How to Open a Restaurant in Maryland

Opening a restaurant in Maryland is a major undertaking, with dozens of steps and mountains of paperwork — even experienced business owners can feel daunted by the prospect of opening a new restaurant.

In this guide, we’ll go step by step and cover what Maryland restaurant owners need to know before they open a new business — whether you’re opening a fried seafood restaurant in Baltimore, a family-friendly pizza place in Bethesda, or a taco truck in Annapolis.

How to start a restaurant in Maryland

1. Decide on a restaurant concept

When choosing a restaurant concept, you’re faced with infinite combinations of food, drinks, vibes, and aesthetics — so use the following questions to narrow it down to a feasible business idea.

• What kind of food do you want to serve? Where will you source ingredients? What cuisine will you specialize in?

• What other restaurants are nearby? How will your business differentiate itself from the competition?

• Will your restaurant be full-service or operate as a takeout counter with a few small tables?

• What demographics do you want to appeal to? Who’s your target market — and how will you appeal to them more than other similar options?

• Will you be opening a small business, or are you dreaming big and aiming to start a chain?

• How many staff members will you need to hire? What style of service will they offer — warm and friendly, or elegant and aloof?

• What will the physical business look like?

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

While you’re figuring out the hard details of your business, also consider the values you’ll keep close to your heart at all times while running the business — and the mission you’ll be working towards. This will help guide your decisions as you hire staff and build your brand.

Speaking of brand, start thinking about a business name and making decisions about how your brand will look. How will the colors, shapes, and fonts you choose reflect your food, your mission, and your values?

2. Create a restaurant business plan

Writing your business plan is a critical step in starting a business: it’ll help you secure funding for your business, help you partner with a business bank, and it’ll help you stay on top of all the tasks ahead.

First, pick a type of business entity. Choose from one of five business structures common in the US: LLC (limited liability company), sole proprietorship, partnership, S corporation, or C corporation. Learn about the benefits and drawbacks of each in our guide on restaurant business entities.

Then, choose a profit structure. Will you, the sole owner, take home all the profit? Will you profit-share with employees? Will you share a stake in the business with investors? 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 the following sections:

• Executive summary, including your restaurant name

• 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)

3. Secure restaurant financing

Opening a restaurant in the US is expensive: it can cost anywhere from $95,000 to $2 million. As a result, it’s likely you’ll need to pursue some external funding options, like SBA loans, lines of credit, crowdfunding, personal loans, bank loans, or alternative loans. You can learn more about each of these options, including application info and time to access cash, in our guide to restaurant financing and loans.

4. Choose a Maryland restaurant location (and start on renovations)

Your business location is one of the most important decisions you’ll make as a new restaurant owner. Work with a commercial real estate agent experienced in the restaurant industry to make sure you’re getting a great deal, but also do your own market research, getting to know the demographics and quirks of the neighborhoods you’re considering.

Buying, leasing, or building restaurant space are all available options, each with benefits and detriments. Whatever you choose will have an impact on your opening process, as well as how much startup capital you’ll need.

Here’s a few factors Maryland businesses can focus on 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 and access to transit, or car traffic and parking

5. Apply for Maryland restaurant licenses and permits

Maryland restaurants will need to meet specific requirements and obtain certain permits way before they open in order to be compliant with state law and local laws. Start this process early — it can be very time-consuming, and processing times vary. Some licenses fall under federal jurisdiction, while others are state-based and others are local to your city or county. Some will have filing fees, and others won’t.

Disclaimer: the list below is not exhaustive — check with your local restaurant association and your local Clerk of the Court to find out exactly what you’ll need for doing business in your Maryland county.

Here’s some of the licenses and permits work you may need to do to open a restaurant in Maryland.

1. Employer Identification Number (EIN) from the Internal Revenue Service (IRS), also referred to as a Federal Employer Identification Number (FEIN). This allows you to pay federal taxes.

2. Register your trade name and your business with the State of Maryland, through the Maryland Department of Assessments and Taxation. This tax registration will allow you to collect state tax, and you can register online on the Maryland.gov portal. Learn more about taxation in Maryland at the Office of the Comptroller of Maryland’s website.

3. Depending on the type of business structure, you may need to file articles of organization or incorporation.

4. Get a Maryland business license, which you can apply for in the Maryland Licensing OneStop Portal by Maryland Business Express.

5. Once you’re finished the work on your physical space, apply for a certificate of occupancy from your local government department of planning and permitting — this will prove your space has gone through inspections and is up to code, compliant with local ordinances. Some counties will also need a food service license, like the Permanent Food Service Facility License.

6. Contact your local health department’s food program to learn about the food safety inspection requirements for your county.

7. Get a liquor license permit through your local city or county government. Unlike many other states, this permit isn’t state-wide, but county-run.

8. Though Maryland doesn’t require that every employee have a food handler card, there does need to be a trained food safety manager at every establishment. This certification shows that the manager has been trained in the protocols required to prevent foodborne illness.

6. Develop your menu and beverage program

Plan your food and drinks menus, either in conjunction with a chef-owner or GM, or by yourself. You’ll want to make several drafts, first just trying to find the perfect combinations of dishes and drinks, and then getting more detailed and tweaking recipes to be even more delicious — and more profitable.

Create a menu that makes your business stand out among the very crowded Maryland restaurant landscape. For example, Elisa Milan owns The Empanada Lady, a restaurant in Baltimore — and she created a menu based on her grandmother’s traditional recipes.

“Everyone comes in and says it feels like home… that’s just what The Empanada Lady was built on. Everything is hand-rolled, fresh-made, and our desserts are made in-house,” she shared.

Learn more about menu design and menu engineering to make the most of your menu.

7. Hire and train restaurant staff

The reason a restaurant can open its doors every day — and bring in customers time and time again. There are dozens of restaurant positions you can hire for, and it’s not always easy to find and train great new restaurant staff — but the benefit of starting a new business from scratch is that you can build in employee retention efforts from the very beginning.

The best way to ensure you’re keeping turnover to a minimum and attracting the best of the best is providing good compensation and meaningful restaurant employee benefits, including health insurance.

There are many ways to find new restaurant employees, including asking your network from previous jobs, posting on social media like Instagram and industry Facebook groups, seeking out new graduates from culinary schools in your area, and posting on industry job boards. 

In Baltimore, Elisa Milan, owner of The Empanada Lady went on WBAL TV news to announce that her business was moving downtown, and to share her food and her story. She also used this opportunity to put out a call-out to potential employees to come to an upcoming hiring event. 

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

You’re getting close to opening day, so you’ll need to start thinking about your restaurant technology options. Assess your needs, and choose what combination of products and systems make sense to help you set your operation up for success from the beginning — with seamless operations, cost-saving processes, and meaningful KPIs to help you track your business growth.

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

A restaurant marketing plan can make all the difference, especially for those challenging first few months as word is still getting out about your business. By posting regularly on social media, and starting an email newsletter, you can share the process of building your space and your menu, drumming up excitement around your new business.

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

Once you’re just about ready to open, test it all out on your family and friends with a soft opening. Then, once you’ve gotten their feedback from that very first shift, take the learnings and apply them on your grand opening — which you’ve been promoting all over social media and beyond.

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.