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.
In this article, we will focus on what is necessary to serve food in your restaurant opened in Illinois. Let’s dive into the details!
The steps required to open a restaurant are similar across different states. Below, we describe them briefly, focusing on opening a restaurant in Maryland.
We pay special attention to the food licenses and permits necessary to operate a food business in Maryland, but the general steps are similar to opening a restaurant in any state.
Step 1. Choose your restaurant concept
Decide on the restaurant type you wish to open, considering the cuisine, ambiance, and the clientele you want to attract. Think about the food you’ll offer and how it will be prepared. Identify your target customers and estimate the number of employees you’ll need. Decide if you want a full-service experience or a takeout counter with limited seating.
- Fine Dining: A fancy restaurant serves great food, has a nice atmosphere, and provides excellent service. Learn more about what is fine dining here.
- Fast food eateries provide speedy and convenient meals, usually through drive-thru or counter service, and prioritize efficiency and convenience.. Learn about how to open a fast food restaurant.
- Fast Casual: Enjoy the quick service of fast food along with the good quality of a casual dining experience. You can often personalize your meals and find healthier choices on the menu. Learn more about what is a fast casual restaurant.
- Ethnic cuisine: This type of cuisine focuses on traditional dishes from a particular region or country, for example, Italian, Mexican, Thai, or Indian food.
- Food Truck: At mobile food trucks, a diverse selection of street foods is available, including tacos, burgers, gourmet sandwiches, and desserts.. Learn about how to start a food truck business .
- Bistro: Serves light meals, sandwiches, salads, and drinks in a comfortable, informal environment, with a focus on coffee or tea.. Learn more about what is a bistro restaurant.
- Vegetarian or Vegan: Serves light meals, sandwiches, salads, and drinks in a comfortable, informal environment, with a focus on coffee or tea.
Step 2. Write a restaurant business plan
Starting a restaurant in Illinois? The next step is to put together a sharp restaurant business plan. Begin with an executive summary, then outline your restaurant’s mission, vision, target market, financial projections, and operational strategy. Be sure to pick the right business type before you dive into the details of your plan.
- Sole Proprietorship: A single individual owns and runs the business. It’s straightforward but lacks a separation between personal and business liabilities.
- Partnership: Two or more individuals share ownership, dividing profits, responsibilities, and liabilities.
- Limited Liability Company (LLC): Offers the simplicity of a partnership with the liability protection of a corporation, ideal for small to mid-sized restaurants.
- Corporation: Provides separate legal status from its owners, offering strong liability protection but with more regulatory hurdles and potential for double taxation if a C corporation.
- S Corporation: Functions like a regular corporation but offers pass-through taxation to avoid double taxation while maintaining liability protection.
For a new restaurant owner, a Limited Liability Company (LLC) is often the best fit. Many small restaurants choose this structure because it meets the unique needs of new businesses.
- Ease of Setup and Flexibility: LLCs are relatively easy to establish and offer flexible management, making them perfect for first-time restaurant owners who might lack extensive business expertise.
- Personal Liability Protection: LLCs provide a shield for personal assets, protecting you from business debts and liabilities—a key consideration for small business owners looking to minimize personal financial risk.
- Tax Efficiency: LLCs benefit from pass-through taxation, meaning profits are reported on personal tax returns, thus avoiding the double taxation that can occur with corporations, simplifying the tax process.
- Fewer Regulatory Demands: Compared to corporations, LLCs have fewer formalities and paperwork, making day-to-day management simpler.
- Growth Potential: LLCs can easily accommodate business growth, whether it’s adding new owners or expanding to new locations.
Forming an LLC gives you the confidence that your personal assets are protected, should your restaurant face legal challenges or financial difficulties.
Forming an LLC gives you the confidence that your personal assets are protected, should your restaurant face legal challenges or financial difficulties.
Step 3. Research restaurant software
As you create your business plan, think about the technology your restaurant will need. Choosing the right restaurant management software is key to smooth operations. Start with a food ordering system that can handle everything from orders to payments and deliveries.
- Minimal Transaction Fees: Avoid the high commissions from services like Uber Eats and GrubHub, which can take up to 30% of your revenue. Look for systems that prioritize your brand without costly fees.
- Order Management: Efficiently manage and track customer orders from start to finish. The software should streamline the order process, reduce errors, and integrate with in-house and online systems.
- Menu Management: Easily update and customize your menu items, prices, and descriptions. The software should allow for quick adjustments, 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: Implement a loyalty program that rewards repeat customers with points or discounts. The software should track purchases and automatically apply rewards, encouraging repeat business.
- Marketing Tools: Utilize tools to market your restaurant effectively, such as email marketing, social media integration, and promotional campaigns, helping you attract new customers and retain existing ones.
- 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.
Step 4. Secure financing
To secure restaurant financing, you’ll need to cover major startup expenses such as leasing or purchasing a property, buying equipment, renovating, acquiring initial inventory, and hiring staff. These costs can vary greatly but generally require a significant capital investment.
Common Financing Options Include:
- Traditional Bank Loans
- Small Business Administration (SBA) Loans
- Investors
- Personal Savings
- Crowdfunding
- Partnerships with Lenders Specializing in Restaurants
Follow the following link for more information about restaurant financing.
Step 5. Select a restaurant location
When deciding on a location, make sure it fits your restaurant’s target market. Key factors such as foot traffic, competition nearby, local demographics, and parking options are crucial for attracting customers.
Do comprehensive market research to understand local preferences, and select a location that encourages your restaurant’s growth and enhances customer satisfaction.
Step 6. Apply for licenses and permits
Opening a restaurant in Illinois requires obtaining various licenses and permits to comply with state and local regulations. These permits can be issued federally, by the state of Illinois, or locally by city and county authorities. Below are the key licenses and permits you’ll need to start your Illinois restaurant.
1. Registering your restaurant
Before you can apply for the necessary licenses and permits, you need to register your business with the Illinois Secretary of State. You must choose a business entity type, such as an LLC or corporation, and file the required paperwork.
2. EIN (Employer Identification Number)
An EIN, or Employer Identification Number, is required 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 permits you to legally conduct business within that jurisdiction.
Important Note: If your Illinois restaurant operates in multiple locations across different cities and counties, you must obtain a separate business license for each location.
Cost of a Business License in Illinois: The cost 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 IL and Certified Food Protection Manager
To ensure your restaurant complies with the Illinois Food Code, you’ll need to obtain a food license in Illinois, also known as a food establishment permit. Your restaurant must have a Certified Food Protection Manager (CFPM) who has passed a certification exam accredited by the American National Standards Institute (ANSI) and the Conference for Food Protection (CFP). This manager is crucial for overseeing food preparation and ensuring compliance with safety standards to help prevent foodborne illnesses.
Important Note: All food handlers in Illinois are required to participate in a food handler training program and obtain an Illinois food handler card to work in food service establishments. Training can be completed through approved external providers or internal training programs sanctioned by the Illinois Department of Public Health.
In addition to traditional food service establishments, these requirements extend to retail food stores that prepare and serve ready-to-eat food. Obtaining a food handlers card is mandatory for all employees handling food to ensure that they are knowledgeable about proper food safety practices.
Online training options are available to make it convenient for staff to complete their certifications, providing flexibility to fit their schedules and ensuring that your restaurant maintains high standards of food safety compliance.
5. Food Facility Health Permit
To operate a food service establishment in Illinois, 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, helping to prevent foodborne illness.
Important Note: Health permits are not transferable. A new permit must be obtained when opening a new restaurant, even if the location was previously occupied by another restaurant.
Cost of a Food Facility Health Permit in Illinois: Fees vary depending on the city or county. They can 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 Illinois. 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. Additionally, you may need to secure building permits for any construction or renovations to ensure compliance with local codes.
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 Illinois 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 Illinois Liquor Control Commission (ILCC). This permit allows you to legally sell alcohol on or off the premises, depending on the type of license you apply for.
Important Note: Licenses must be renewed annually, and failing to pay the renewal fee on time can result in the expiration of the license.
Step 7. Create your menu
Creating a restaurant menu involves choosing a variety of dishes that align with your restaurant’s theme and cater to your target customers. Use menu engineering principles to maximize profitability and enhance customer satisfaction.
Step 8. Build your team
Your most valuable resource in running a restaurant in Illinois is your staff. Invest time and effort in finding, hiring, training, and retaining the best employees for your establishment.
Offer thorough training, competitive wages, and benefits like health insurance to reduce employee turnover. This strategy will help you maintain a stable and satisfied workforce.
Ensure that every food worker, especially those primarily engaged with ready to eat food, has the opportunity to receive training at their own pace. It is essential for Illinois food handlers to be well-prepared, and having food handlers working efficiently will greatly contribute to your restaurant’s success.
Step 9. Purchase equipment
When purchasing equipment for your restaurant in Illinois, consider the state’s diverse climate conditions, from the humid summers in the southern regions to the colder winters in the northern areas. The specific needs for kitchen equipment can vary greatly depending on your restaurant’s location.
Ensure that the equipment you select is suitable for your restaurant’s particular environment to maintain optimal performance and longevity. Additionally, prioritize energy-efficient models to comply with Illinois’ environmental regulations and to reduce long-term operational costs for your restaurant.
Step 10. Prepare a marketing plan
Creating a comprehensive restaurant marketing plan for opening in Illnois 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
To create buzz around your restaurant’s debut, it’s vital to host both soft and grand openings. Implement innovative grand opening ideas, such as themed parties, exclusive tasting events, or collaborations with local influencers, to boost your restaurant’s visibility and draw in a diverse crowd excited to try out your new offerings.
Follow the link for creative grand opening ideas for restaurants.
Step 12. Create a restaurant website
Today, having a strong online presence is indispensable for any restaurant. Your restaurant’s website is your digital business card, so it’s essential to maintain and refresh it consistently. With the UpMenu restaurant website builder, you can easily build a professional website using templates tailored for restaurants, all without needing technical skills.
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 Illinois requires obtaining several licenses and permits, including a Food Facility Health Permit, a Seller’s Permit for sales tax collection, and a Business License. It is crucial to comply with local, state, and federal regulations concerning food safety, health standards, and, if applicable, alcohol service.
- Start by selecting a restaurant concept and drafting a comprehensive restaurant business plan. This plan will serve as a roadmap for operations, marketing, and financial success, guiding you through Illinois’ licensing and permit application process.
- In your financial projections, consider the integration of restaurant technology, such as a food ordering system and a POS system. These tools can help optimize operations, enhance customer experience, and streamline various processes.
- Prepare a detailed marketing plan and consider different restaurant promotion ideas, with a strong focus on restaurant social media marketing, to ensure success in running your restaurant.
Frequently Asked Questions (FAQ)
How Much Does It Cost to Start a Restaurant in Illinois?
Starting a restaurant in Illinois typically costs between $150,000 and $800,000, depending on location, size, concept, and amenities. Expenses include leasing or buying space, renovations, equipment, permits, licenses, initial inventory, marketing, and staffing. Costs can vary widely, especially between urban centers like Chicago and smaller towns. Adhering to Illinois commercial kitchen requirements is also necessary.
What Permits Do I Need to Sell Food in Illinois?
To sell food in Illinois, 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: This is 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. Check with the Illinois Department of Revenue and the Illinois Department of Public Health for details.
How Much Money Should You Have to Open a Small Restaurant in Illinois?
Opening a small restaurant in Illinois typically requires an investment of $40,000 to $450,000, depending on various factors such as location and size. Maintaining positive cash flow is essential.
How Profitable Is Owning a Restaurant in Illinois?
On average, restaurants in Illinois 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 Illinois commercial kitchen requirements is key to operating a successful restaurant in the state.
