Fast food restaurant, café, or food truck; If you are opening a restaurant you will need to get your hands dirty and do a fair amount of work.
In this article, we will cover the following:
- How to choose your restaurant’s concept?
- How to write a restaurant business plan?
- How to select the right restaurant food ordering system?
- How to secure financing?
- How to select the right location?
- How to get all the necessary licenses and permits?
- How to create a menu that works?
- How to create a restaurant website?
- How to hire effectively and build a strong team?
- What to keep in mind when purchasing equipment?
- How to prepare a restaurant marketing plan?
- Soft or grand opening?
Opening a restaurant is fairly similar, no matter where you are. Here’s a simple guide on how to open a restaurant in NC.
Step 1. Choose your restaurant concept
Decide on the type of restaurant you want to open. Consider the cuisine, ambiance, and target audience.
Think about the food you want to serve and how you will prepare it. Identify the customers you want to attract and the number of employees you need. Decide if you want a full-service dining experience or a takeout counter with limited seating.
- Fine Dining: A high-end restaurant offering gourmet cuisine, elegant ambiance, and exceptional service. Learn more about what is fine dining here.
- Fast Food restaurants offer quick-service meals, typically through a drive-thru or counter service, and focus on efficiency and convenience. Learn about how to open a fast food restaurant.
- Fast Casual: Combines the speed of fast food with the quality of casual dining, often featuring customizable meals and healthier options. Learn more about what is a fast casual restaurant.
- Ethnic cuisine: This specialty specializes in authentic dishes from a specific region or country, such as Italian, Mexican, Thai, or Indian cuisine.
- Food Truck: Mobile kitchens offering a variety of street foods, ranging from tacos and burgers to gourmet sandwiches and desserts. Learn about how to start a food truck business .
- Bistro: Offers light meals, sandwiches, salads, and beverages in a cozy, casual setting, often emphasizing coffee or tea. Learn more about what is a bistro restaurant.
- Vegetarian or Vegan: Specializes in plant-based dishes, catering to vegetarians and vegans seeking meat-free options.
Step 2. Write a restaurant business plan
The next step in starting a restaurant in California is to create a business plan. Start with an executive summary of a restaurant and then outline your restaurant’s mission, vision, target market, financial projections, and operational strategy.
Make sure to pick the right business type before writing a detailed restaurant business plan.
- Sole Proprietorship: Owned and operated by one person. It’s simple but offers no legal separation between the owner and the business.
- Partnership: Owned by two or more individuals. Partners share profits, responsibilities, and liabilities.
- Limited Liability Company (LLC): Offers a mix of partnership simplicity and corporate liability protection. It’s good for small to medium-sized restaurants.
- Corporation: Provides separate legal status from its owners, with strong liability protection but involves more formalities and potential double taxation for C corporations.
- S Corporation: Similar to a regular corporation but with pass-through taxation, which helps avoid double taxation while maintaining liability protection.
For a first-time restaurant owner, the most likely type of business is a Limited Liability Company (LLC). Small restaurants often start with this structure due to several advantages that align well with the needs of a new business.
- Simplicity and flexibility: LLCs are relatively easy to establish and offer flexible management structures. This makes them an attractive option for new restaurant owners who may not have extensive experience with business administration.
- Personal liability protection: An LLC provides a shield for personal assets, protecting the owner’s personal finances from business debts and liabilities. This is crucial for small business owners who want to minimize their personal financial risk.
- Tax benefits: LLCs offer pass-through taxation, which means business profits are reported on the owner’s personal tax returns, avoiding the double taxation that can occur with corporations. This simplifies tax filing and can result in significant tax savings.
- Fewer formalities: Compared to corporations, LLCs have fewer regulatory requirements and paperwork, which makes them easier to manage day-to-day.
- Suitability for growth: LLCs can easily accommodate growth and changes in the business, such as bringing in additional owners or expanding to multiple locations.
As you’ve probably guessed, one of the key benefits of forming an LLC is the protection it provides from personal liability. If your restaurant faces a lawsuit for reasons like unpaid bills or violations of dram shop laws, you won’t be personally responsible for any resulting debts or liabilities.
Step 3. Research restaurant software
While writing your business plan, think about the technology you will need for your restaurant. Getting the right restaurant management software is key to ensuring your business runs smoothly.
The starting point should be a food ordering system. Consider one that allows you to manage all of your restaurant operations from ordering to payments and deliveries.
- Minimal or no transactional fees: Third-party solutions like Uber Eats and GrubHub can take up to 30% of a restaurant’s revenue in commissions. Look for systems that prioritize growing your brand without punishing you with ever-increasing 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 both in-house and online ordering systems.
- Menu management: Easily update and customize your menu items, including prices and descriptions. The software should allow for quick adjustments, such as adding seasonal specials or changing item availability, and should sync across all platforms.
- Website & mobile app: Provide a user-friendly website and mobile app for customers to view your menu, place orders, and make reservations. This should enhance the customer experience and provide a seamless interface for online interactions.
- Loyalty system: Implement a loyalty program that rewards repeat customers with points, discounts, or special offers. The software should track customer purchases and automatically apply loyalty rewards, encouraging repeat business and customer retention.
- 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
Securing restaurant financing means covering significant startup costs like leasing or purchasing a space, buying equipment, making renovations, acquiring initial inventory, and hiring staff. These expenses can vary greatly but usually require a considerable capital investment.
Common sources of financing include:
- Traditional bank loans
- Small Business Administration (SBA) loans
- Investors
- Personal savings
- Crowdfunding
- Partnerships with lenders specializing in the restaurant industry
Follow the following link for more information about restaurant financing.
Step 5. Select a restaurant location
When choosing a location consider whether it matches your restaurant’s target market. Key factors like foot traffic, nearby competition, local demographics, and parking availability play a crucial role in attracting customers.
Conduct market research to understand local preferences and select a location that fosters your restaurant’s growth and enhances customer satisfaction.
Step 6. Apply for licenses and permits
Opening a restaurant in North Carolina requires several licenses and permits to comply with state and local regulations. These permits can be issued federally, by the state of North Carolina, or locally by city and county authorities.
Below are the key licenses and permits you’ll need to start your restaurant business in North Carolina.
1. Registering your restaurant
Registering Your Restaurant Before you can apply for the necessary licenses and permits, you need to register your business with the North Carolina Secretary 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)
EIN stands for Employer Identification Number. The IRS assigns businesses and entities a unique nine-digit number for tax reporting purposes.
3. Business License
You need a general business license (also known as a Business Tax Certificate) from the city or county where your restaurant will operate. This license allows you to operate a business legally within that jurisdiction.
Important Note: If you operate a restaurant with multiple locations in various cities and counties, you must obtain a separate business license for each location within its respective jurisdiction.
How Much Does a Business License Cost in North Carolina?
The cost of a business license in North Carolina varies depending on several factors, including the location of your business and the type of business you operate.
Typically, business license fees range from $50 to several hundred dollars per year. Some cities and counties may also impose additional fees or taxes based on gross receipts or other criteria.
4. Food Handler’s License in North Carolina
In North Carolina, food service employees, such as restaurant workers, chefs, and food servers, must complete a food safety training course approved by the North Carolina Department of Health and Human Services (NCDHHS). Upon completion, employees receive a Food Handler’s Card, which certifies that they have the necessary knowledge to handle food safely.
5. Food Facility Health Permit
To operate a restaurant in North Carolina, you must obtain a Food Facility Health Permit from the local health department. This permit ensures that your restaurant complies with health and safety regulations regarding food storage, handling, preparation, and sanitation.
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.
What is the Cost of a Food Facility Health Permit in North Carolina?
The cost of a food facility health permit in North Carolina varies depending on the city or county where the restaurant is located. Fees can range widely, typically from several hundred to over a thousand dollars annually.
For specific information on permit fees, you can check with your local health department in North Carolina.
6. Certificate of Occupancy
A Certificate of Occupancy (CO) is required to operate a restaurant legally in North Carolina. 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 before opening to the public.
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 North Carolina 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 North Carolina Alcoholic Beverage Control Commission. 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 failure to pay the renewal fee on time can result in expiration of the license.Step 7. Create your menu
Creating a restaurant menu requires selecting a variety of dishes that reflect your restaurant’s concept and appeal to your target audience.
Use menu engineering principles to maximize profitability and enhance customer satisfaction.
Step 8. Build your team
Your most valuable resource in running a restaurant 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.
Step 9. Purchase equipment
When purchasing equipment in North Carolina, take into account the diverse climate conditions across the state, from the humid coastal regions to the cooler mountain areas. The specific needs for kitchen equipment may vary depending on your restaurant’s location.
Ensure that the equipment is appropriate for your restaurant’s specific environment to maintain optimal performance and longevity.
Additionally, energy-efficient models should be prioritized to comply with North Carolina’s environmental regulations and to reduce long-term restaurant costs.
Step 10. Prepare a marketing plan
Creating a comprehensive restaurant marketing plan for opening in North Carolina 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
Hosting both soft and grand openings is essential for creating buzz and excitement around your restaurant’s launch.
Incorporate creative grand opening ideas for restaurants, such as themed events, exclusive tastings, or collaborations with local influencers, to maximize visibility and draw in a diverse audience eager to experience your new dining concept.
Step 12. Create a restaurant website
In today’s world, having a strong online presence is essential for any restaurant. Your restaurant’s website serves as your digital business card, so it’s important to maintain and update it regularly.
With the UpMenu restaurant website builder, you can easily create a professional website without needing technical skills, thanks to its ready-made templates designed specifically for restaurants.
To help you get started, we’ve prepared a step-by-step guide on how to create a restaurant website.
Once your restaurant website is set up, you can begin selling online.
Key Takeaways
- Opening a restaurant in North Carolina requires obtaining various licenses and permits, such as a Food Facility Health Permit, Seller’s Permit for sales tax collection, and a Business License.
- Ensure compliance with local, state, and federal regulations governing food safety, health standards, and alcohol service if applicable.
- Always start with choosing a restaurant concept and writing a detailed restaurant business plan to ensure that you have a clear roadmap for operations, marketing, and financial success before proceeding with North Carolina’s licensing and permit application process.
- Include in your financial projections the usage of restaurant technology (like an online ordering system and POS system) to optimize operations, enhance customer experience, and streamline processes.
- Prepare a detailed marketing plan and consider different restaurant promotions ideas focusing particularly on restaurant social media marketing, to succeed in running a restaurant.
Frequently Asked Questions (FAQ)
How much does it cost to start a restaurant in North Carolina?
The cost to start a restaurant in North Carolina can vary widely depending on several factors such as business location, size, concept, and amenities. Generally, entrepreneurs should budget between $150,000 to $800,000 or even more to cover expenses like leasing or purchasing a space, renovations, equipment, permits and licenses, initial inventory, marketing, and staffing. Serving food in a competitive market might require additional considerations.
What permits do I need to sell food in North Carolina?
To sell food in North Carolina, you typically need the following permits and licenses:
- Business License
- Food Facility Health Permit
- Seller’s Permit
- EIN (Employer Identification Number)
- Food Handler’s License
- Certificate of Occupancy
- Liquor License Permit (if you plan to serve alcohol)
Additionally, you may need to obtain temporary permits for certain events or special circumstances. Ensure you have detailed information about each requirement and submit plans for approval when necessary.
How much money should you have to open a small restaurant in North Carolina?
The initial investment required to open a small restaurant can vary significantly depending on factors such as location, concept, size, and amenities. As a rough estimate, expect to invest anywhere from $40,000 to $450,000 or more to launch your small restaurant successfully. Maintaining a positive cash flow is crucial for ongoing operations.
How profitable is owning a restaurant in North Carolina?
According to various industry reports, restaurant profits can vary, but on average, restaurants typically earn between 2% to 6% more than their expenditures. Restaurants with lower overhead expenses or initial startup costs may achieve higher profitability. Factors such as the business structure, ability to serve alcohol, and inclusion of amplified entertainment can significantly impact profitability. Building inspections and renewals should be managed effectively and renewed prior to expiration to ensure smooth operations. For more detailed information on profit margins and tips, apply online to access relevant resources.
