Opening a Restaurant

How to Open a Restaurant in New York

Katherine BoyarskyAuthor

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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.

Toast | BUILT FOR RESTAURANTS

Getting ready to open a restaurant in New York? To help you get started, we put together a comprehensive step-by-step guide. Opening a restaurant is a big job with dozens of steps and lots of paperwork. Writing up a solid business plan and securing funding for your restaurant 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.

One of the most critical parts of opening a restaurant is being compliant with local laws. So when 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 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 New York.

We’ll go into all the steps that would-be restaurateurs in New York need to know — whether you’re opening a pop-up food truck in Buffalo, a late-night pizza place in Brooklyn, or a fine dining establishment in Manhattan.

Key takeaways

  1. Establish your restaurant concept: Define your mission and values to shape your unique restaurant concept and brand

  2. Create a restaurant business plan: Decide what type of business structure you want. An LLC, sole proprietorship, partnership, S corporation, or C corporation. Then, figure out which kind of business owner you are and what kind of profit-sharing structure makes sense

  3. Secure restaurant financing: It costs anywhere between $95,000 and 2 million to start a restaurant. Some options available for financing include bank loans, alternative loans, small business loans, merchant cash lenders, lines of credit, and crowdfunding

  4. Choose a restaurant location: The criteria to focus on when evaluating a restaurant location for your business include your ideal customer profile (ICP), real estate market conditions, community, size of the site, previous tenants, and zoning

  5. Apply for licenses and permits: Some of the licenses you’ll need include an Employer Identification Number (EIN), business license, certificate of occupancy, food seller’s permit, food handler’s license, liquor license, and food facility health permits

  6. Essential insurance: This includes worker’s compensation insurance, general liability insurance, commercial property insurance, business income insurance

  7. Design your menu and drink selections: Ensure your menu features unique food and drink options that distinguish your restaurant in a competitive market, and set prices that will ensure profitability.

  8. Hiring and onboarding employees: To attract and keep talented staff, you must create a positive work environment. Offering competitive compensation and valuable benefits, such as health insurance, can set your restaurant apart from others.

  9. Invest in essential equipment and tech: Restaurant technology streamlines operations and provides valuable insights into your business's performance and health.

  10. Create a marketing plan: While word of mouth can be effective once your restaurant is established, reaching your target market and converting them into regulars relies on marketing channels such as social media and email.

  11. Plan soft and grand opening events: Once everything is set, conduct a soft opening to test your operations. Invite family, friends, and encourage your staff to do the same. Afterward, shift your focus to planning and promoting your grand opening.

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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.

Toast

How to start a restaurant in New York

1. Establish your unique restaurant concept

What type of restaurant do you envision opening? Jot down all your ideas in one spot. Use the following questions to help refine your thoughts, transforming a broad range of possibilities into a clear, actionable business plan you're confident investing in.

  • What kind of food/cuisine will you specialize in?

  • Who are your competitors? How will you differentiate yourself from the competition?

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

  • Who’s your ideal customer persona (ICP)?

  • Will you be a small business owner, or will you aim at starting a chain?

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

  • What will the physical business look like?

Define your mission and values to shape your brand

As you work through the key details of your business, think about the values you want your own restaurant to represent and the mission you'll be working towards. These elements will influence your decisions, from hiring staff to shaping your brand.

Once you've solidified these ideas, you can begin brainstorming a restaurant name and creating a logo. Consider how your design choices will reflect your cuisine, mission, and core values.

2. Create a restaurant business plan

A restaurant business plan is the roadmap that will take your New York restaurant from an idea to a lively business.

The first step is deciding what type of business structure you'll establish. You can opt for an LLC, sole proprietorship, partnership, S corporation, or C corporation. For a detailed look at the advantages and disadvantages of each option, check out our guide on restaurant business entities.

Restaurants vary in how they handle ownership and profits. Some are run by a single entrepreneur with a team of employees, while others involve investors who hold a share of the business. Co-ops are another model, where all employees share ownership. Many businesses fall somewhere in between, with restaurant owners and partners at the helm, but employees receiving a profit share once the business surpasses a set profit margin. 

Figure out which kind of business owner you are and what kind of profit-sharing structure makes sense for your restaurant business, and work with a lawyer and accountant in New York to draw up all the necessary paperwork and contracts.

All this information will need to be built into your business plan, along with sections that touch on the following aspects of your business:

  • Executive summary, including your restaurant business name

  • Company overview, including your business model

  • Industry analysis (ideal customer persona, location analysis, competitive analysis)

  • Marketing plan

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

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

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

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Restaurant Business Plan Template

No matter where you’re at in your restaurant ownership journey, a business plan will be your north star. Organize your vision and ensure that nothing is overlooked with this free template.

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3. Secure Restaurant Financing

It costs anywhere between $95,000 and 2 million to start a restaurant, and very few people have that kind of money lying around. 

Some financing options available to restaurateurs looking to go into business in New York include:

  1. Brick-and-mortar bank loans 

  2. Alternative loans

  3. Small Business Administration (SBA) small business loans 

  4. Merchant cash lenders 

  5. Lines of credit 

  6. Crowdfunding 

  7. And turning to friends or family for financial support 

Each option differs significantly in terms of application requirements, loan amounts, collateral needed, repayment terms, schedules, and the speed at which funds are disbursed.

For more details on these options, explore our guide on restaurant financing and loans.

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Restaurant Opening Calculator

This calculator lays out some of the fundamental financial costs of opening a restaurant, so you can start planning and bring your dream restaurant to life.

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4. Choose a New York restaurant location

Selecting the ideal location for your New York restaurant is crucial. You'll need to investigate the area's demographics, market research conditions, and competition, as well as the restaurant’s size, visibility, and history.

Whether you buy, lease, or build your restaurant space, each option comes with pros and cons, especially regarding your restaurant startup costs. If you're constructing a new space or remodeling an existing one, you'll likely need to go through a plan review to ensure compliance with local regulations and building codes.

Here’s some additional criteria to focus on when evaluating a restaurant location to decide if it's right for your type of business:

  • Ideal customer profile

  • Real estate market conditions

  • Community

  • Size of the site

  • Previous tenants

  • Zoning and previous type of usage of the space

Ensure that your restaurant space aligns with your concept and brand. Some ideas work better in smaller settings, such as a cozy cocktail bar serving small plates with a peaceful ambiance, while others require more room, like a buffet-style restaurant needing ample room for food stations or a brewery with a taproom relying on foot traffic.

5. Apply for New York Restaurant Licenses and Permits

Like any other state, New York has its own 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.

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

  1. Employer Identification Number (EIN), which connects your business to the IRS. The application can be found on the IRS website, including all instructions and restrictions.

  2. Business License, which is issued by the state of New York. You can register for and manage your new business license on the New York State Portal.

  3. Certificate of Occupancy, which is issued by your city or county if needed, and shows that your space is up to code with local regulations.

  4. Food Seller’s Permit, is required by any business that plans to sell tangible goods that are subject to sales tax. This permit allows them to charge sales tax.

  5. A Food Handler’s License, also known as Food Service License or Food Handler Card, is not required state-wide for every employee — but every establishment needs to have at least one trained Food Safety manager. This license shows employees or managers have taken a course teaching them the proper food handling protocols on how to prevent foodborne illness. This can be accessed on the New York Food Handler Training website.

  6. Liquor License Permits are required for any type of business to sell and serve alcohol to its patrons. Since alcohol has a high markup and a long shelf life, it’s often beneficial from a profit standpoint to sell alcohol. A liquor license can be acquired through the New York State Liquor Authority website, and typically costs between $4,300 - $10,000.

  7. Food Facility Health Permits in New York are under city and county jurisdiction. You’ll need to check with your local health department to find out how to apply. All restaurants need to have their health permits in order before opening, and they must stick to safe food handling, storage, and preparation practices all throughout their operations.

Learn more about the types of permits, license fees, and license costs in New York at BusinessExpress.ny.gov.

6. Essential insurance for New York Restaurants

Here are a few types of insurance for New York restaurateurs to consider:

  • Worker’s compensation insurance, which is mandatory in New York, helps employees who got sick or injured on the job to cover healthcare expenses and lost wages.

  • General liability insurance, which helps cover you in case you’re sued because of a customer injury or property damage, among many other types of lawsuits.

  • Commercial property insurance, which helps you with repairs of your physical location and the restaurant equipment in it, if they get damaged.

  • Business income insurance, which can help you recover lost income due to fires, theft, or wind disasters.

7. Designing Your Menu and Drink Selections

Design your menu, whether you’re working with a chef-owner, a general manager, or developing it on your own. Regardless, be ready to refine the menu items and beverage offerings with your kitchen and bar staff once they are hired and trained.

Ensure your menu features unique food and drink options that distinguish your restaurant in a competitive market, and set prices that will ensure profitability.

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

8. Hiring and Onboarding Restaurant Employees

When hiring employees for your restaurant in New York, ensure that you comply with local city and county guidelines for state labor laws.

Your employees are essential to your business's success. Whether it's the front-of-house staff who create a welcoming atmosphere, the cooks who prepare delicious meals, or the support staff who ensure everything runs smoothly, there are many roles to fill in your restaurant.

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 restaurant industry job boards.

To attract and keep talented staff, you must create a positive work environment. Offering competitive compensation and valuable benefits, such as health insurance, can set your restaurant apart from others.

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

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

9. Invest in Essential Kitchen Equipment and Tech for Your Restaurant

As your opening day nears, explore various restaurant technology options to identify the best combination of products and systems that will ensure your operation is set up for success right from the start.

New restaurants should strongly consider investing in the following:

Restaurant technology streamlines operations and provides valuable insights into your business's performance and health. By leveraging this information, you can implement improvements that drive revenue growth and lead to a successful restaurant.

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Restaurant POS Comparison Tool

A free, customizable Restaurant POS Comparison Tool to research and compare point of sale systems in one Excel spreadsheet.

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10. Create a Restaurant Marketing Plan

Just like in any state, a restaurant in New York requires a solid marketing strategy to reach its target audience. While word of mouth can be effective once your restaurant is established, reaching your target customers and converting them into regulars often relies on marketing channels such as social media and email campaigns.

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.

11. Plan Your Soft and Grand Opening Events

Once everything is set, conduct a soft opening to test your operations. Invite family, friends, and encourage your staff to do the same for the initial live run-through of the dining experience. This will help you identify and resolve any issues before the official launch of your New York restaurant.

Afterward, shift your focus to planning and promoting your grand opening. Use social media to spread the word, distribute flyers in your neighborhood, and leverage your network to maximize attendance on opening day.

You’re good to go!

Opening a restaurant is a long and challenging process, but it’s incredibly rewarding, too. To keep track of everything you need to do within a year of opening, check out our time-bound restaurant opening checklist below.

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