk 150-300.Licence
An experienced cook, the discipline to keep the taste identical daily, and a written daily sales and cost record.Skill
Wholesale rice, oil and spice arots, plus a daily produce, fish and meat supplier.Supplier
300-500 sqft of street-facing space. The deposit and fitout are the largest single part of the capital.Workspace

How the work is done

1Find the location. Stand there morning, noon and evening and count the footfall and the competing hotels.
2Sign the lease. Put the deposit, the notice period and the rent escalation in writing.
3Take the trade licence from the city corporation or municipality. It must say 'Restaurant' on it.
4Register with BFSA: Tk 1,000 new, Tk 500 renewal, valid three years. They inspect the kitchen physically.
5Take the fire licence from Fire Service and Civil Defence and clearance from the Department of Environment.
6Get a TIN and VAT registration from NBR. Dine-in restaurants pay 5 percent VAT.
7Fit out the kitchen and dining area: burners, LPG cylinders, a fridge, utensils, tables, chairs and a water supply.
8Hire the cook. One good cook is the real asset, and when the cook leaves the customers follow.
9Buy the week's stock wholesale and check the day's rates against the TCB list.
10Write down daily sales and daily market spend. The cash box alone never tells you whether you made money.

Seasons

JanNormal
FebLow
MarLow
AprHigh
MayNormal
JunNormal
JulNormal
AugNormal
SepNormal
OctNormal
NovNormal
DecHigh

HighNormalLow

Where it works well

Strong fitChattogram · The port, the EPZ and truck drivers keep sales going at night too.
Strong fitCox's Bazar · Sales soar in the tourist season but the place sits empty off season.
Strong fitDhaka · Office areas, universities and bus terminals give footfall all day.
Strong fitGazipur · Garment workers eat out every day.
Strong fitNarayanganj · Heavy lunch rush in the factory and trading areas.
Strong fitSylhet · Remittance families and tourists support better-quality food.
PossibleBogura · A northern trading centre with highway traffic.
PossibleCumilla · Bus and truck stops along the Dhaka-Chattogram highway.
PossibleKhulna · Demand centred on government offices and markets.
PossibleMymensingh · Customers around the medical and agricultural universities.
PossibleRajshahi · Demand in the university and student areas.

Risks and cautions

HighWorking capital: Ingredient prices rise all year but the plate price cannot follow, because customers switch to the hotel next door. Between September 2025 and September 2026 loose soybean oil rose about 11 percent, packet maida about 14 percent and broiler about 7 percent. This squeeze closes most hotels.
HighCompliance: Six separate approvals are needed to open: trade licence, BFSA registration, fire licence, environmental clearance, TIN and VAT. The restaurant owners' association itself counts 10 to 12 separate regulatory approvals. Operating without them risks a mobile court fine or closure on any given day.
HighSpoilage: Cooked food unsold the same day is a total loss. Rain, a strike or an exam holiday halves sales without warning, after the cooking is already done.
MediumDependency: The whole hotel rests on one cook's hand. When a rival offers more money the cook leaves and the customers follow. Cook turnover is routine in Dhaka.
MediumDemand: Lunch sales nearly stop during Ramadan while rent and wages continue in full. During Eid holidays city hotels empty out as customers leave for their villages.

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