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When you’re opening a cafe or coffee shop business, you’re going to need to get your licenses and permits in order before opening.
A business license, a food facility health permit, a certificate of occupancy — they all have varying (and sometimes overlapping) requirements, so it’s important to know exactly what you need to get to legally open a restaurant in your particular city or county in California.
As soon as you’ve secured funding with your thorough business plan, one of the next steps to get going on is your licenses and permits. Many of them can take weeks, if not months (or even longer), so getting started as early as possible can help prevent bumps in the road to opening your doors.
We’ll get into some of the most common licenses and permits needed in California, what they are and why you need them, how to get them, and how much they cost.
Opening a Restaurant Checklist
So many things go into opening a restaurant. Use this free PDF checklist to set your new restaurant up for success.
How to Open a Coffee Shop Business in California
To ensure that the process of opening your coffee shop is an efficient as possible we recommend you follow this sequence of steps.
- Create your coffee shop business plan
- Find your coffee shop location
- Determine your coffee shop menu
- Order your coffee shop equipment
- Determine your suppliers, cost structure and pricing
- Obtain all necessary licenses and permits to operate your coffee shop, in local compliance
For the last step, every coffee shop license and permit is unique and has its own application process. And each one takes varying amounts of time to secure, so in the process of opening your coffee shop you’ll want to leave plenty of time to get the proper licenses and permits in place.
To simplify the licensing process we have created this guide to cover all the coffee shop licenses and permits you’ll need in California.
Licenses and Permits Required to Open a Coffee Shop in California
- Business License
- Certificate of Occupancy
- Food Handler’s License, also known as Food Service License
- Seller’s Permit
- Catering Business License
- Coffee Shop Insurance
1. Business License in California
What is it and why do you need it?
A business license is one of the first licenses you’ll need as you start laying the groundwork of your business. Also known as a business tax certificate, it helps your business stay compliant at tax season.
How to get a business license in California
In California, business licenses are controlled by the city or county you live in. If you operate a restaurant with multiple locations across cities and counties, it’s important to get a business license for each business in different jurisdictions. To get a business license in California, you’ll need:
- An EIN
- To choose what classification of business you’ll be (LLC? Sole proprietorship? Partnership?)
- A business name
- An address and phone number,
- A thorough restaurant business plan
- A COI for your business insurance policy
How much does a business license cost in California?
California business licenses can be as cheap as $50-$100 or as expensive as hundreds of dollars, depending on the type and scope of the business. Business licenses in California need to be renewed and paid for regularly, so check with your jurisdiction about how often yours will need to be renewed.
2. Certificate of Occupancy in California
What is it and why do you need it?
A certificate of occupancy is a document that shows your space is zoned for your type of business, as well as up to code, safe to use, and up to date on its checks and inspections. Not every county will require them for new businesses, and even then, only certain situations require them, including if you’re doing major building work or changing the use of a space from residential to business.
Always get in touch with your local jurisdiction to determine if your project warrants a CoO.
How to get a certificate of occupancy license?
In LA, for example, you can obtain a certificate of occupancy through the LA Department of Building and Safety, also known as LADBS. The forms are online, but in order to get the certificate, your business location will need to go through fire inspections, plumbing inspections, electrical inspections, and building inspections.
How much does a certificate of occupancy cost?
Different counties will charge different amounts, and they will also vary by type of business. Fee will vary depending on county.
3. Food Handler’s License in California
What is it and why do you need it?
A food service license, also known as an employee health permit, allows restaurants, vendors, or any other type of food business to safely sell and serve food onsite. These licenses ensure that every employee knows how to do their part to keep your diners safe from foodborne illness. They’re often referred to as ServSafe, after the company that administers most food handler’s tests, or as a California Food Handler Card.
How to get a food handler’s license in California
Every employee who prepares or serves food in California must get their Food Handler’s license within 30 days of being hired — chefs, cooks, servers, baristas, and bartenders, to name a few. Bussers and general managers may not be required to do so.
And if managers have already gotten their Food Protection Manager Certification, they’re also exempt from getting an California Food Handler card. Some jurisdictions have their own food safety training programs and standards, so they’re exempt from requiring employees to get a California Food Handler card.
To get their food handler’s card, employees must pass a test about food safety and preparation with a grade of at least 70% (or higher in some jurisdictions).
How much does a food service license cost in California?
California state law requires that the test and license not cost more than $15, in order to make sure anyone working in a restaurant can afford to get certified.
4. Food Seller’s Permit in California
What is it and why do you need it?
Any business that plans to sell tangible goods that are subject to sales tax needs a seller’s permit. This permit allows them to charge sales tax.
How to get a seller’s permit?
You can register for a permit online through the California Department of Tax and Fee Administration.
How much does a food seller’s license cost?
There’s no fee to apply for a seller’s permit, but you may be asked to pay a security deposit to cover unpaid taxes if the business eventually closes.
5. Catering License
What is the catering license businesses need in California?
California catering business license costs vary depending the county, type and scope of the business but typically fall in the ranges listed below. In order to get your catering license in California, you should start with the link below.
6. Coffee Shop Insurance
So, technically insurance isn’t a permit or a license. However, it’s critical to your coffee shop that you have the proper protections in place in the event of damage to the property or injury to an employee or patron. In fact, state law often requires many types of insurance for coffee shop owners to carry.
We recommend looking into the following policies for your coffee shop:
General Liability Insurance: General liability is a must-have for any business, but especially coffee shops that come into contact with guests daily. General liability covers you as the owner if you, your employees, your coffee, or other food products accidentally cause harm to a patron.
Business Property Insurance: Keep your coffee shop’s interior and exterior covered in case of accidental damage.
Workers’ Compensation: If you plan to have employees help run your coffee shop, there’s a high likelihood that state law requires workers’ compensation insurance on your part to keep your employees protected.
Commercial Auto Coverage: Planning on taking your coffee shop mobile? Or, will you have a company vehicle to transport supplies when necessary? If either of these situations applies to you, you will need a commercial auto policy that covers your company vehicle in case of a car accident.
Restaurant Opening Calculator
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Timeline for Opening a Coffee Shop: Next Steps
Opening a coffee shop requires dozens of steps, overlapping requirements, and plenty of paperwork. Writing up a solid coffee shop business plan and securing funding for your coffee shop are some of the first things you’ll need to do so that you can afford all the building blocks of your business, including your licenses and permits.
Getting your licenses and permits in order as early as possible — at least three months before you plan to open, ideally starting the process six months before you open, can help you avoid any bumps in the road.
While you’re waiting on licenses and permits to come through, you can continue going through the process of setting up your coffee shop for success. Plan your staffing needs and, near the end of your permitting process, start reaching out to your community and interviewing candidates.
Work on your renovations (once your certificate of occupancy has come through), and bring your interior design and decor dreams to life. Test your menu over and over again until it’s perfect, and work on your inventory and pricing strategies.
As you approach opening day, you can also start to peruse your restaurant technology options and find what combination of products and systems make sense to help you set your operation up for success from day one. A modern point of sale platform with online ordering, team management, and inventory capabilities can help save you time and money as you grow your business.
Download your free coffee shop business plan template today. With a solid business plan, the necessary permits and licenses, and the right amount of caffeine, you’ll be ready to seize the day and get your dream coffee shop ready to go.
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