How to Open a Restaurant in Indiana

Thinking about opening a restaurant in Indiana? We’re here to help.

Yes, the process is expensive and time-consuming — but opening a new restaurant can also be incredibly rewarding. In this article, we’ll cover what aspiring restaurant owners need to know about opening a restaurant in Indiana. Whether you’re opening an upscale Szechuan restaurant in Indianapolis, a beer garden with German-style pretzels in Bloomington, or a family-friendly taqueria in Fort Wayne, this guide will walk you through the main steps.

How to start a restaurant in Indiana

1. Decide on a restaurant concept

What kind of restaurant do you want to open? Answer the following questions to nail down a business idea that you’re ready to invest lots of time and money into.

• What kind of food will you serve? What kind of cuisine will you specialize in? Are you an expert in this cuisine, or will you hire one?

• How will your differentiate your restaurant from the competition nearby?

• Will you offer a full-service experience or open a takeout counter with a few tables?

• What demographics do you want to appeal to? Who’s your target market?

• Will you open a small business, or will you eventually expand and franchise?

• How many staff members will you hire? What style of service will the restaurant offer? What skills do your new staff need?

• What will the physical business look like?

• How many business owners will be involved in the restaurant?

Outline your mission and values — and how they’ll impact your brand

Consider the values you want to embody as a business, and the mission you’ll work towards with your team. It will help guide major business decisions, like who you hire and what kind of environment you’ll cultivate for employees and for customers.

Some restaurant owners need to dig deep to figure out the mission behind their work — but many know what it is from the beginning. For example, after working in a Tibetan restaurant for years, Pema Wangchen bought the place from the retiring owner and took on running the place himself. “I wanted to own the Tibetan restaurant so I can share my story with young people,” Wangchen said to the Indiana Daily Student. “A lot of people don’t know what Tibet is, but that’s my goal, to tell them.” 

Finally, come up with a business name and create a visual brand to match, including your logo, color scheme, and the fonts you’ll use for graphics on social media, on your menu, and throughout your restaurant space.

2. Create a restaurant business plan

A restaurant business plan helps your new food establishment secure funding, it helps you open a business bank account, and it provides a roadmap to follow throughout the opening process.

Before you start writing, pick your preferred type of business entity. Choose from one of five business structures common in the US: Limited liability company (LLC), sole proprietorship, general partnership, S corporation, or C corporation. You can learn about the benefits and drawbacks of each in our guide on restaurant business entities.

Then, decide how profits will be distributed. Will you, the business owner, take home all the profit? Will you have investors who get a stake in the business? Will you profit-share with your employees? How much? Work with a lawyer and accountant to draw up all the necessary paperwork and contracts.

Now you’re ready to create your business plan. Include detailed information in each of the following sections:

• Executive summary, including your restaurant name, concept, and type of food

• Company overview, including your business model

• Industry analysis (target market, location analysis, competitive analysis)

• Marketing plan

• Business model and service model (Quick service restaurant? Food truck? Fine dining? Fast food? A sit-down dining room?)

• Operations plan (staffing needs, customer service policies and procedures, payroll plan, which restaurant POS you’ll get, which vendors and providers you’ll use for produce and laundry and more, which types of business insurance you’ll get)

• Financial analysis (investment plan, financial projections like break-even point, expected cash flow, expected costs)

• Your history and qualifications as an entrepreneur

3. Secure restaurant financing

Indiana food businesses will need a lot of startup capital. Opening a restaurant in the US is an expensive process: it costs from $95,000 to $2 million and beyond. Most restaurant owners pursue external funding options, like Small Business Administration (SBA) loans, lines of credit, business loans, crowdfunding, personal loans, bank loans, or alternative loans.

4. Choose an Indiana restaurant location (and start renovations)

Buying, leasing, or building restaurant space are all great options, each with upsides and downsides, with varying impacts on your opening process as well as your startup costs.

Do some market research on the demographics of your potential neighborhood and the restaurant competition nearby — picking the right location is critical to the success of your restaurant.

Here’s a few factors Indiana businesses should consider when evaluating a restaurant location:

• Target market and ideal customer profile

• Real estate market conditions

• Community

• Size of the site

• Previous tenants

• Zoning and previous type of usage of the space

• Foot traffic or car traffic

• How it suits your concept - is it big enough for onsite dining, if you plan to offer it?

5. Apply for Indiana restaurant licenses and permits

Restaurant businesses in Indiana will need to apply for licenses and permits before getting started. Some licenses are administered federally or by the state of Indiana, while others are local. Application fees vary widely for different types of businesses in different counties, so consult your local government business center to ensure you’re doing it all correctly.

Follow this excellent guide for new restaurants in Indiana from the Indiana Department of Health, and this roadmap for all new businesses from the Indiana Secretary of State.

Here’s an outline of some of the license applications and permits you’ll need to open in Indiana:

1. Get a Federal Employer Identification Number (FEIN, also referred to as an EIN), which connects your business to the Internal Revenue Service (IRS) and registers you to pay federal taxes.

2. Indiana doesn’t have a general business license, but you’ll need to register your business for Sales Tax, Use Tax, and Income Tax with the Indiana Department of Revenue (IDOR). Follow this checklist from the IDOR to learn more.

3. Register your food establishment with your the Indiana Department of Health or your local health department — and some counties require a food service license or health permit for all food vendors. Contact the Indiana Department of Health at food@isdh.state.in.us to receive a copy of the “Retail Food Establishment Sanitation Requirements” for all restaurants. You’ll need to submit plans for review and undergo inspections, either with your county health department or the Indiana Department of Health.

4. Contact your county or city government to learn how to apply for building permits and/or an occupancy permit, including plan reviews and inspections that ensure you’re complying with local ordinances.

5. Apply for a liquor license (also known as an Alcohol Permit) through the Indiana Alcohol and Tobacco Comission (ATC).

6. Indiana food law says that restaurants need to have at least one certified food safety manager, but all employees do not need to have a food handler card. These food safety licenses show that either a manager or each staff member has been trained in the proper food handling protocols that prevent foodborne illness.

6. Develop your menu and beverage program

Create a draft of your food and drinks menu yourself, and share it with senior employees as you hire them — your chef and bar manager will have notes that will make it more appealing to customers and more manageable to prepare for your team.

Narrow down your long list of items to a menu that’s profitable and manageable in terms of inventory and prep — and always delicious.

7. Hire and train restaurant staff

With dozens of restaurant positions to hire, it’s worth it to put the work in up front to find (and retain) the best staff around. When searching for new restaurant employees, put calls out to your network and community from previous restaurant jobs, post on social media like Instagram and in industry Facebook groups, seek out new grads from culinary schools in your area, and post on industry job boards.

The most important way to get ahead of any staffing problems is to invest in making it an outstanding place to work — and this can primarily be accomplished by providing good compensation and meaningful restaurant employee benefits, including health insurance. Building staff support into your budget from the beginning means you’ll face less turnover and fewer hiring challenges.

Here are some resources from Toast to help you attract, hire, and retain restaurant employees:

• How to Be a Boss at Restaurant Recruiting

• How to Onboard a New Restaurant Employee

• How to Train New Restaurant Employees

• How to Reduce Restaurant Employee Turnover

• How to Ask Great Restaurant Industry Interview Questions

To learn even more, go through our video course on hiring and retaining restaurant employees.

8. Invest in equipment and restaurant technology

Go through our list of essential restaurant equipment, from tasting spoons to burners to refrigeration needs, and start shopping — then, pivot to thinking about restaurant tech.

Restaurant technology helps your restaurant run smoothly while helping you track the performance of your business. Peruse your restaurant tech options and choose the combination of products and systems that make sense to help you set your operation up for success. New restaurants should strongly consider investing in the following:

• A cloud-based restaurant point of sale system with handhelds

• Kitchen display screens

• An online-ordering system for restaurants

• Restaurant reporting and analytics

• Restaurant inventory management software

• Restaurant accounting software
  Simple scheduling and team communication

• A restaurant payroll solution

• A restaurant loyalty or rewards solution

• Contactless payment options

9. Create a restaurant marketing plan

Some of the most effective marketing channels for restaurants are social media and email marketing. Post regularly on social media, like Phat Daddy’s BBQ does in Bloomington, IN. They share everything from promotions, like their $4 kids meal deal, to menu highlights like this photo of their bacon-wrapped jalapeño poppers. Posting on social helps share what your restaurant is about, from the food to the staff to the space.

Once you get those first guests in the door, try out email marketing to share promos and offers with your customers — and they’ll make their way back for another meal.

Learn more about building a restaurant marketing plan with our marketing plan template, our social media guide for restaurants, and our guide to restaurant email marketing.

10. Host a soft opening and grand opening

Host a soft opening: invite family and friends, plus the family and friends of your whole staff, and run through service for the first time. This dress-rehearsal-style event will help you work through any snags and update processes so the real grand opening goes smoothly.

Afterwards, you can start planning (and advertising!) your grand opening — post all over social media, reach out to local media, post flyers, and do whatever else you can think of to get the word out. Fill the restaurants and run through service for real. Good luck!

You’re ready!

To keep track of everything you need to do within a year of opening, check out our time-bound restaurant opening checklist below.