For new owners, opening a restaurant is a challenging task. There is a lot of planning involved, from choosing the right location, chef, and all the other challenges involved.
But, is managing a restaurant only a thing to run? Nope.
After choosing the right location, it’s time to go deeper into the registration process of a restaurant, which includes the necessary licenses and permissions to run it smoothly. Without proper licenses and permits, you might be unable to move forward towards setting up your restaurant, buying equipment, hiring staff, and choosing POS software for your restaurant business.
You need permissions and licenses from authorities and certain laws to be aware. It is important to have all the documents, licenses, and permits in hand before starting even the most basic work in your restaurant.
That’s why we have created a checklist of restaurant licenses you need before taking a step ahead.
So, the question is how to start. The first thing is to make the business legal so you keep it running smoothly.
People usually don’t feel excited about dealing with that tedious paperwork and set of legislation, yet it has many benefits for your restaurant business. It helps to protect your business and help it grow smoothly.
Another reason is it guarantees strong financial health with all the necessary tax registrations, business licenses, and permits issued by the authorities. It might take time, in the beginning, to deal with the trouble that might arise in the future.
Before acquiring the licenses, deciding the business structure that will fit your business is important. Here are three types that suit best for your restaurant business-
A sole proprietorship is a business owned by one person. This structure is simple to form and operate, offering complete control and unlimited liability to the owner. A sole proprietorship may be the right choice if you’re considering starting a business.
The biggest advantage of a sole proprietorship is that it’s easy to manage and set up by a single person. No complicated legal or financial requirements exist, and you can get started without special permits or licenses.
A partnership is a business relationship between two or more people who agree to cooperate to achieve a common goal. The partners in a partnership share the profits, losses, and management of the business.
A partnership is created by signing a Partnership Agreement at a state registry and each state as its legislation.
LLCs offer liability protection and tax advantages and are commonly used as business structures. LLCs are popular among small business owners because they are relatively easy to set up and offer flexible management options.
So, let’s get started. Here is a list of essential licenses you need to open and operate a restaurant.
To start processing your restaurant business, you will need a tax ID number which is called an Employee Identification Number (EIN). The EIN is essential and assigned by the IRS.
Applying for EIN is pretty straightforward. You can apply online via phone, fax, or mail to obtain your EIN. If your restaurant is located in the US within US territory, you can apply online and complete your application.
You can apply on the IRS website, which is free of charge.
To open a food service business, you must obtain a food service license from your local authorities. This license will allow you to operate your business by the food safety regulations in your area.
Obtaining a food service license can be a simple process, but it will vary depending on your location. Sometimes, you may need to submit an application and pay a fee of $100 to 1,000. You may need to attend a food safety course or pass a food safety exam.
You can obtain the food license by applying online or in person through your local health department. You will need to fill in the basic information like the name of your restaurant, address, and the owner’s personal information.
After that, a food inspector will visit your restaurant for an in-person visit and make sure you comply with all of the restaurant Food Safety Regulation, which varies by state.
A food license only covers a food service license, but if you intend to serve alcohol, you will need a liquor license.
It permits all alcoholic beverages, and the laws vary from state to state, meaning you might need different liquor licenses depending on your restaurant’s location. In addition, the same state may have additional rules about liquor licensing requirements and procedures.
Rember, you need to renew your liquor license by paying a renewal fee. The liquor license cost varies drastically, ranging from $ 12,000 to $ 400,000, while beer and wine licenses can be as low as $3,000.
To work in a food service establishment in the United States, you must obtain a food handler’s permit. This permit is obtained by passing a food safety examination covering foodborne illness and food handling procedures.
Once your employees have completed the food handlers course that covers topics like foodborne illness and food handling procedures, the food safety certification is issued. A food handler’s permit is also required for employees.
You may be subject to legal penalties if you work in a food service establishment without a valid food handler’s permit. Therefore, it is important to make sure that you obtain a food handler’s permit before you begin working in a food service establishment.
The cost of food handlers permits varies depending on the state, ranging from $100 to $500.
You must get a certificate of occupancy to occupy a building or build any infrastructure. A Certificate of Occupancy (CO) is a document issued by a local government agency or building department to certify that a building is safe to occupy. A CO is usually required before a business can move into a new commercial space.
If you’re planning on opening a new business, you must check with your local government agencies to see if you need a CO. The process of obtaining a CO can vary depending on the type of business and the location, so it’s essential to do your research ahead of time.
The CO is needed if-
The cost varies based on location and generally costs about $100.
Most businesses must obtain a sign permit before erecting any signage on their property. The process for obtaining a sign permit varies depending on location, but the basic steps are generally the same.
First, you must submit a zoning certification, consent from your landlord or property owner, sketches of the proposed signs, and the business license and permits.
It’s important to note that there are often restrictions on the size and type of signage businesses can erect. So be sure to check with your local municipality before you get started on your sign project. The cost of a sign permit might range from less than $100 to several hundred.
The above are some important licenses needed for your restaurant, but here are some additional licenses you might need-
You don’t need to get tensed about the licenses you need for your restaurant. We have explained some important licenses that are needed and obtained easily.
These licenses are mandatory to keep your restaurant business running smoothly and efficiently once you have all these crucial licenses. Double-check with your local authorities and the government’s website to ensure all the required licenses and permits you need and how you can apply.
In addition, also make sure all the insurance policies, permits, and licenses are up-to-date, or you might face some huge fines or even lose the right to hold the license.
We can also help you with our Restaurants consultants at Posbytz to start your restaurant business in ease along with our complete restaurant management software.
PosBytz is your comprehensive platform to manage everything you need to sell and grow your business.
PosBytz is a product of Bytize, Inc.