How to Open a Restaurant in Arkansas

Want to get started in the Arkansas restaurant business? There's plenty to remember and plan for, and it's no easy feat to get your food company up and running. But with our comprehensive step-by-step guide for how to open a restaurant in Arkansas, you'll be good to go.

Following local laws is crucial for any new business. Whether you’re opening a restaurant, cafe, bar, or any other food business, you’re going to need to get your licenses and permits in order. A liquor license, a certificate of occupancy, a food facility health permit — they all have diverse yet specific requirements. You've got to know exactly what you need to legally open a restaurant in your particular city or county in Arkansas.

In this guide, we'll explain how you can build your restaurant from scratch, taking into account factors like menu design, food safety, licenses, permits, and business plans. Read this checklist to be fully equipped for restaurant owner life, whether you're setting up a cafe in Little Rock or a wine bar in Fort Smith.

How to Start a Restaurant in Arkansas

1. Choose a Concept

First things first, you must come up with a general vision of your restaurant. You have to decide on a lot of fundamentals before you can begin anything else, so it's best to get brainstorming and settle on an idea you like the most.

At this early stage, ask yourself the following questions:

• What kind of food do you want to serve?

• What other types of restaurants are nearby?

• What kind of service will you provide? Will you offer takeout?

• Who do you want to appeal to?

• Are you looking to run a small business or build a chain of establishments?

• What interior design do you envision?

You can take a look at these restaurant design concepts for inspiration. You don't have to come up with something that rocks the catering industry, just pick a design and stick to it.

2. Create a Business Plan

Writing a solid restaurant business plan is one of the first things you’ll need to do when starting a restaurant. It's here that you should establish your core values and mission statement so that you can stay on track as you build your brand.

During this stage, you must also choose what kind of business entity you’ll be building, whether that's an LLC, sole proprietorship, partnership, S corporation, or C corporation. You can read our guide on restaurant business entities to learn more about the benefits and drawbacks of each approach.

You should also consider what ownership approach you want. For example, you could simply have one owner and many employees. Other models give investors a stake in the business or operate as a co-op, with every employee owning a stake in the business. Many businesses operate somewhere in between, with managers and partners owning the business but with all employees getting a little bit of profit share when the business exceeds a predetermined profit threshold. 

So, your restaurant business plan should include:

• Values and Mission

• Business Model

• Ownership Style

• Company Overview

• Industry Analysis

• Operations Plan

• Financial Analysis

Figure out which kind of ownership and profit-sharing structure makes sense for your business, and work with a lawyer and accountant to draw up all the necessary paperwork and contracts.

3. Choose Your Location

Choosing the location of your restaurant is crucial to your business' success. Your first step should be to research the competition and demographics in your local area, as well as the space, size, visibility, and history of the property site. You could also go location-free by becoming a ghost kitchen or food truck - something that's gaining popularity in Arkansas.

If you do choose a physical location for your restaurant, the typical choice is to either buy or lease restaurant space. You can also build your restaurant from the ground up. Here are some additional criteria to focus on when assessing a restaurant location:

• Target market and ideal customer profile (ICP)

• Real estate market conditions

• Local community

• Plot size

• Previous tenants

Your location and layout should give you the capacity to bring your restaurant idea to life. For example, if you want to open an elegant steakhouse, you might need your own dedicated building, which might be easier (and cheaper) on the outskirts of Little Rock than in the centre. However, if you want to serve sandwiches or tacos by Lake Ouachita in Hot Springs, maybe a food truck will do.

Keep in mind that your location and available square footage will also play a huge role in your kitchen design and restaurant floor plan. If you envision creating a high-volume Italian concept with an exposed kitchen, for example, you'll need a larger footprint and the ability to install proper ventilation. Some landlords may not be this lenient. 

4. Lock Down Your Finances

You'll need to secure funding prior to opening a restaurant in Arkansas. After all, you probably don't have the $95,000 to $2 million required to start a restaurant just lying around.

Some of the funding options available to prospective Arkansas restaurateurs include bank loans, lines of credit, SBA loans, merchant cash advances, crowdfunding, and reaching out to friends or family for financial support. Application requirements vary, as do loan amounts, collateral, repayments, and how quickly you can receive funding.

5. Apply for Licenses and Permits

Like any other state, Arkansas has particular requirements around the licenses and permits needed to open a restaurant. Some licenses are administered by the state, while several others are done on a local (city or county) level. 

The licenses you’ll need to open a restaurant in Arkansas include:

• Business License: This is one of the first licenses you’ll need as you lay the groundwork for your restaurant. Also known as a business tax certificate, it can cost anywhere between $50 to $1,000. You'll need an Employer Identification Number (EIN) and an insurance policy to receive a business license.

• Certificate of Occupancy: This document shows that your space is qualified for your type of business, compliant with laws and safety regulations, 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.

• Food Handler’s License: Also known as a food service license or an employee health permit, this document allows restaurants to sell and serve food safely. They’re often referred to as Arkansas Food Handler Cards. Every employee who prepares or serves food in Arkansas must get their food handler’s license within 30 days of being hired.

• Food Seller’s Permit: Any business that plans to sell tangible goods subject to sales tax needs a seller’s permit. This permit allows them to charge sales tax. You can register for a permit online through the SBA License and Permits portal. There’s no fee, but you may be asked to pay a security deposit to cover unpaid taxes if the business eventually closes.

• Liquor License Permit: This license is required if you want to sell and serve alcohol. Since alcohol has an incredibly high markup and a long shelf life, it’s often beneficial to your profits to sell alcohol. Liquor licenses in Arkansas are issued by the state. It takes between 30 and 90 days to process a liquor license application and costs between $350-$1000. You must also pay an annual permit fee to renew your liquor license.

• Food Facility Health Permit: All restaurants, cafes, bars, and convenience stores need to have health permits in check before opening to ensure safe food handling fit for human consumption. In Arkansas, health permits are under city and county jurisdiction, so check with your local health department to find out how to apply. When you apply for a health permit, you’ll need to get an inspection to ensure your space and practices fit with the Arkansas Health and Safety Code.

6. Invest in Restaurant Equipment

According to Toast’s Restaurant Technology Report, 95% of restaurant owners and managers believe that technology improves business efficiency.

The pandemic taught us many things, one of which was that customers don't always want to eat out. That's why it's vital to invest in restaurant equipment and technology that creates an off-premise dining experience equally as enjoyable as your in-house one right from the effective date of your opening. 

When setting up your new restaurant, you should strongly consider investing in:

• A restaurant point-of-sale (POS) system

• An online ordering system for restaurants

• Kitchen display system (KDS)

• Restaurant reporting and analytics tools

• Scheduling and team communication software

• A restaurant payroll solution

• Contactless payment options

• Order-and-pay-at-the-table technology

This kind of restaurant tech can be a massive boost to your Arkansas restaurant. You'll be able to offer your products to a wider audience and build your brand and reputation.

7. Develop Your Menu

One of the more exciting tasks when opening a new restaurant is designing your menu. Creating a restaurant menu sounds easy enough, right? Well, to ensure you stay profitable and competitive, you must offer unique food items at the right value.

Customers want to know they are getting good value for money. They don't mind paying higher prices, just as long as you provide the quality and service to back it up. Menu pricing is perhaps the hardest part of this step, as you need to ensure you cover your costs without overcharging your guests.

You've also got to offer food that showcases your unique qualities and brand. You could pick a theme and design the food items around that. For example, a sports bar that primarily shows basketball games could serve fries in small hoops with a closed net. If you're setting up a bar, you could turn all the cocktail names into puns around a particular subject.

8. Hire and Train Restaurant Staff

When hiring employees for your restaurant in Arkansas, make sure you're following the local city and county guidelines for state labor laws.

Your employees are true extensions of your restaurant and its brand, which means they are critical to your restaurant's success. From front-of-house servers to chefs to bartenders, there are plenty of restaurant positions you can hire for.

Referrals, job boards, social media, and career sites are all good ways to find new talent, but in order to attract and retain staff, you need to make your restaurant a great place to work. Here are some resources to help you become a place where everyone wants to work:

• How to Be a Boss at Restaurant Recruiting

• How to Train New Restaurant Employees

• How to Reduce Restaurant Employee Turnover 

9. Create a Marketing Plan

Your Arkansas restaurant will only thrive with a solid marketing plan. Word-of-mouth strategies can be beneficial, but only once you've established yourself as an exciting restaurant. Until then, you should put more of your efforts into other marketing channels.

For instance, social media is one of the best ways to get your restaurant out there. New restaurants that have a strong digital presence are much more likely to turn a profit. Social media also suits many food business models, including food trucks, breweries, bars, and cafes. You can learn more about this in our guide to social media for restaurants.

But while modern marketing strategies are great, don't underestimate the power of good-old flyers and adverts. Posting leaflets through letterboxes or in the windows of nearby shops can get you more customers than you might think.

10. Host a Soft Opening and a Grand Opening

Now you've got everything set up, it's time to show off your menu! Don't go too big too soon, however. You'll want to test out your unique ideas and make sure your service runs smoothly before you open your restaurant up to the public.

That's why it's a good idea to host a soft opening, where you invite friends and family to dine in and taste your food for free (or at least at a reduced price). This gives you an opportunity to collect honest feedback and make any last-minute changes before you open for good.

Then, it's time for the grand opening! Think about how you can use special promotions to boost your business, such as offering discounts on opening night or a free drink with a meal for the first week. This will bring in more customers and help you attract a loyal customer base.

FAQs

Do I need permission to open a restaurant in Arkansas?

Yes - all restaurants and food establishments in Arkansas must be registered with their local government authority. If you're making and selling food for commercial purposes, you'll need a variety of permits, such as a food handler's license. If you're selling alcohol, you'll also need a liquor license.

What do I need to open a cafe in Arkansas?

Starting a cafe in Arkansas can be daunting, but as long as you get the basics right and don't skip a step, you'll be right as rain. Before you open a cafe, you'll need food and drink equipment, business licenses, a certificate of occupancy, a food handler's license, a business plan, a marketing strategy, and a carefully curated menu.

Do you need a permit to sell food in Arkansas?

You are allowed to sell your own produce in Arkansas. For example, you can sell fresh fruit and vegetables without a permit or inspection from the Arkansas Department of Health. Homemade foods and food products can be sold even if they are wrapped and packaged directly from your home or food establishment.