If you are opening a restaurant, whether it is going to be a fast food restaurant, café, or food truck, you will need to obtain the required licenses and permits to sell food legally, ensuring compliance with health and safety regulations.
The steps required to open a restaurant are similar across different states. Below, we describe them briefly, focusing on opening a restaurant in Pennsylvania.
We pay special attention to the food licenses and permits necessary to operate a food business in Pennsylvania, but the general steps are similar to opening a restaurant in any state.
Step 1. Choose your restaurant concept
Determine the type of restaurant you want to open, considering the cuisine, atmosphere, and target audience. Think about the kind of food you’ll serve and the cooking methods. Identify your ideal customers and plan for the number of employees needed. Decide if you want to provide a full-service dining experience or a takeout counter with limited seating.
- Fine Dining: Offers gourmet cuisine, a sophisticated ambiance, and outstanding service. Learn more about what is fine dining here.
- Fast Food: Delivers quick meals through drive-thru or counter service, emphasizing speed and convenience. Learn about how to open a fast food restaurant.
- Fast Casual: Blends the quick service of fast food with the quality of casual dining, often with healthier, customizable options. Learn more about what is a fast casual restaurant.
- Ethnic Cuisine: Focuses on authentic dishes from regions like Italy, Mexico, Thailand, or India.
- Food Truck: Mobile kitchens provide a variety of street foods, from tacos to gourmet sandwiches. Learn about how to start a food truck business.
- Bistro: Serves light meals, sandwiches, and beverages in a cozy, relaxed environment, often highlighting coffee or tea. Learn more about what is a bistro restaurant.
- Vegetarian or Vegan: Specializes in plant-based dishes for vegetarians and vegans.
Step 2. Write a restaurant business plan
To get your restaurant up and running in Pennsylvania, the next step is to craft a clear restaurant business plan. Kick off with an executive summary, and then sketch out your restaurant’s mission, vision, target market, financial projections, and strategy. Don’t forget to choose the right business structure before you flesh out the detailed plan.
- Sole Proprietorship: Owned by one individual. It’s easy to set up but doesn’t distinguish between personal and business liabilities.
- Partnership: Multiple people share ownership. Responsibilities, profits, and liabilities are divided among partners.
- Limited Liability Company (LLC): Provides the simplicity of a partnership with the liability protection of a corporation, making it suitable for small to medium-sized restaurants.
- Corporation: Creates a separate legal entity from its owners, offering substantial liability protection but with more regulations and potential double taxation for C corporations.
- S Corporation: Similar to a regular corporation but with pass-through taxation, avoiding double taxation while offering liability protection.
For first-time restaurant owners, an LLC is typically the preferred business structure. Small restaurants often opt for this model due to its numerous benefits that align with the needs of new businesses.
- Simplicity and Flexibility: LLCs are easy to form and offer a flexible management structure, which is advantageous for new restaurant owners who may not have extensive business knowledge.
- Personal Asset Protection: An LLC safeguards your personal finances from business debts and liabilities, a critical consideration for small business owners who want to minimize personal financial risk.
- Tax Benefits: LLCs allow profits to pass through to personal tax returns, avoiding the double taxation that corporations might face, simplifying tax filings, and potentially saving money on taxes.
- Less Red Tape: LLCs face fewer formal requirements compared to corporations, making them easier to manage on a daily basis.
- Scalability: LLCs are well-suited for growth, easily accommodating new owners or expanding to multiple locations as the business grows.
Choosing an LLC provides peace of mind by protecting personal assets in case your restaurant faces legal challenges, such as lawsuits or financial disputes.
Step 3. Research restaurant software
When writing your business plan, think about the technology you’ll need for your restaurant. The right restaurant management software is crucial for seamless operations. Start by choosing a food ordering system that manages everything from orders to payments and deliveries.
- Low Transaction Fees: Avoid hefty commissions from third-party services like Uber Eats and GrubHub, which can take up to 30% of your revenue. Opt for systems that help your brand grow without high fees.
- Order Management: Handle customer orders efficiently from beginning to end. The software should simplify the process, reduce mistakes, and work with in-house and online systems.
- Menu Management: Update and customize menu items, including prices and descriptions, with ease. The software should allow for quick changes, like adding specials, and sync across all platforms.
- Website & Mobile App: Provide a user-friendly website and app for customers to view your menu, place orders, and make reservations, enhancing their experience and simplifying online interactions.
- Loyalty System: Create a loyalty program to reward repeat customers with points or discounts. The software should track purchases and automatically apply rewards, fostering customer retention.
- Marketing Tools: Access tools to market your restaurant effectively, including email marketing, social media integration, and promotional campaigns to attract and retain customers.
- Delivery Management: Manage delivery orders efficiently and coordinate with delivery staff or third-party services. The software should offer real-time tracking and route optimization to ensure timely deliveries.
- Marketing tools: Access tools that help you market your restaurant effectively. Look for features that support email marketing, social media integration, and promotional campaigns, helping you attract new customers and retain existing ones.
- Delivery management: Efficiently manage delivery orders and coordinate with delivery staff or third-party services. The software should offer real-time tracking, route optimization, and integration with delivery platforms to ensure timely and accurate order fulfillment.
Step 4. Secure financing
Getting the necessary restaurant financing involves handling significant startup costs like leasing or purchasing a space, buying equipment, making renovations, acquiring initial inventory, and hiring staff. These costs can vary but usually require a large capital investment.
Common Financing Sources Include:
- Traditional Bank Loans
- Small Business Administration (SBA) Loans
- Investors
- Personal Savings
- Crowdfunding
- Partnerships with Lenders Specializing in the Restaurant Sector
Follow the following link for more information about restaurant financing.
Step 5. Select a restaurant location
Choosing a location for your restaurant should match your restaurant’s target market. Important considerations include foot traffic, the presence of nearby competitors, local demographics, and the availability of parking, all of which play a vital role in drawing in customers.
Perform detailed market research to grasp local tastes, and pick a location that promotes your restaurant’s growth and improves customer satisfaction.
Step 6. Apply for licenses and permits
Opening a restaurant in Pennsylvania requires obtaining several licenses and permits to comply with state and local regulations. These permits may be issued federally, by the state of Pennsylvania, or locally by city and county authorities. Below are the key licenses and permits you’ll need to start your restaurant business in Pennsylvania.
1. Registering your restaurant
Before applying for the necessary licenses and permits, you need to register your business with the Pennsylvania Department of State. You must select a business entity type, such as an LLC or corporation, and file the appropriate paperwork.
2. EIN (Employer Identification Number)
An EIN, or Employer Identification Number, is assigned by the IRS for tax reporting purposes. This unique nine-digit number is necessary for your business operations.
3. Business License
You need a general business license from the city or county where your restaurant will operate. This license allows you to legally conduct business within that jurisdiction.
Important Note: If your Pennsylvania restaurant operates in multiple locations across different cities and counties, you must obtain a separate business license for each physical location.
How Much Does a Business License Cost in Pennsylvania?
The cost of a business license in Pennsylvania varies depending on the business location and type. Fees typically range from $50 to several hundred dollars per year. Some cities and counties may impose additional fees or taxes based on gross receipts or other criteria.
4. Food License PA and Certified Food Protection Manager
To ensure your restaurant complies with Pennsylvania’s food safety regulations, you need to obtain a food license in Pennsylvania, commonly known as a retail food facility license. Additionally, your restaurant must have a Certified Food Protection Manager to oversee food preparation and ensure compliance with safety standards.
Important Note: Food handlers working in Pennsylvania must receive training and obtain a food handler certification. All licensed facilities must undergo an annual compliant inspection to maintain their licenses.
5. Food Facility Health Permit
To operate a food service establishment in Pennsylvania, you must obtain a Food Facility Health Permit from your local health department. This permit ensures that your restaurant complies with health and safety regulations for food storage, handling, and preparation, which helps prevent foodborne illnesses.
Important Note: Health permits must be renewed annually. If you are opening a new facility or taking over an existing business, you will need to secure a new permit. You must obtain an inspection report stating compliance from your local health department prior to opening or transferring ownership.
What is the Cost of a Food Facility Health Permit in Pennsylvania?
License fee may vary depending on the city or county. They typically range from several hundred to over a thousand dollars annually. Check with your local health department for specific information.
6. Certificate of Occupancy
A Certificate of Occupancy (CO) is required to legally operate a restaurant in Pennsylvania. It is issued by the local building or zoning department after confirming that the building complies with all local codes, including health and safety regulations. This certificate ensures that the restaurant space is safe and suitable for its intended use.
Important Note: Ensure compliance with ADA regulations to make the restaurant accessible to individuals with disabilities, covering areas like entrances, parking, seating, and restrooms.
7. Seller’s Permit (Sales Tax Permit)
If you plan to sell food and beverages, you must obtain a Sales and Use Tax Number from the Pennsylvania Department of Revenue. This number authorizes you to collect sales tax on items purchased by customers.
8. Liquor License Permit
To sell alcoholic beverages, you need a liquor license from the Pennsylvania Liquor Control Board (PLCB). This permit allows you to legally sell alcohol on or off the premises, depending on the type of license you apply for. Drinking establishments and similar public food facilities must ensure their license is up-to-date and comply with state regulations.
Important Note: Licenses must be renewed annually, and failing to pay the renewal fee on time can result in expiration. Ensure you maintain a current expiration date on your license to avoid penalties. If a duplicate license is needed, contact the PLCB.
Step 7. Create your menu
Creating a menu for your restaurant means curating a selection of dishes that embody your restaurant’s identity and attract your intended clientele. Implement menu engineering strategies to enhance profitability and elevate customer satisfaction.
Step 8. Build your team
Your staff is the most valuable resource in your restaurant. Focus on the recruitment, hiring, training, and retention of the best employees for your establishment.
Implement thorough training programs, provide competitive wages, and offer benefits such as health insurance to decrease employee turnover. This will help you maintain a consistent and happy workforce.
Step 9. Purchase equipment
When purchasing equipment for your restaurant in Pennsylvania, consider the diverse climate conditions across the state, from the humid summers in the southeast to the colder, mountainous regions in the northwest. The specific needs for kitchen equipment may vary depending on whether your food establishment is located in these varied environments.
Ensure that the equipment you choose is suitable for your restaurant’s specific climate and operational demands to maintain optimal performance and longevity. For new facilities, it’s crucial to select energy-efficient models that comply with Pennsylvania’s environmental regulations and help reduce long-term operational costs.
Currently licensed facilities and existing businesses should also prioritize regular maintenance and updates to their equipment to ensure compliance with state guidelines and to leverage available laboratory services for performance testing and safety checks.
Step 10. Prepare a marketing plan
Creating a comprehensive restaurant marketing plan for opening in Pennsylvania should prominently feature restaurant social media marketing.
Use platforms like Instagram, Facebook, and Twitter to engage with your local community and showcase your unique offer. This will build a loyal customer base.
Step 11. Host soft and grand openings
Staging both soft and grand openings is key to building excitement and awareness for your restaurant’s opening. Consider creative grand opening strategies like hosting themed events, offering exclusive tasting sessions, or working with local influencers to enhance your restaurant’s visibility and attract a diverse and eager clientele.
Follow the link for creative grand opening ideas for restaurants.
Step 12. Create a restaurant website
In the current digital age, establishing a solid online presence is essential for restaurants. Your website serves as your restaurant’s digital business card, so regular updates and maintenance are key. UpMenu’s restaurant website builder makes it simple to create a polished website using templates designed for restaurants, and you don’t need any technical skills to get started.
To help you get started, we’ve prepared a step-by-step guide on how to create a restaurant website.
Key Takeaways
- Opening a restaurant in Pennsylvania involves securing various licenses and permits, such as a Food Facility Health Permit, a Seller’s Permit for sales tax collection, and a Business License. Ensure compliance with local, state, and federal regulations related to food safety, health standards, and, if applicable, alcohol service.
- Begin by selecting a restaurant concept and crafting a detailed restaurant business plan. This plan will serve as a roadmap for operations, marketing, and financial success, guiding you through Pennsylvania’s licensing and permit application process.
- In your financial projections, include the usage of restaurant technology like a food ordering system and a POS system. These technologies can optimize operations, improve customer experience, and streamline processes.
- Develop a comprehensive marketing plan and explore different restaurant promotion ideas, with a particular emphasis on restaurant social media marketing, to ensure success in running a restaurant.
Frequently Asked Questions (FAQ)
How Much Does It Cost to Start a Restaurant in Pennsylvania?
Starting a restaurant in Pennsylvania generally costs between $150,000 and $800,000, influenced by factors like location, size, concept, and amenities. Key expenses include leasing or purchasing space, renovations, equipment, permits, licenses, initial inventory, marketing, and staffing. Costs can vary significantly, particularly between urban areas like Philadelphia and smaller towns. Compliance with Pennsylvania’s commercial kitchen requirements is also necessary.
What Permits Do I Need to Sell Food in Pennsylvania?
To sell food in Pennsylvania, you need the following permits and licenses:
- Business License: Required for any business.
- Food Facility Health Permit: Ensures compliance with health standards.
- Seller’s Permit: For collecting sales tax.
- EIN (Employer Identification Number): For tax purposes.
- Food Handler’s License: For all food handlers.
- Certificate of Occupancy: Ensures building safety.
- Liquor License Permit: If serving alcohol.
You may also need temporary permits for special events. Contact the Pennsylvania Department of Revenue and the Pennsylvania Department of Agriculture for details.
How Much Money Should You Have to Open a Small Restaurant in Pennsylvania?
Opening a small restaurant in Pennsylvania typically requires an investment of $40,000 to $450,000, depending on factors such as location and size. Maintaining positive cash flow is crucial.
How Profitable Is Owning a Restaurant in Pennsylvania?
On average, restaurants in Pennsylvania earn 2% to 6% above their expenditures. Profitability depends on controlling overhead costs, initial startup costs, and compliance with regulations. Managing building inspections and renewals effectively is crucial for smooth operations.
Understanding and following food service license regulations and Pennsylvania commercial kitchen requirements is key to operating a successful restaurant in the state.
