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How to Start a Restaurant Business

What it takes to legally start a restaurant business in the US — licensing, structure, EIN, taxes, insurance, and your first customers. The steps are the same everywhere; the forms and fees depend on your state, so pick yours below for the exact links.

Typical startup cost
$95,000–$500,000+ depending on buildout and whether you take over an existing space
Licensing
state + local — varies
Best structure
LLC for most
First customers
referrals + local search

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  1. Check the licensing for restaurant work

    Health department permit and inspection, food manager and handler certifications, a certificate of occupancy, sign and grease-trap permits, and — if you serve alcohol — a state liquor license that can take months and cost thousands. This is the part that varies most by state — some require a state license or registration before you can advertise, others leave it to the city or county. Confirm both your state board and your local government before you take a job.

  2. Decide what the business needs to open

    A dine-in, fast-casual, or takeout restaurant in a fixed location. The setup areas that usually matter for a restaurant business: Business license + health permit + food handler certs, Certificate of occupancy + build-to-code, Liquor license (if serving alcohol), POS, payroll, inventory systems, Lease negotiation. Typical cost to get operational: $95,000–$500,000+ depending on buildout and whether you take over an existing space.

  3. Pick a structure — sole proprietor or LLC

    You can start as a sole proprietor with no filing, or form an LLC (usually $50–$300 depending on your state) for liability protection. For hands-on trade work where something can go wrong on a customer's property, most owners choose the LLC.

    LLC filing fee and steps by state ↗

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  4. Get a free EIN from the IRS

    An Employer Identification Number is free and takes a few minutes online. You need it to open a business bank account and to hire.

    IRS — Apply for an EIN ↗

  5. Register for state taxes and get insurance

    Register with your state's tax agency if you'll collect sales tax, then line up general liability insurance — most contracts and license boards require proof of coverage.

  6. What restaurant businesses charge

    Menu built to a target prime cost (food + labor) under 60% of sales, food cost 28–35%. Average check and table turns per night are the numbers that decide viability, not just headcount. Local, weather- and season-sensitive, and heavily reputation-driven in the first 90 days. Google reviews, a strong soft opening, delivery-app presence, and local press set the trajectory.

  7. Get your first restaurant customers

    A strong soft opening, Google + reviews, third-party delivery apps, and local press. Prime cost (food + labor as a % of sales) makes or breaks a restaurant — target under 60%. The first 90 days set your local reputation.

    Getting customers for a restaurant business ↗

  8. The mistake most first-year restaurant owners make

    Signing the lease before running the numbers on prime cost and break-even covers. Location and buildout excitement sinks more first restaurants than bad food — know your nightly break-even before you sign.

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Frequently asked

How do I start a restaurant business?

Check the licenses for restaurant work in your state, pick a structure (sole proprietor or LLC), get a free EIN from the IRS, register for state taxes, open a business bank account, get general liability insurance, then set up a Google Business Profile and line up your first jobs. The order and the exact forms depend on your state.

Do I need a license to start a restaurant business?

Health department permit and inspection, food manager and handler certifications, a certificate of occupancy, sign and grease-trap permits, and — if you serve alcohol — a state liquor license that can take months and cost thousands.

How much does it cost to start a restaurant business?

Plan for $95,000–$500,000+ depending on buildout and whether you take over an existing space to get operational, plus $50–$300 if you form an LLC (varies by state). An EIN is free, and general liability insurance runs a few hundred dollars a year for most solo operators.

What should I charge for restaurant?

Menu built to a target prime cost (food + labor) under 60% of sales, food cost 28–35%. Average check and table turns per night are the numbers that decide viability, not just headcount.

How much do restaurant businesses make?

It depends on your rates, your utilization, and your area. See the income and pricing breakdown for a restaurant business for typical owner take-home and what to charge.

How much does a restaurant business license cost?

It depends on your state and exactly which license applies — a state professional license commonly runs $50–$300 plus any exam or renewal fee, and a local city/county business license is often another $25–$100. That's separate from the $50–$300 LLC filing fee if you form one. Use the License Finder tool with your state for the exact fee for restaurant work.

How much does restaurant business insurance cost?

General liability insurance for a solo restaurant operator typically runs $300–$800 a year, more with commercial auto coverage or a higher liability limit. Most contracts, landlords, and license boards require proof of coverage before you can start.

Where do the first restaurant customers come from?

A strong soft opening, Google + reviews, third-party delivery apps, and local press.

Official sources

Fees and timelines are commonly-cited figures last reviewed September 2026 and can change — always confirm on the official site. This is educational information, not legal or tax advice.

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AI-generated guidance is for educational purposes only and is not legal, tax, or investment advice. Disclosures · Trust center