With so much planning involved when it comes to opening and running a restaurant, you don’t want to leave out applying for the necessary regulations of permits and licenses. Jumping over hoops and obeying the rules and laws can seem overwhelming, so following these steps can help put the heat back on the grill and not on your business.
Business License and Employee Identification Number
Just like most businesses it takes some paperwork and applications to secure your business is in fact a real business. Getting a business license is required by every business opened in the United States and although the application cost is usually inexpensive, depending on your state’s laws, the fees involved can vary. Along with the business license you must follow the IRS laws and regulations and obtain an EIN or employee identification number, to use for filing your taxes. This application can take a while to obtain so applying early can save you a lot of headache.
Building and Occupancy Permit
Your local government building department will issue the occupancy permit to show that the building is safe for your customers and employees to be in. It also shows that the building is an acceptable building for your restaurant and not meant for a residential space as an example. You may have a few different personnel from the building department who will do the various inspections including fire safety, electrical, and structural safety of your facility. You will need to gather a few important documents prior to your application, including your lease or property deed to begin the application process. They may also ask for the number of employees, what you will be using the space for, and your restaurant hours in the application too. The good thing about this permit is unless you do any structural changes or change owners of the restaurant, you will not need to update the permit or have any additional fees. This is not something you want to forget about, because if you do the city will likely fine you big time, and some instances the owners could get you put in jail so make sure this is on your check off list prior to opening.
Food Service / Vendor License
If you are a restaurant you will need a food service license, and if your restaurant operates as a food truck it will be called a food vendor license. Regardless of the title they both operate the same. They are administered by the county health department and is regulated by the U.S. Food and Drug Administration. With an inspection from the health department and even more once you open, you will want to make sure you follow the guidelines and regulations to keep in good standing with the agency. Your customers and the public pay close attention to the grades of the local restaurants.
This one depends on your preference to either serve or not serve alcohol. There is also a variety of subcategories when you are applying including a tavern license, beer and wine, and finally a restaurant license. A tavern license will have a large amount of the profits as alcohol sales, where a restaurant license would have most of its sales being food limiting the amount of alcohol sales. A beer and wine license strictly sell in addition to food, beer and wine alcohol only no liquor. Not only will your personally be held to a background check, you will also have to accompany the application with several other verifying documents. The cost for these licenses could cost you up to 400,000 so make sure you are coming up with all the appropriate funding for the licenses and permits needed you may want to make sure it is in your budget for your restaurant loan.
Music / Live Music Permit
Some restaurants want to have live or recorded music in their restaurant or bar atmosphere so they will be required to obtain a music permit. There are several factors that determine the cost for your specific permit, that may include but not limited to the size of your restaurant, how often it will be played, and whether it is live artist or played electronically, and if there is a cover charge etc. Depending on who the artist you are playing is licensed and associated with will determine who you will need the licensing through. There are 3 organizations that protect the artist, so when in doubt, it might be best to get all three to prevent any fines. They could reach fined amounts up to $750 per song that is played.
Food Handlers / Health Permit
This one is geared more towards your employee’s ability to know the laws and basic sanitation requirements for handling the food in your restaurant. These regulations will vary per state so researching your specific laws and rules will better prepare your employees for their exam they need to obtain the handlers permit. They must take the exam and print it out and could cost from $100-$500 and will usually not need to be renewed annually if your restaurant is in the same location from 3-5 years. You want to make sure you have a copy of the permit for every employee on file so it can be referenced quickly for any inspections the health department does.
Restaurants are highly regulated and require a lot of permits and licenses to ensure your complying with the governmental agencies that provide the public with assurance they are eating and drinking from safe establishments. Looking into the state’s guidelines for all the required licenses and permits will keep you ahead of fines and will keep your restaurant in business and avoiding the costly mistakes some owners make. No one wants to have to close their doors to the public for not filing their permits on time.