Are you passionate about cooking delicious food and looking to Open a Restaurant in Houston? We have prepared a step by step guide” Opening a Restaurant in Houston: Step by Step Guide” that will help navigate you though this process.
- 1 Choose Restaurant Concept & Menu Items
- 2 Decide on Entity Type
- 3 Decide a Business Name (DBA: Doing Business As)
- 4 File Your Business Entity with Texas Secretary of State
- 5 Apply EIN & State Unemployment Number
- 6 Apply for Financing
- 7 Obtain Business Insurance
- 8 Open a Business Bank Account
- 9 Pick a Physical Location & Sign Lease
- 10 Design Your Houston Restaurant Layout & Look
- 11 Order Equipment, Supplies and Materials
- 12 Apply for State, County and City Licenses and Permits
- 13 Apply and Obtain Merchant Credit Card Service
- 14 Setup a Website and Start Advertising
- 15 Hire & Train Employees
- 16 Schedule a Date for Grand Opening
- 17 Learn More
Choose Restaurant Concept & Menu Items
It is important that you decide on what type of Food you want to serve your customers. You need to decide if it will be American Burgers and Fries or Fusion, Is it going to be Indian Food or Asian noodles. Once you decide the type of food then you can move on to the next step.
Make sure you work on your Menu & Pricing. Its important for you to visit other local restaurants to access food choices so you can get a feel for what other local restaurants are charging for food and what Menu Choices they have.
Decide on Entity Type
Depending upon how many truck you plan on having, and how much profit you projected to make you want to pick the right type of entity. You have many choices such as
You can Incorporate your business
- C Corporation
- S Corporation
- Limited Liability Company (LLC)
- Sole Proprietorship
- General Partnership.
We have many entity comparisons available on our website. You should read those and learn more before deciding which entity is best.
Decide a Business Name (DBA: Doing Business As)
Decide on a Business Name for your Restaurant. Once you pick the name make sure you register fictitious business name at the county clerks office where you plan on conducting the business.
File Your Business Entity with Texas Secretary of State
If you decided to incorporate your Restaurant instead of being a Sole Proprietorship, then you need to File your Business Entity with Secretary of State.
You can either do the incorporation yourself or hire a Company Like Rocket Lawyer to do it for you. You can hire an attorney but it cost more than double than other online services.
This process can take anywhere from 3 days to 30 days depending upon how busy secretary of state is and if you pick a regular or an expedited option. So you want to get going on this process as soon as you can.
Apply EIN & State Unemployment Number
Once you receive your Articles back from Secretary of State then you can Apply EIN for your Entity. EIN(Employer Identification Number) is a Tax ID number for your business.
You can Apply EIN either online using this link
Or you can fill out SS4 and obtain EIN via IRS Fax or Phone.
You also need to apply Texas State Unemployment Tax ID number. You can Apply State Unemployment number Utilizing this Link.
Apply for Financing
If you have enough savings then you can skip this step, if not you can start looking to obtain financing options.
You can get either a SBA loan 7A or a regular business loan. We recommend using a local bank or credit union as they are usually easiest to work with. You can read our guide regarding SBA 7A loan by clicking here. You can also look into and apply for SBA Micro Loans.
If you have experience in Restaurant industry especially as a cook or restaurant manager, then SBA loan will be easier to obtain. If you don’t have much experience then its difficult to obtain financing.
Obtain Business Insurance
Since restaurant is very specialized area of insurance, make sure your insurance agent or broker is well versed in restaurant business Insurance. You will need proper insurance to protect your business and your employees.
You need to look into getting:
Workers Compensation Insurance(For Employees)
Business Vehicle Insurance
Open a Business Bank Account
Once you have your entity documents such as Articles of Incorporation, EIN number and organization Minutes , you can open a bank account for your food Truck business.
Make sure you pick a bank that is business friendly and that doesn’t charge you arm and leg for depositing or withdrawing money.
Pick a Physical Location & Sign Lease
If you plan on having a physical parking Location for your Restaurant in Houston, then you need to start looking around the city for the best location.
Depending upon all the spots that are available, you need to start negotiating with different landlord to make sure they are in agreement with the type of food you will be serving and they are ok with you. Make sure there is ample parking for your customers near by so they can park easily near by.
Make sure the zoning is correct for the restaurant business. What zoning means is certain areas of city and county only allows a certain types of business in certain areas.
Make sure you receive a copy of the lease and review it detail. If you prefer you can have a real estate or business attorney review the lease to make sure there is no clause in the lease that will hurt you financially later.
Tip: If possible, only sign a 3 to 5 year lease with two 5 year options.
Design Your Houston Restaurant Layout & Look
You need to make sure layout of the restaurant is customer friendly and attractive. Make sure restroom are located in area so its easily accessible for staff and for customers. Make sure Kitchen layout is set for maximum efficiency especially during busy hours. We recommend working with a designer and architect who exclusively works with restaurants.
Order Equipment, Supplies and Materials
Many kitchen items are on back order especially due to shortage of materials. Hence we recommend ordering your equipment, shelving, and other kitchen items as soon as possible.
This may take from month to several months due to back orders. You may also consider visiting certain warehouses in the area that sells slightly used equipment and furniture that might be more cost effective that ordering new ones.
Apply for State, County and City Licenses and Permits
You need to obtain appropriate State, County and City Licenses and Permits to legally operate your business.
You need to obtain a Texas Sellers Permit. If you plan on selling hot food and taxable items, you need to collect and submit sales tax to State of Texas every quarter. You can learn more about this requirement by clicking here
You also need to follow all Local laws such as Health Permits and food handling certificate. These are essential for safety of public.
Here is Direct Link to City of Houston Requirements:
You need these permits or Licenses to get started
Apply and Obtain Merchant Credit Card Service
Most small business accept credits card now. If you plan on accepting credit card with your business, you need to check with your bank and make sure you apply for Merchant Credit Card Service so you can start accepting credit card.
Make sure your merchant credit card processing company works with your POS system that you will be using. You want to be able to process payments right within your POS System.
Setup a Website and Start Advertising
Starting a business is not enough. You need to get the word out in the Houston and surrounding community. Setting up a website for your business and start marketing online is the best strategy for a small business startup.
You website should contain your menu, prices, and what times are you open. If you have any Happy Hour or special event pricing, make sure its all listed on the website.
Important TIP: “Opening A Restaurant in Houston: Step By Step Guide” recommends that your website is mobile friendly so people on the move can easily access your business hours, and locations.
Hire & Train Employees
You need to determine if you need employees to run the business or you will be starting it solo with family’s help. If you do need employees then hire a payroll company or an accountant who can help you setup payroll for employees.
You need to have each employee fill out a W4 Form, I-9 form and employment Application and provide it to your payroll company.
Once you hire employees you need to start training them to make sure they learn to serve your customers. Employees when properly trained that help run a smooth business.
Schedule a Date for Grand Opening
It is important to plan a date for Grand Opening for your Restaurant Business. This is only way you can make sure all your systems are working properly. We recommend you do a soft opening first where you invite friends and family’s and have them try your food.
In summary, we hope these steps will help you start your Restaurant Business in Houston successfully. We recommend you Print out or make a to do list using, ” Opening A Restaurant in Houston: Step By Step Guide”
If you need more help read our other articles and visit this website often to learn more tips and strategies in the future.