How to Open a Restaurant in 11 Steps

by | Mar 1, 2023

How to open a restaurant

Opening a restaurant can be a challenging yet rewarding experience. If you’re looking to turn your culinary passion into a thriving business, you might be wondering how to open a restaurant. Fortunately, this article, will provide you with the essential steps on how to open a restaurant in 11 easy-to-follow steps. By following the right path, you can save time and increase your chances of success. So, let’s get cooking!

1. Design Your Restaurant Concept

Designing the restaurant concept is the first step in learning how to start a restaurant. This involves determining the type of food you will serve, the atmosphere you want to create, and the style of service you’ll offer. Getting this right is essential since it will influence the subsequent steps of finding a suitable venue and creating a comprehensive business plan. It is important to carefully consider each aspect of your restaurant concept before moving forward.

One key element of your restaurant concept is choosing a name. It’s best to do this during the concept design stage, as it’s crucial for creating a strong brand identity. Your restaurant name should be memorable, easy to pronounce, and reflective of your restaurant’s personality and cuisine. Taking the time to choose the right name can help you stand out from the competition and attract customers to your establishment.

2. Find a Location to Open a Restaurant

As you learn how to open a restaurant, it’s important to understand that it is not only just about food. Finding the right location is a crucial part of the process. To do this, start by considering the restaurant concept and your target market. It’s important that your restaurant’s concept fits the location you choose.

For example, if you’re opening a fine dining restaurant, you’ll want to choose a location that’s upscale and has a sophisticated atmosphere. On the other hand, if you’re opening a casual eatery, a location with a relaxed vibe might be more suitable. By taking the time to carefully consider your location, you can increase your chances of success and ensure that your restaurant is a hit with customers.

Street map of Golden Square

It’s important to evaluate the surrounding neighborhood, potential foot traffic, and accessibility of the location. If the location is not in a walkable area, available parking should also be considered.

Rent will be one of the most significant expenses in running your restaurant, so it’s important to evaluate this cost when choosing a location. This should be factored into your overall business plan. Additionally, be sure to consider the cost of designing and building the interior if the space is an empty shell known as a “white box” or the cost of renovating and repairing an existing restaurant you won’t change.

Choosing the right location can have a significant impact on the success of your restaurant, so it’s essential to take the time to research and find the perfect spot. By doing so, you can increase your chances of success and create a restaurant that customers will love.

3. Write a Business Plan

One of the essential steps in learning how to open a restaurant is creation of a comprehensive business plan. It is the foundation to start a successful restaurant. Your business plan should include the concept of your restaurant, the type of food you will serve, and your target market.

Include market research in your business plan. Provide details of the population in the geographic area you will serve. List the population’s size, age, and income level so you can anticipate the behavior of potential customers. 

Moreover, your market analysis should include the size and strength of the competition. Analyzing the quality of food and prices offered by your competition will help you set reasonable prices for your restaurant’s food.

Financial projections are another crucial part of your business plan. Estimate the restaurant’s costs, such as rent, utilities, labor, food and beverage, liquor licenses, marketing expenses, and other overhead costs. Based on the total projected costs, you will see how much income you need to generate before you can earn a profit.

Writing a well-crafted business plan will help you secure financing to continue operations. However, it can be a difficult and time-consuming task. If you need assistance, consider taking a business writing course and use an AI writing tool to create a well written business plan.

Remember to revisit and update your business plan as your restaurant grows and evolves. This will help you stay on track and achieve your goals.

4. Form a Business Entity

It is important to consider formation of a business entity when you think about how to open a restaurant. Forming a business entity such as a limited liability company (LLC) or corporation that will operate the restaurant is meant to protect your personal assets and limit your liability. To determine the most suitable business structure for your specific needs, it’s recommended to seek advice from a lawyer or accountant.

5. Apply for Tax Identification Numbers

Once you form a business entity, the next step is to apply for a Federal Employer Identification Number (EIN), which is also known as a Federal Tax identification number (TIN). This can be easily completed online at the IRS website. The number your restaurant is assigned will be required to open a bank account.

Form to Apply for EIN
Application for EIN

If the state where you start your contractor business charges corporate taxes, you also need to obtain a tax identification number from the state government. Be sure to research your state’s specific requirements for starting a restaurant business.

6. Open a Bank Account

Opening a restaurant requires proper management of finances. After obtaining an EIN, it is important to open a separate bank account dedicated to your restaurant business. This ensures that personal and business finances are kept separate, and restaurant’s cash flow is accurately tracked.

To secure additional funding, consider reaching out to investors or applying for loans from banks or other lenders. It is important to have a well-drafted business plan that outlines the concept of your restaurant, target market, marketing strategy, financial projections, and other key details. This can convince investors or lenders to invest in your business.

Before seeking funding, be sure to have a solid understanding of your restaurant’s financial needs and projections. Consider consulting with a financial advisor or accountant to help you create a realistic budget and financial plan that can help you manage your cash flow effectively. Remember, starting a restaurant can be risky, but with the right planning and support, it can also be a rewarding and successful venture.

7. Lease Space 

Once you have established your business entity and secured funding, the next step in learning how to open a restaurant is to lease a suitable space to run the business. You will need to select a location with adequate space to accommodate all the equipment and furniture required for your restaurant. When selecting a space, consider factors such as the size of the dining area, kitchen, storage area, and restroom facilities.

It’s important to negotiate a lease agreement that works for both you and the landlord. Be sure to review the lease agreement thoroughly and seek legal advice if necessary. You may be presented with a lease that requires you to pay the property taxes, insurance, and maintenance costs or has a provision that requires you to share a percentage of your restaurant’s profits. Those are factors to consider when calculating the overall cost of rent.

Remember, the location of your restaurant can play a significant role in its success. Make sure you find a suitable space that aligns with your restaurant concept, brand, and target market. With a well-planned location, your restaurant can attract and retain customers, creating a solid foundation for long-term success.

8. Obtain Permits and Licenses

Opening a restaurant requires obtaining several permits and licenses to operate legally. These permits and licenses ensure that your restaurant meets health and safety standards, and complies with local, state, and federal regulations.

One of the most critical permits you’ll need to obtain is a health permit. Health permits are issued by the city or county where your restaurant is located, and they ensure that your restaurant meets all health and safety standards. The process for obtaining a health permit may vary depending on your location, but typically involves an inspection of your restaurant’s facilities and operations.

If you intend to sell alcoholic beverages at the restaurant, you need to obtain a state liquor license. The cost of a liquor license varies depending on your state, with some states charging several thousand dollars for a license. It’s important to factor in the cost of a liquor license when budgeting for your restaurant’s start-up costs.

Additionally, you will need to obtain a local business license to operate legally. The process for obtaining a business license may vary depending on your location, but typically involves completing an application and paying a fee.

It’s important to research and understand all the permits and licenses required to open your restaurant. Failure to obtain the necessary permits and licenses can result in fines, closure of your restaurant, or even legal action. Consider working with a professional who can help guide you through the process of obtaining permits and licenses, and ensure that your restaurant meets all the necessary requirements. With the right permits and licenses in place, you can open your restaurant with confidence, knowing that you are operating legally and responsibly.

9. Get Business Insurance

Part of learning how to open a restaurant requires basic understanding of business insurance. Protecting your restaurant from potential liability is crucial for the safety of your employees, customers, and business as a whole. Obtaining insurance coverage is an essential step to mitigate any potential risks and liabilities that your restaurant may face.

Commercial general liability insurance can help protect your restaurant against claims for bodily injury, property damage, and personal injury. It can also cover legal costs associated with such claims.

If your restaurant has employees, you will need to obtain workers’ compensation insurance to cover medical expenses and lost wages in the event of a work-related injury or illness. Additionally, if your employees will deliver food for the restaurant, it’s crucial to obtain commercial auto insurance to protect your employees and your business in the event of an accident.

It’s also important to ensure that the space you rent and the equipment you purchase for your restaurant are covered for theft and damages. Property insurance can help cover the costs of repairing or replacing damaged property, including equipment, furniture, and fixtures.

To ensure that your restaurant is adequately protected, work with an insurance broker licensed in your state. They can provide guidance and advice on the necessary insurance coverage and liability limits for your restaurant.

10. Buy Equipment

Now that you have learned several administrative steps of how to open a restaurant, you can move forward with investing in quality equipment that will help you provide excellent food and service. This includes kitchen equipment such as stoves, ovens, and refrigerators. When selecting equipment, consider the needs of your restaurant and your budget.

If your restaurant has a dining area, invest in furniture and decorations that align with your restaurant’s concept and theme. Consider the durability of the furniture to avoid incurring expenses for repairs or replacements in the future.

Another critical piece of equipment to invest in is a point-of-sale (POS) system. A POS system allows you to input orders, manage inventory, and handle cash and credit card payments. Choose a POS system that can integrate with online orders from food delivery sites to streamline the order process and ensure accuracy.

Investing in quality equipment may require a significant upfront cost, but it can pay off in the long run by improving the efficiency of your operations and enhancing the overall dining experience for your customers.

11. Advertise Your Restaurant

As the last step of how to open restaurant, it’s time to focus on marketing it attract potential customers. Marketing your restaurant is essential for reaching customers and building a loyal following. Below are some tips to help you promote your restaurant:

Invest in High-Quality Photography

High-quality photos are essential for promoting your restaurant on your website, social media, menus, and other marketing materials. Consider hiring a professional photographer to capture your food and the ambiance of your restaurant.

Create a Website

In today’s digital age, having a website is critical for attracting and retaining customers. Your website should be visually appealing, user-friendly, and optimized for search engines. Consider including an online ordering system for added convenience.

Get Listed on Restaurant Review Sites

A Google business account is essential as it is the top restaurant search tool. Additionally, consider getting listed on popular restaurant review sites such as Yelp, Tripadvisor, Zagat, and OpenTable. These sites allow customers to leave reviews and ratings, which can significantly impact your restaurant’s reputation and visibility.

Leverage Social Media

Social media platforms such as Facebook, Instagram, and TikTok are great ways to reach potential customers. Share photos of your food, promotions, and events on your social media pages. Consider running targeted ads to reach specific demographics and boost engagement.

Engage with Your Customers

Respond to reviews and comments on your social media pages and review sites. Consider offering loyalty programs, promotions, and events to keep your customers engaged and coming back.

Remember that effective marketing takes time and effort, but the payoff can be significant. By promoting your restaurant on various platforms and engaging with your customers, you can build a loyal following and attract new customers to your establishment.


Congratulations on learning how to open a restaurant! Remember that opening any business is hardwork, but with hard work and dedication, you can achieve success. By following the 11 steps above, you’ll save yourself a considerable amount of time since you don’t have to figure out the steps how to open a restaurant!

About the Author

Jon Chen
Jon is a lawyer with more than 15 years of experience practicing law. His passion for music began when he was a child, which led him to learn how to play the piano, saxophone, trombone, and guitar. He enjoys analyzing music and helping others succeed and live a better life.