Money-Saving Tips for Tenant Build-Outs
Designing Smart: How to Save Money Without Sacrificing Quality in Tenant Improvements
Opening a new restaurant, cafe, or bar is one of the most exciting ventures an entrepreneur can take on. It’s also one of the most expensive. Between kitchen equipment, code upgrades, finishes, and furniture, the cost of a tenant build-out can quickly balloon. Many first-time owners are surprised to learn that the most meaningful cost savings rarely come from cutting finishes or shopping for cheaper chairs. More often, the big levers for savings are hidden in layout, phasing, and strategic value engineering.
At Team B, we’ve guided dozens of small businesses through the build-out process. Along the way, we’ve learned what truly drives costs up, and how to design projects that respect tight budgets without undermining long-term success.
Layout Impacts Staffing
One of the biggest cost drivers in hospitality is not construction, but payroll. The way a space is laid out determines how many people it takes to run it efficiently.
Take a bar, for example. If service stations are placed too far apart, you may need three bartenders to cover what could have been managed by two. A poorly organized kitchen can add thousands of wasted steps per shift. Over time, those inefficiencies compound into tens of thousands of dollars in labor costs annually.
Designing circulation with staff in mind (not just guests!) pays dividends. Tight adjacencies, logical service routes, and efficient storage access are design moves that cost little up front but save money every single day.
Spend Where It Counts, Save Where You Can
Owners are often tempted to shave dollars off line items like HVAC or kitchen exhaust. But these are exactly the systems that should never be compromised.
Instead, think of your budget in layers:
Spend on permanence. Mechanical, electrical, plumbing, life safety, accessibility upgrades. These are required for code compliance and will be extremely expensive to redo later.
Save on finishes. Countertops, lighting, and furniture can be swapped out in a future refresh. Starting with durable, affordable materials allows you to open the doors without breaking the bank.
For example, we’ve had clients choose a simple but resilient tile floor for opening day, knowing they can layer in more bespoke elements once revenue stabilizes. Prioritizing durability and function at the core, while saving “wow” moments for later phases, is a practical strategy that sets businesses up for longevity.
Phasing the Right Way
Not every element of a design has to be complete on day one. Phasing is a powerful tool when it’s done intentionally.
The key is identifying what is essential for opening day: life safety compliance, functioning kitchen, ADA accessibility, and a guest-ready front of house. Everything else can follow in Phase 2 or Phase 3.
We once helped a client open with a smaller seating footprint to keep initial construction costs in check. Six months later, after establishing their customer base, they expanded into an adjacent dining area with upgraded finishes. That phased approach allowed them to open sooner and spread investment over time, without compromising safety or guest experience.
The mistake we caution against is cutting Phase 1 costs that will cost double to fix later. Phasing should mean adding later, not redoing later.
Value Engineering Done Right
The term “VE” often strikes fear into the hearts of designers and owners alike. Too often, value engineering is a blunt instrument, stripping away character, cutting features, and diluting the vision. But when done correctly, VE is simply another way of making smart choices.
As architects, our role is to help clients distinguish between savings that matter and savings that cost more in the long run.
Bad VE: Eliminating a key lighting feature that defines the mood of the space.
Good VE: Standardizing all door hardware to one type, which reduces both purchase cost and long-term maintenance.
We’ve saved clients thousands by consolidating equipment specifications or simplifying details in ways that never impact the guest experience. The best value engineering preserves design intent while protecting the budget.
Conclusion
Building out a hospitality space will never be cheap, but it doesn’t have to be overwhelming. With careful design, a clear phasing strategy, and value engineering that protects character, entrepreneurs can save money where it matters most. The result is not just a space that opens on time and on budget, but one that continues to save money every day through efficient operations.
At its best, architecture is a tool to align vision with resources, making dreams feasible without sacrificing identity.
