Follow These Steps to Open a Restaurant in California
So, you want to start your own business and decided a restaurant in California is just the business for you. Whether you’ve been thinking about this for a while now or just thought up this brilliant idea, you need to know more about all the steps to open a restaurant in California. There are many steps involved, all of them equally important, and you should have a good understanding of everything involved.
In this article, we will discuss these important steps to open a restaurant in California so you can get started with your dream of owning a business and doing it correctly. If you want to make a success of your business, it’s best to know as much as possible before starting off, and that’s why you’re here.
Without further ado, let’s look at all those steps.
Choose a Location
First, before we can start to go into detail about all the steps to open a restaurant in California, you need to have a location for your future business. The location of your restaurant is crucial and it will determine the kind of vibe your business has, as well as your potential profits. Think carefully about the type of restaurant you want, and then look at the prospective locations. Are there similar restaurants in the area already, or is there a gap in the market? You should also consider other factors like the average income of the local population and whether or not they’re your target market.
Create a Restaurant Business Plan
No business can run successfully without proper planning, and a well-designed business plan is essential. You’ll need to plan your restaurant concept, to start with. Will you have a diner-themed restaurant or something a bit more sophisticated? What kind of food and drinks will you serve? What will the overall theme of your restaurant be? The answers to these questions are important and will determine your business plan. Make sure your business plan is as detailed as possible so there’s no room for confusion.
Select a Business Structure
Once you’ve come up with a proper business plan, it’s time to move on to the next steps to open a restaurant in California. You’ll need to choose a business entity structure so you can register your business and keep things above board. There are several options to choose from, such as a sole proprietorship, a partnership, a corporation, or a Limited Liability Company (LLC). Research all your options and choose the structure that will work best for you and your plans for your restaurant. Once you’ve decided on a structure, you’ll be able to legally register your company.
Register Your Restaurant Name
The next step to take is registering your new restaurant’s name. If you already have an awesome name planned, you should determine if it’s been taken already. Sadly, it’s likely that all the best names are already taken, so make sure you don’t get excited about a name only for it to be registered by someone else. It may be a good idea to come up with several different ideas for a name to prevent disappointment. You’ll need to file a name reservation request with the California Secretary of State.
Work Out a Financial Plan
We can’t discuss the steps to open a restaurant in California without getting into the financial aspect of it all. You need to figure out a financial plan that will help ensure your business’ success. You will have to plan inventory costs, labor costs, the price of relevant licenses and permits, and other costs associated with opening and running a business. Costs like utilities must also be included in your restaurant’s financial plan. Also, it’s good to plan for unexpected costs and expenses in case something goes wrong or disaster strikes so you’re prepared and your business won’t fold or suffer greatly.
Get Restaurant Insurance
It’s unwise to run a restaurant without having really good insurance. You must have proper coverage already in place before you start hiring staff and open your doors. There are several different insurance coverage you’ll need, such as property insurance, commercial auto insurance, worker’s compensation, general liability insurance, and restaurant endorsement. You need to have this insurance ready in case your restaurant gets sued, faces natural disasters, or difficulties with customers or employees. Restaurant insurance can sometimes feel like a big expense, but it can save your business, so make sure it’s sorted as soon as possible.
Don’t Forget About Taxes
Business taxes can be quite complicated, but it’s something you can’t afford to ignore. As the owner of a restaurant, it will be your responsibility to fulfill various tax obligations. Here are some of the taxes you should familiarize yourself with:
Income Tax: Depending on the type of business you operate, you will need to file income taxes accordingly. As a sole proprietor, your business income tax will be filed along with your personal tax return. On the other hand, corporations and LLCs must file a separate business tax return.
Sales Tax: Governments impose sales tax on the sale of goods and services. In California, the sales tax rate is 7.25%, consisting of a 6% state sales tax and an additional 1.25% local tax. It is essential to include these taxes on every sales invoice. It’s important to note that there is no federal sales tax in the United States.
Payroll Taxes: Payroll taxes comprise two components: deductions from employee wages and the taxes you pay based on your employees’ earnings. These taxes cover Social Security, Medicare, and Federal Unemployment taxes for your employees.
Taxes on Tips: Many restaurant employees rely on tips as part of their income, and these tips are considered taxable. If your employees earn more than $30 per month in tips, they are classified as tipped employees and are required to report their tips as taxable income. If the total reported tips from all employees amount to less than 8% of your gross sales receipts, you are obligated to distribute the difference among the tipped employees.
Being aware of these various taxes and their implications will help you manage your restaurant’s financial responsibilities effectively.
Plan Your Restaurant and Kitchen Equipment
One of the other important steps to open a restaurant in California is getting all the right equipment. Your business plan will likely have helped you determine the tools and gear you need to be able to open your restaurant and keep it running smoothly. You can start off with the most essential equipment and later upgrade if you don’t have the capital you need at first. Just make sure you have all the essentials that you can’t run your restaurant without.
Hire and Train Employees
The next steps to open a restaurant in California are hiring the right restaurant workers to help run your restaurant and making sure they’re trained to do their jobs well. Every individual you employ will require training not only on the operational aspects of your restaurant but also on food safety protocols, along with obtaining a California Food Handler Certificate.
Keep in mind that California enforces a minimum wage policy. For businesses with fewer than 25 employees, the current minimum wage stands at $13 per hour. However, if your restaurant employs more than 25 individuals, the minimum wage rises to $14 per hour. It’s crucial to stay updated on any changes in the minimum wage requirements, so you should regularly review the expected minimum salary.
Create a Marketing Strategy
Once all the admin is taken care of, you can move to the other elements and steps to open a restaurant in California and make a success of it. You need to market your business, and it’s recommended that you work with experienced local social media marketing companies (social media marketing is highly successful) so you can focus more on running your business. Initial marketing efforts can include building a website, listing your restaurant on Google, and investing in paid ads.
Add Outdoor Seating
Outdoor seating is an awesome idea and will attract more customers. You should invest in high-quality outdoor wooden furniture so your customer can enjoy everything you have to offer outside when the weather allows it. You can even make the outdoor seating area a special thing with exclusive and unique attractions like a fire pit and so on, depending on the kind of restaurant you have.
Keep Pests Away
Pests are a restaurant’s biggest nemesis and you need to make sure you never have to fight against any critters. Hire bee & wasp removal services as well as other similar services to keep your restaurant bug- and pest-free. Implementing a comprehensive pest control management plan is crucial to minimize the risk of foodborne illnesses for customers. Neglecting to address critical factors that attract and provide habitats for pests can lead to their rapid multiplication and infestation.
Build a Storage System
Food storage is an essential aspect of restaurant operations, as it ensures food safety and safeguards public health by mitigating the risk of foodborne illnesses. Adhering to proper storage conditions is crucial to prevent contamination and spoilage of food items, so make sure you have ample and well-planned air conditioned storage.
Renovate Your Bathrooms
Your customers are more likely to enjoy their dining experience and return to your restaurant if the restrooms are well-maintained. Also, clean restrooms prevent the spread of germs and bacteria, prioritizing the safety of your customers and staff. As such, you should work with a commercial plumbing contractor to ensure that your bathrooms are always clean and spotless. If necessary, invest in a renovation project that fixes any issues.
Install a New Door
The doors of the building you’re running your restaurant in may be outdated and in need of repair, especially if the building is on the older side. Depending on the theme of your restaurant, you may want to invest in more modern door options, such as a sliding glass door, or one that operates automatically. Commercial glass door installation requires skill and experience, though, so hire experts to help you out with your door installation.
Maintain Your Exterior
The design of a restaurant’s exterior plays a crucial role in shaping the perception of your business, effortlessly drawing in customers and leaving a lasting impression. By creating a memorable exterior, you not only set your establishment apart from the competition but also encourage repeat visits, ultimately building a strong and reputable presence in the industry. This means that one of the most important steps to open a restaurant in California is perfectly maintaining your building’s exterior. Elements like commercial lawn care and landscaping are essential for this kind of maintenance.
Remodel Your Dining Room
Your dining room, or dining areas, are key to your restaurant’s success. If the building you’re planning to use doesn’t have a great layout yet, it’s best to hire an architecture company and create the ideal dining room. If there is one already but it lacks the elements you need, you should remodel the area to be more like you need it to be.
Set up a System to Remove Waste
Your restaurant should always be kept as clean as possible, so getting commercial waste removal services is one of the best things you can do. These services will help you dispose of any garbage and materials that have no business being near a restaurant.
Repair Your Refrigerators
Your restaurant will probably have more than a few high-end refrigerators, and taking care of them is essential, since they can be quite expensive. You’ll have to find a reliable appliance repair company that will help you maintain them and repair any issues. Neglecting to properly take care of your refrigerators can lead to further issues, and these appliances can be quite costly to repair, so avoid such situations as best you can through maintenance.
Pass Your Restaurant Health Inspection
To open your restaurant, successfully passing a California restaurant health inspection is a prerequisite. An unannounced visit from a health inspector will occur, during which they will thoroughly evaluate the quality and safety standards of your establishment. Make sure you’re prepared.
There you go—all the necessary steps to open a restaurant in California the right way. If you follow the advice shared here, you’ll have a sturdy foundation for your business and you’ll be able to build the company you’ve always dreamed of. Good luck!
