The eye-watering cost of launching a new hospitality venture in Australia has been laid bare by two Melbourne entrepreneurs, sparking a national conversation about the financial barriers to starting a business.
The £800,000 Price Tag for a Dream
Matt Chong and his business partner Allan Ngo are preparing to open Buvons Bar, a Vietnamese and French fusion cocktail bar at 357 Collins Street in Melbourne's central business district. In a candid social media reveal, the pair disclosed that getting the 110-square-metre space ready for business will cost them a staggering $800,000 Australian dollars (approximately £416,000) before they even serve their first drink.
"Ever wondered how much it really costs to start a bar? It's not just rent and alcohol," they wrote. The monthly rent alone for the prime location on a busy street is $17,000 AUD. Beyond that, the list of necessary expenditures is extensive and daunting for any new business owner.
A Detailed Breakdown of Expenses
Chong provided a full cost breakdown in a video posted to the bar's Instagram account. Architectural design fees came to $25,000 AUD. As the venue will operate as both a cafe and bar, duplicating appliances cost $130,000 AUD. The kitchen fit-out for brunch and tapas service required $74,000 AUD.
Other major outlays included:
- $55,000 AUD for a glass facade and doors.
- $24,000 AUD for furniture to seat 65 people.
- $46,000 AUD for signage and lighting.
The most substantial costs were for essential but less visible infrastructure. The ventilation and fire system totalled a massive $112,000 AUD, while cabinetry and joinery came in at an astonishing $300,000 AUD. Chong also highlighted "invisible" costs often overlooked, including permits, licenses, and branding, which added another $33,000 AUD.
"All up, that's roughly $800,000 we're in for. It's much more than we imagined," Chong admitted, prompting the owners to ask the Australian public if they were being "ripped off" or if this was simply the standard price of entry into the hospitality industry.
Public Reaction and a Sector Under Strain
The revelation triggered a wave of responses. While many locals praised the pair's determination and pledged to visit, others expressed outrage at the systemic costs. Critics pointed the finger at government "red tape" and regulatory burdens that inflate startup expenses.
"The question shouldn't be about whether you got ripped off but rather why does it cost so much in Melbourne... compared to other countries," one commenter wrote. Another stated bluntly, "You didn't get ripped off, it's just the price of doing business: councils, landlords, government red tape is what makes it expensive."
This discussion unfolds against a grim backdrop for the Australian hospitality sector. Data from CreditorWatch shows nearly one in ten businesses has closed in the past year, with a record-high closure rate of 9.4%. Economy-wide insolvencies have risen by 17% year-on-year.
CreditorWatch CEO Patrick Coghlan noted the industry's particular vulnerability, citing its reliance on discretionary spending amidst rising operational costs, increasing rents, labour shortages, and weaker consumer demand. He urged businesses to proactively manage risk in a precarious economic climate.
The story of Buvons Bar has thus become a potent case study, illustrating the formidable financial hurdles facing small and medium-sized enterprises (SMEs) and fuelling debate on whether such barriers are stifling entrepreneurship in Australia's major cities.
