How to Open a Restaurant in New Jersey

Getting ready to open a restaurant in the state of New Jersey? To help you get started, here’s a step-by-step guide to the (long! sometimes challenging!) process.

Opening a restaurant is a huge undertaking with dozens of steps and mountains of paperwork, and even experienced business owners can feel daunted by this task. Your roadmap (and your key to securing funding) is a strong restaurant business plan, so you’ll be working on it from the very beginning.

It’s also important to be compliant with local laws, which vary from state to state — and sometimes town to town. That means getting a liquor license, an occupancy permit, and plenty of other licenses and permits.

In this guide, we’ll cover what New Jersey restaurant owners need to know before they get started — whether you’re opening a high-end Tapas bar in Montclair, a family-friendly Chinese place in Newark, or a late-night pizza place on the shore.

How to Start a Restaurant in New Jersey

1. Decide on a Restaurant Concept

What kind of restaurant are you planning to open? Get all your ideas down in one place. Answer the following questions to guide your imagination from a broad web of ideas to a concrete, viable business that you’re ready to invest in.

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

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

• Will go full-service and offer lots of seating or operate as a takeout counter with a few small tables?

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

• 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 details of your business, also consider the values you want to embody as a business — and the mission you’ll be working towards. This will help guide your business decisions as you hire staff and build your brand.

At the end of all this idea-crunching, you can start thinking about a business name and designing a logo. How will the aesthetic decisions you make reflect your food, your mission, and your values?

2. Create a Restaurant Business Plan

A business plan is the roadmap that you’ll follow to open your New Jersey restaurant — and it’ll also help you secure funding, partner with a business bank, and stay on track through the whole complex process.

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

You’ll also need to decide on a profit structure. Will you have one owner who takes 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 can cost anywhere from $95,000 to $2 million and beyond.

Unless you happen to have a huge amount of money saved, it’s likely you’ll want to pursue some external funding options, like SBA loans, lines of credit, crowdfunding, personal loans, bank loans, or alternative loans.

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 New Jersey Restaurant Location

You’ve heard it before: location, location, location. In order to choose the right kind of space, do some market research on the demographics of your potential neighborhood and the competition nearby.

Buying, leasing, or building restaurant space are all great options, but each have their benefits and detriments — and they’ll all have an impact on your opening process as well as how much startup capital you’ll need.

Here’s a few factors New Jersey businesses should focus on when evaluating a restaurant location to decide if it's the right one:

• 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

Make sure your restaurant space matches your concept and brand — some concepts make more sense in small spaces, like an intimate cocktail bar with small plates, and others need bigger square footage, like a sports bar specializing in wings, or a family-friendly Chinese restaurant.

You may need to work with the county clerk when it comes to real estate purchases.

5. Apply for New Jersey Restaurant Licenses and Permits

New Jersey restaurants will need to meet specific requirements and obtain certain permits to get started on the right foot. Some licenses fall under federal jurisdiction, while others are state-based and others are local to your city or county.

The list below is not exhaustive — check with your local restaurant association and your local government to find out what you need. Follow the business guide shared by the New Jersey government business division (and the Department of Innovation).

Some of the licenses and permits you’ll need to open a restaurant in New Jersey include:

1. EIN (Employer Identification Number), which gets you registered with the IRS so you’re ready to pay taxes

2. Business Formation / Authorization certificate, which lets you operate a business in the state of New Jersey

3. New Jersey Tax ID number + Business Registration Certificate (BRC), which registers you with the New Jersey Division of Revenue and Enterprise Services (DORES), which lets you collect sales tax. It’s the same as your EIN but with three additional digits for state-level use.

4. Business Certificate of Occupancy, which shows you’ve done your due diligence in ensuring your new space is zoned for your type of business, compliant with local ordinances, up to code, and built or renovated in a way that’s in line with New Jersey requirements. It requires one or several in-person inspections, and requirements vary in each municipality.

5. Food Handler’s License for each employee (in some districts) and/or for a Food Safety Manager. This permit is also known as Food Service License or Food Handler card, and it’s a food safety certification that shows they’ve taken a course outlining the prevention of foodborne illness, offered by ServSafe and other organizations.

6. Liquor License Permit, so your restaurant can legally serve alcohol, which can be obtained through the Attorney General’s Office — Division of Alcoholic Beverage Control. However, since the state of New Jersey limits the number of liquor licenses available, businesses often auction off their liquor licenses, transferring them to a new business — which can come at the cost of hundreds of thousands of dollars. NJ lawmakers are seeking to update the liquor licensing process, so always check with your local restaurant association to keep tabs on any updates.

7. Food Facility Health Permit, which is for all food service establishments and is regulated by local health departments. This permit will also require an in-person inspection (or multiple) by the Department of Health. It may be referred to as a building health permit.

6. Develop your Menu and Beverage Program

Plan your menu, either in conjunction with a chef-owner or GM, or by yourself. Either way, prepare to workshop the menu and beverage program with your kitchen and bar staff once they’re hired and trained.

Make sure your menu is full of food and drinks that will make your business stand out among the crowded restaurant landscape — and that it’s priced to bring in profit.

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

7. Hire and Train Restaurant Staff

When hiring employees for your restaurant in New Jersey, ensure that you’re complying with local city and county guidelines for state labor laws.

Your employees are the backbone of your business. From FOH employees making your guests feel welcome, to your cooks making the food that keeps them coming back, to the support staff that keep everything running smoothly, there are dozens of restaurant positions you can hire for.

You have a few options for finding new restaurant employees, including asking around your network, using social media like Instagram and Facebook groups, seeking out new grads from culinary schools in your area, and posting on industry job boards.

In order to attract and retain staff, you need to make your restaurant a great place to work — and providing good compensation and meaningful restaurant employee benefits, including health insurance, will help you stand apart from the pack.

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

As you approach opening day, 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.

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

Restaurant technology helps your operations run smoothly while helping you track the health and performance of your business. With these insights, you can make changes that help you grow your revenue and become a successful restaurant.

9. Create a Restaurant Marketing Plan

With so much competition, New Jersey restaurants need to be proactive about marketing. Word of mouth can be powerful once you’re up and running, but in order to reach those first customers — and turn them into regulars — marketing channels like social media and email marketing can be extremely powerful.

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’ve got all the moving pieces in place, it’s time to test it all out with a soft opening. Invite your family and friends, and encourage your staff to do the same, to experience the first live run-through of service in your new restaurant — it’ll help you work through any snags that you hit.

Then, you can start planning (and advertising!) your grand opening. Post all over social media, consider sending out flyers around your neighborhood, and ask your network to share the information widely to get as many people into the restaurant on the big day as possible.

You’re good to go!

Opening a restaurant is a long and challenging process, but it’s incredibly rewarding, too. “As exhausting as it is, don’t burn out. Have a right-hand person that works just as much as you. No one accomplishes anything alone, you need support," shared Nabila Rosa, part owner and manager of Cantina 46 in Ridgefield, NJ.

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