Tips To Lower Startup Cost To Open A Pho Restaurant

Updated 04-23-23. In other posts on, I've discussed how much it may cost to open your own pho restaurant. In this post, I'll provide some quick top level tips on how to keep the cost to open your own pho restaurant as low as possible, and why anyone can and should do it.

Know What You Don't Know

Lower startup cost to open a Pho RestaurantYeah seriously. But not everyone is aware that this is the first thing he/she should be aware of.

"WTH? You mean, I should know what I don't know?"

Yes that's right, by definition, first time doers lack knowledge and experience. In fact, even experienced restaurant operators continue to learn all the time. Nonstop.

So for first time pho restaurant owners, awareness of your own limitations is critical. You want to know as early as possible what need to be done, when and how, so you can plan for it, budget for it, then do it at the right time and do it right the first time.

How does this help keep your cost down? Well, in a few words:

Knowledge = Planning = Reduced Mistakes = Efficiency = Time = Money.

In other words, things cost more 1) when you don't know that you needed to do them, 2) when you didn't plan or budget for them, 3) when you make mistakes especially those that are avoidable, 4) when you don't execute things the best possible ways under given circumstances, 5) when you don't do them at the right time, and 6) when you don't do them right the first time.

Have A Solid And Realistic Business Plan

This can't be said often enough, but many pho restaurant owners-to-be do not create a business plan. Many think they don't need one. Aside from the fact that the business plan represents your planning and budgeting, it is actually the time you learn what you don't know and start asking the right questions and to search for answers. For tips on pho restaurant business plan, you can read the series starting with Pho Restaurant Business Plan, Part 1.

Understand Your Market And Customer Service

Even though you open your doors to everyone, not everyone will come and eat at your pho restaurant. Only a small segment of the population will find their ways to your door, and an even smaller number will decide to come back. In an area of 1 mile, 3 miles or even 5 miles radius surrounding your business, who will decide to come and at what time? Turning it around the other way, the question becomes: what type of customers do you really want to attract and frequent your restaurant? This may seem too abstract to quantify and design for, but it can be done and is done frequently by those who know they need to identify their market and design their service to attract those exact people. Why would someone open a restaurant without knowing what customers they intend to serve?

Negotiate The Best Lease

Quick question: Once you open, what is one of the biggest costs of your pho restaurant operation that you can't control?

Well it's not a trick question. It's the lease of course.

The problem is, not many realize this until after they open. And many never realize it even after they close their doors prematurely. Reality is they've already made the choice to pay this cost long before the first customer walks in the door. In fact, for many who contacted me for consulting service, the lease has been signed before they even know what they'll have on their menu, who the customers will be, what concept they will serve, and what revenue and profit they will make.

To put it simply, restaurants have controllable costs and uncontrollable costs. I will discuss controllable and uncontrollable costs in a future post, but suffice it to say, the lease that you pay monthly to your landlord, once signed, will not change for years. It will not change for the duration of your restaurant's life at this location, whatever the terms of your lease are. A lease can be good or bad depending on many things, and for this reason alone, you'd want the best deal for your concept at a particular location and make sure it's a good lease.

The bottom line is, why sign the lease before anything else? Why not negotiate and sign the "best" lease you can after you have a business plan and have a clear idea of what you want to achieve?

Keep Design And Buildout Costs Low

This may sound like another obvious statement. The fact is, total cost to open a pho restaurant is made up of many components. Design and buildout (or construction) costs just happen to be 2 of the biggest cost components before you open. Since this is the case, watching closely your design and buildout costs is an absolute must.

It's important to recognize what phases you are in during the process of opening the restaurant. Viewed at a high level, common and major phases include concept definition, design, construction, pre-opening, opening, post-opening, and operation. Each phase has its own timetable. The design phase starts with your concept and menu, and defines nearly all aspects of your restaurant operation before the buildout phase. Design can overlap with the buildout in almost all cases. The trick is to minimize design changes after construction has started, and/or put project management in place to control any negative impact one has on the other.

Preparation, Discipline, And Flexibility

Last but definitely not least, the owner/entrepreneur needs to possess excellent preparation skills, strict discipline with total flexibility to deal with challenges and hurdles normally encountered when building a restaurant. It's all about the knowledge and attitude of the owner. The success of the new pho restaurant depends on its owner first and foremost, and the owner's leadership must be clear from day one. So be prepared, have discipline, be flexible, all while never lose track of your concept's goals.

Obviously opening a new restaurant requires a lot more than doing just the aforementioned things. However, if you do these things right, then you'd have done the 20% that will benefit 80% of your new business. In so doing, you'd be positioned for a very high probability of success.

Leave a comment or question below if you have feedback about this post or any other posts.

Original posted date 09-13-18.
Updated 02-19-19.

For help with your pho restaurant, book a one-hour pho restaurant consultation and get your questions answered.


  1. Phuong Dinh 18 January, 2024 at 07:14 Reply

    I would like to purchase a comprehensive Pho business plan from you. How can I get more information from you. I would like to open Pho restaurant in Spring,Texas. Please contact me :
    Phuong Dinh

    • Cuong Huynh 18 January, 2024 at 13:44 Reply

      Hi Phuong Dinh: Thanks for reaching out. First off, I would discourage anyone from purchasing a ready-made business plan without further customizing it to your particular and specific restaurant concept, location, and requirements. A purchased (or found) business plan should serve only as a template to further develop your actual applicable business plan. For this reason I do not make a generic business plan available for purchase to use as is.

      Even if you have access to a complete business plan done by someone else, you still should go through each and every section to make it really your own. There are a number of important considerations unique to you that should guide how your business will run and what the business plan will say. If this is the direction you want to go, then I’ll be more than happy to assist you in this endeavor.

      I would recommend booking a first appointment via this link: . I will walk you through all the specific steps unique to your situation, and how to take clear actions to achieve your business goals.

      Cuong Huynh
      Pho Restaurant Consulting

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