By Menu & Margin editorial team · Published · Updated
Opening a restaurant
A practical path for first-time owners: entity and tax IDs, permits, funding, build-out, and equipment—written as checklists with links to official sources.
This is operational guidance for independent owners, not legal, tax, or licensing advice. Requirements vary by state, county, and city. Confirm every item with the issuing agency and your attorney or CPA before you spend money or sign a lease. Permit table: Licenses & permits.
What is this opening section for?
A working path for opening your first restaurant in the United States, with California called out where state examples help: sequence the work, fill a startup-cost worksheet with your numbers, and buy tech in an order that won’t strand you on soft-open week.
What is the opening sequence?
- Concept & numbers — menu sketch, service style, rough labor and food-cost model, and a lease or purchase target you can actually fund.
- Entity & tax IDs — form the business, get an EIN, register for state/local tax accounts.
- Site control — LOI/lease or purchase; confirm zoning and change-of-use before non-refundable deposits where possible.
- Health, building, fire, signage — plan review, permits, inspections; liquor if applicable (often the longest lead time).
- Build-out & equipment — GC, hood/fire suppression, cold/hot line, dining room, POS/network.
- People & vendors — managers, opening crew, payroll setup, food distributors, linen, waste, pest.
- Soft open → open — friends-and-family service, fix tickets and ticket times, then public open.
Startup cost worksheet
Enter dollar estimates from your bids, lease, and local fee schedules. We do not invent national “average” build-out or permit prices here—those vary too widely by city and concept. Where an official source publishes a fee, use that agency’s schedule for your address.
California examples for fee lookups (not amounts): CA SOS Business Entities, CDTFA registration, CA ABC, LA County EH Food (other counties publish their own plan-review fee tables). IRS EIN application is free: IRS EIN.
Totals stay in your browser only—nothing is uploaded. Revisit after each bid revision.
What tech to buy first
Buy in an order that unlocks the next step. Software bought out of sequence usually sits unused through soft open.
- Entity, EIN, and business banking — before any vendor contract. You need a legal payer and a business account for deposits and payroll. (See permits checklist below.)
- POS + payments — before menu engineering freezes. Cabling, terminals, tax/tip config, and kitchen routing must exist for soft open. Compare options in Front of house / Toast vs Square / Toast / Square.
- Payroll (and timekeeping) — before the first training shift. Tip reporting and multi-rate jobs break if you improvise in a spreadsheet. See People / Gusto / Toast Payroll.
- Scheduling — as soon as you have more than a handful of staff or overlapping shifts. Policy first, tool second. 7shifts / Homebase.
- Inventory / invoice capture — after you can close a week on paper counts. Buying inventory software before weekly counts exist rarely sticks. See Back of house / MarketMan / xtraCHEF.
- Online ordering, loyalty, reservations — after the dining room can execute tickets cleanly. Don’t add channels that amplify a broken pass.
- Accounting close process — chart of accounts and bookkeeper cadence before month two. Calculators in Money help you set targets; they don’t replace books.
Which licenses and permits apply?
General U.S. pattern with California examples. Your county environmental health department and city planning/building desks are usually the authoritative local sources. Condensed table with official links: Licenses & permits page.
Business entity
- Choose and form an entity (often LLC or corporation) with your state. California: start at the California Secretary of State Business Entities desk.
- Adopt an operating agreement / bylaws; open a dedicated business bank account.
EIN (federal tax ID)
- Apply for an Employer Identification Number with the IRS (free): IRS EIN online application.
Seller’s permit / sales tax
- Register to collect sales tax where required. California: CDTFA business registration (seller’s permit and related accounts).
Health permit & plan review
- Submit kitchen plans to the local environmental health agency before construction when required; schedule construction and pre-opening inspections.
- Example (Los Angeles County): LA County Environmental Health — Food.
Food handler / food manager certificates
- Many jurisdictions require food-handler cards for staff and a certified food protection manager for the facility. California’s statewide food-handler rules are summarized by the California Department of Public Health Food Handler Card page—confirm your county’s accepted providers.
Liquor license (if serving alcohol)
- State alcohol control agencies issue licenses; timelines are often months, not weeks. California: California ABC.
- Ask early whether you need a new license, transfer, or premises change.
Building, fire, signage, occupancy
- Building permit / change of use through city or county building.
- Fire department review (hood suppression, exits, occupancy load).
- Sign permits and sidewalk / outdoor dining permits where applicable.
- Certificate of occupancy (or equivalent) before public service.
Funding basics
- Map sources: owner equity, SBA-backed loans, conventional bank debt, equipment financing, landlord TI. For SBA product overviews see SBA loans.
- Read our operator guide: Buying a restaurant with an SBA 7(a) loan.
- Underwriters usually want a use-of-funds schedule (your worksheet above), personal financial statement, tax returns, and a realistic opening P&L—not a vanity revenue slide.
Build-out & equipment
- Confirm hood, grease interceptor, and grease trap requirements with health/building before ordering equipment.
- Separate “must have for health sign-off” from “nice for ticket times.”
- Network and POS cabling before finishes; dead drops are expensive to add later.
- Front-of-house systems decisions live in Front of house; kitchen inventory and KDS in Back of house.
Frequently asked questions
- What should a first-time California opener do first?
- Sequence entity and EIN, then site control, then health/building/fire (and liquor early if needed). Fill the startup-cost worksheet with your bids—not national averages—and buy POS before soft open.
- Where do permit fee amounts come from?
- From each issuing agency’s fee schedule for your address. We link official portals and do not invent national price ranges. See the licenses table for agency links.
Related tools & guides
Menu & Margin does not provide legal or tax advice. Licensing rules change; always verify on the issuing agency’s site for your address.