A shop fit-out quote often begins with floor area and a price per pyeong, but that headline rarely equals the cash leaving the business. Demolition, electrical and plumbing work, HVAC, furniture, equipment, signage, design, contingency, and value-added tax can materially change the amount needed before opening. An operating store may also lose profit while it is closed for construction, so downtime belongs in the investment decision even though it is not part of the contractor invoice.
This calculator brings those items into one Korea-based cash budget and then estimates how long the investment takes to recover. It does not treat every won of additional revenue as profit. The uplift is multiplied by a contribution margin after variable costs, verified cost savings are added, and new fixed costs are deducted to produce monthly net incremental cashflow. You can compare the plan with a conservative case that combines a cost overrun, a benefit shortfall, and a construction delay.
New business launch
Connect itemised fit-out quotes with the post-opening sales uplift and cash required before trading.
Existing store renovation
Include profit lost during closure as well as the incremental benefit expected after reopening.
Franchise comparison
Separate franchisor-specified works from equipment, signage, VAT, and local building requirements.
Investment approval
Work backwards from a 24- or 36-month target to the monthly sales uplift the project must support.
What belongs in the budget
Contractors can classify the same work differently, so align scope before comparing totals. If electrical work is already included in the per-pyeong rate, entering it again as a separate item double-counts the budget. If kitchen extraction, power capacity, or air conditioning is excluded and left at zero, the plan understates cash needs. Map each quote line to one calculator field and keep all amounts on the same VAT basis.
Base construction
The entered area is converted to pyeong and multiplied by the unit rate from the quote. The default rate is an editable example, not a Korean market average, and should contain only the work package described by the contractor.
Direct works and trading equipment
Add demolition and waste, electrical and plumbing, HVAC, furniture, fixtures, equipment, signage, and facade work. Confirm whether power upgrades, kitchen extraction, fire-related work, and external units are included.
Design, supervision, and other costs
Enter design fees, drawings, supervision, project management, and known permit, insurance, delivery, or final-cleaning costs. The calculator does not invent unverified statutory or market fees.
Contingency and VAT
The contingency rate applies to base construction plus direct works, before design and other costs. VAT-exclusive quotes add 10%, while VAT-inclusive quotes separate the embedded amount as gross cash multiplied by 10 divided by 110.
Downtime opportunity cost
Existing monthly operating profit is multiplied by closure months. Check that rent and payroll are not separately added again when they are already reflected in the profit figure.
How the formulas work
1. Total investment
Direct works = converted pyeong × unit rate + demolition + facilities + equipment + signage.
Monthly net benefit = gross benefit - added fixed cost.
Post-opening payback = total investment ÷ monthly net benefit.
Working backwards from a payback target
Total investment divided by target months gives the required monthly net benefit. Subtract verified savings, add new fixed costs, and divide the remaining requirement by the contribution margin to obtain the required monthly revenue uplift. If contribution margin is 0% and non-revenue savings are insufficient, the required uplift cannot be derived and the calculator reports no result for that field.
Step-by-step use
Match the floor-area unit. Select square metres when that is how the lease or drawing states the area. The calculator uses 1 pyeong = 3.305785㎡ for the convenience conversion.
Define the unit-rate scope. Check whether demolition, electrical, HVAC, furniture, and equipment are already in the base quote. Do not enter an included package twice.
Standardise VAT treatment. Convert every entered quote to one basis and select VAT exclusive or inclusive. Mixing gross and net amounts produces a misleading total.
Estimate downtime conservatively. An operating store can use representative monthly operating profit from a normal period. A new venture can set existing profit to zero and budget confirmed pre-opening rent or labour separately.
Separate revenue uplift from profit. KRW 15,000,000 of uplift at a 45% contribution margin produces KRW 6,750,000 of revenue contribution before savings and added fixed costs.
Review both scenarios. Compare the conservative payback with the remaining lease term, available cash, and the time the concept is expected to remain viable.
Worked example: a 30-pyeong store
This deterministic example explains the formulas and is not a market quotation. The store is 30 pyeong with a KRW 2,000,000 base rate, KRW 8,000,000 demolition, KRW 15,000,000 facilities, KRW 20,000,000 furniture and equipment, and KRW 5,000,000 signage. Design is KRW 4,000,000, other confirmed cost is KRW 2,000,000, contingency is 10%, and entered quotes are VAT exclusive.
Budget calculation for the 30-pyeong worked example
Item
Amount
Basis
Base construction
KRW 60,000,000
30 × KRW 2,000,000
Direct works
KRW 108,000,000
Base + demolition + facilities + equipment + signage
Contingency
KRW 10,800,000
Direct works × 10%
Net supply value
KRW 124,800,000
Direct works + contingency + design + other
VAT
KRW 12,480,000
Net supply value × 10%
Cash project cost
KRW 137,280,000
Net supply value + VAT
Downtime opportunity cost
KRW 7,500,000
1.5 months × KRW 5,000,000
Total investment
KRW 144,780,000
Cash project cost + downtime
A KRW 150,000,000 cash budget leaves KRW 5,220,000 after the total investment. Revenue uplift of KRW 15,000,000 at a 45% contribution margin produces KRW 6,750,000, then KRW 500,000 savings are added and KRW 1,000,000 fixed cost is deducted. Monthly net benefit is therefore KRW 6,250,000. Post-opening payback is about 23.1648 months, and payback from the project start is about 24.6648 months after adding 1.5 months of downtime. Annual simple ROI is about 51.8027%, while cumulative net cashflow at month 60 is KRW 220,845,000.
Reading the conservative case
Hidden conditions can appear after demolition, and both opening date and customer response can miss the plan. The conservative case applies the entered cost overrun to cash project cost, extends downtime by the delay, and reduces revenue contribution plus cost savings by the benefit shortfall. Added monthly fixed cost is not reduced, which keeps the stress test conservative.
Plan and conservative results for the 30-pyeong example
Scenario
Investment
Monthly net
Payback from start
Month-60 cumulative
Plan
KRW 144,780,000
KRW 6,250,000
24.6648 months
KRW 220,845,000
Conservative
KRW 163,508,000
KRW 4,800,000
36.5642 months
KRW 112,492,000
With a 10% cost overrun, 20% benefit shortfall, and one extra month of delay, total investment rises to KRW 163,508,000 and exceeds the example budget by KRW 13,508,000. Monthly net benefit falls to KRW 4,800,000 and payback from project start lengthens to about 36.6 months. This gap is a prompt to secure a cash reserve, reduce scope, or improve contract certainty before committing funds.
Practical use by business type
Cafe or restaurant
Separate extraction, water and drainage, gas, electrical capacity, kitchen equipment, and HVAC from the headline fit-out rate. Use a contribution margin that reflects ingredients, delivery charges, and card fees.
Salon, clinic, or service premises
Confirm specialist equipment, water, electrical load, partitions, and acoustic work. Add labour-time savings only when they can be translated into a genuine recurring cash benefit.
Retail store or showroom
Check ownership of display furniture, lighting, security equipment, signage, and initial fixtures. Inventory has a different cash-conversion cycle and is usually clearer outside this fit-out calculation.
Renovation of an operating store
Use representative profit from normal trading for downtime. If online or temporary operations continue during construction, reduce the lost-profit input to the amount genuinely at risk.
Quote and contract checklist
Put every contractor quote on either a net-supply or VAT-inclusive cash basis before comparing totals.
Obtain a trade schedule showing floors, walls, ceilings, joinery, lighting, electrical, plumbing, HVAC, fire-related work, and equipment.
Document how variations discovered after demolition are approved, priced, photographed, and added to the contract.
Align deposits, progress payments, final payment, and tax-invoice timing with the cash plan.
Check permitted construction hours, lift and parking charges, waste removal, complaints procedures, and building-management rules.
Compare conservative payback with the remaining lease term and separately review reinstatement and fixture ownership in the lease.
Korean VAT basis and legal limits
Verified 2026 tax rate
The Korean National Law Information OPEN API returned the current Value-Added Tax Act as law ID 001571 and MST 276117, effective January 2, 2026. Article 30, retrieved with article code 003000, sets the value-added tax rate at 10%. The calculator therefore adds 10% to VAT-exclusive project cost and separates embedded VAT from an inclusive quote as gross cash × 10 ÷ 110.
What the calculator does not decide
Displayed VAT is a cash-budget amount, not a decision that the business can claim or recover all of it. Registration timing, taxable and exempt activities, valid tax invoices, shared input tax, and non-deductible items can change the tax result. Confirm treatment and timing with a Korean tax professional before filing. The tool also does not determine fire, electrical, gas, hygiene, change-of-use, licensing, construction-defect, contractor-dispute, or lease compliance.
Frequently asked questions
What if the per-pyeong rate overlaps the extra costs?
Use the contractor trade schedule and remove any separately entered item already included in the base rate. Entering the same electrical, joinery, or HVAC package twice overstates the budget.
Should a new business enter downtime loss?
If there was no existing operation, existing monthly operating profit can be zero. Confirmed pre-opening rent, payroll, finance, or temporary-operating costs should still be placed in an appropriate separate cash plan.
How should I estimate revenue uplift?
Build low, base, and high operating cases from seats, turns, average ticket, appointments, conversion, and opening hours. Do not assume design alone causes the uplift, and use the benefit-shortfall input to stress the case.
Is contribution margin the same as operating margin?
No. Contribution margin removes costs that rise with sales, while rent and permanent payroll are generally fixed costs considered later. The calculator uses contribution margin to isolate how much incremental revenue can fund recovery.
Is the project safe if payback is shorter than the lease term?
Not necessarily. Revenue uncertainty, rent increases, early termination, reinstatement, key-money recovery, financing, and residual fixture value still require separate review.
Can expected VAT recovery be deducted from investment?
The calculator deliberately does not deduct it because recoverability is business-specific. Track a refund separately only after valid invoices, tax status, deductible amount, and timing have been confirmed.
Are the default 10% overrun and 20% shortfall official?
No. They are editable demonstration assumptions, not statutory limits or market statistics. Replace them with risk ranges supported by the quote, contract, and operating plan.
Official source and update basis
Korean National Law Information OPEN API search for the Value-Added Tax Act: current law ID 001571, MST 276117, effective January 2, 2026.
Value-Added Tax Act Article 30, article code 003000: 10% rate verified for the current effective text.
Verification date: July 24, 2026. Construction prices and payback thresholds remain user inputs because this calculator does not rely on an official market-rate table.
Recalculate with the actual quotes and a conservative case
Put unit rates, exclusions, VAT, downtime, and added fixed cost on one cash basis rather than comparing headline construction rates alone. Confirm that both planned and conservative payback fit the funding capacity and lease horizon before settling scope and contract terms.