How to start a Food Business: Registration and Licenses Needed!

So, you’ve finally decided to quit your job and start a food business like a restaurant or cafe.

We are assuming that you have a solid, unique concept and enough funds to invest in your new venture. You might have already found the perfect location to set-up your restaurant and even pitched your food business plan to sponsors and investors and have got a positive response. But what about permits and licensing?

Well, the process of acquiring all the necessary food permits and licenses is harder than you think. To get your restaurant licensed and registered, you need to complete a lot of paperwork. It may take a long time to get approval, so have patience.

Here are the permits and licenses you need to open a restaurant.

Business license – If you want to operate any business in the United States, having a business license is crucial. With this license, you can legitimize your food business as a legal organization. However, depending on where your restaurant is located, you may have to pay a yearly fee or some percentage of your total sales. For example, if you want to serve alcohol at your restaurant, you need to get a state business license and a federal business license. To obtain a business license, you need to pay a registration fee of approximately $50 and the cost of the license, ranging from $25 to $7,000.

Certificate of occupancy – A certificate of occupancy will be issued by the local building or zoning department in your city after your restaurant location cleared the final building inspection. This certificate verifies that your building is in compliance with the construction and maintenance standards. The certificate of occupancy usually costs $100, which may vary depending on your business.

EIN – Employer Identification Number – Besides a business license, you must also acquire an Employee Identification Number to open your business in the United States. This certificate is assigned by the IRS, which is almost like a tax ID number. When obtaining an Employee Identification Number, you need to have some patience. This is because the IRS issues one EIN per day.

Food service license – To obtain food service licenses, you’ll need to approach the health department in your city or county. The officials from the health department will personally visit your restaurant to ensure that you comply with all restaurant food safety regulations. Even though you obtain this license, the health department in your city may visit your restaurant any time for inspection. Now, you must be wondering what if I fail an inspection? Well, in such a case, you may end up stripping away your food service license.

Music license – If you’re also looking to play music at your restaurant, then don’t forget to get a music license to prevent copyright infringement in the future. This license covers any type of music, such as live music and music from a streaming service or CD. If you don’t have a music license, the authorized artist or singer can sue you for playing copyrighted music, and the penalty may range from $750 to $30,000.

Permit for a sign – Of course, you need a sign outside your restaurant to draw the attention of your potential customers. But before putting up any signs, you will need to obtain a sign permit from the government in your city. You must keep in mind the specifications related to a sign, such as the size, lighting, and location, as they vary from one city to another.

Liquor license – If you’re planning to serve alcohol at your restaurant, you must apply for a liquor license. In some states, business owners are required to obtain licenses for both liquor, beer as well as wine. It may take a few months to receive a liquor license from the government’s liquor control board of your city. Therefore, it is recommended to start the application process as early as possible.

Valet parking permit – Are you planning to open a fine-dining restaurant? If yes, then you must think about offering your guests with valet parking. This is not only convenient but also gives your guests a piece of mind that their vehicle is safe. Hence, they can enjoy their food worry-free. In many states, businesses are required to apply for a valet parking permit to offer their customers a parking space.

Live entertainment license – If you want to host live entertainment events at your restaurant, then having a live entertainment license is important. This license covers any type of entertainment you want to host in your restaurants, such as dance, concert, exhibition, public show, or cabaret.
The bottom line

These are just a few of the primary permits and licenses that you require to legally operate a restaurant in the United States. Please remember, the regulations and laws for obtaining each license may vary depending on your city, county, and state. Lastly, be ready to wait, as it may take 2-3 months or longer to obtain the required licenses and permits for your restaurant.