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How to Open a Restaurant in Texas

Dahlia snaiderman

Dahlia SnaidermanAuthor

Opening a restaurant in Texas is a major undertaking with dozens of overlapping steps, tons of paperwork, and a serious need for a clear roadmap. Even experienced business owners and restaurateurs can feel daunted by the prospect of opening a new restaurant. 

In this guide, we’ll cover what prospective Texas restaurant owners need to know — whether you’re opening a birria food truck in Austin, a small plates wine bar in Dallas, or a Malaysian noodle place in Houston.

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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.

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How to start a restaurant in Texas

1. Decide on a restaurant concept

Figure out what type of restaurant you want to open by answering the following questions:

  • What kind of food do you want to serve? Classic Texas food or will you bring in other culinary influences?

  • What’s the competition like in the area you hope to open in? What other restaurants are already there?

  • Will run a full-service restaurant with lots of seating, or operate as a takeout counter with a few small tables?

  • Will you lean heavily on takeout and delivery, or will you mostly focus your efforts on on-premise dining?

  • Who is your target market, and how will you appeal to them?

  • Will you be operating a one-unit small business in the long term, or do you want to expand and franchise?

  • How many staff members will you need to hire? How will you train them?

  • What will the business look like? What design elements inspire you and match your food and theme?

  • What will your business name be?

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

Write down the values you want to embody as a business — and the mission you’ll be working towards with your team. Getting these thoughts and ideas on paper will help guide your hiring and brand decisions.

2. Create a restaurant business plan

A business plan has two primary functions: it’ll keep you on track as you open your Texas restaurant, and it’ll help you with your finances (both for secure funding and signing up for a business bank account).

Before you start, choose what type of business entity you’ll operate. 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 structures.

Decide also how you’ll split up profit: will you be the sole owner (and sole recipient of profit)? Or will you share profits with investors, or with your employees in a profit-share bonus structure?

Now you’re ready to create your business plan. Include the following sections:

  • Executive summary, including your restaurant name and why you’re qualified to start this business

  • 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)

  • You can also opt to include an FAQ section where you provide answers to important questions all in one place.

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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 between $95,000 to $2 million and beyond to open a restaurant in the US — which means most people need to secure some kind of external funding before they can get started.

There are lots of business loan options available to entrepreneurs in the food business, including SBA loans, lines of credit, crowdfunding, personal loans, bank loans, or alternative loans.

Learn more about each of these options, including loan application info and time to access cash, in our guide to 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 Texas Restaurant Location

Location is everything, so don’t just jump into action when you come across a space that looks passable. Do some thorough market research to figure out if this space is right for your business — and make sure the space will be able to meet the safety codes and ordinances in your city or county.

You can buy, lease, or build a restaurant space. Your choice will impact how much startup capital you’ll need, as well as how long it’ll take to open.

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

  • Target market and ideal customer profile — are they located nearby?

  • Real estate market conditions

  • Community

  • Size of the site

  • Previous tenants and their use of the space

  • Zoning and previous type of usage of the space

  • Foot traffic and public transit proximity, or car traffic and parking

  • Competition

  • Can you envision the space matching your restaurant’s type of food?

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Restaurant Floor Plan Templates

Use these restaurant floor plan templates to get inspired as you map, or reimagine, the layout and space setup for your restaurant.

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5. Apply for Texas Restaurant Licenses and Permits

Texas restaurants will need to meet specific business requirements and get a range of permits to operate their business legally. Some licenses and permits are federal, while others are at the state level, and others still are done through local government.

The list below is not exhaustive — follow this amazing Texas licenses and permits guide put together by the Business Permit Office within the Texas Economic Development and Tourism Office. Skip to page 115 and 116 for permits needed for restaurants.

Some of the licenses and permits you’ll need to open a restaurant in Texas are as follows:

  1. A federal Employer Identification Number (EIN) to be registered with the IRS and to be able to pay federal taxes.

  2. There’s no state-wide business license in Texas, but some types of businesses need to register their business name with the county clerk.

  3. File a sales tax permit application with the comptroller’s office.

  4. Retail food establishment permit from the Department of State Health Services (DSHS). Food trucks will need a different permit, the mobile food units permit.

  5. Local health department permit to ensure your establishment is up to code and following food safety standards. A health inspection (or several) can be expected in this process.

  6. In order to serve alcohol, obtain a liquor license permit from the Texas Alcoholic Beverage Commission.

  7. Every employee is required to have obtain a food handler’s license (also known as a food handler card) within 30 days of employment. This license shows that all employees have been trained in safe food preparation standards, refrigeration and TCS food protocols. Every establishment also needs to have at least one certified food manager — you can get your food manager certificate and food handlers license from ServSafe or other licensing organizations.

  8. Each city or county will have rules about certificates of occupancy, but most new businesses and new buildings need them. Consult your local government to find out the process in your city.

Consult with the secretary of state’s business portal (SOSDirect) to learn about more permits your new business might need, like certificates of formation, applications for registrations, and name reservations.

If you have more questions about the specific requirements to open a new business in Texas, you can contact the Governor's Small Business Assistance team at [email protected].

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.

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Menu Engineering Course

Take this course to make the most of your menu. Learn about menu psychology and design, managing your menu online, and adapting your menu to increase sales.

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7. Hire and Train Restaurant Staff

When hiring employees for your restaurant in Texas, ensure that you’re complying with federal labor laws and Texas-level labor laws. You can find tons of small business employment resources on the Texas Workforce Commission’s website.

Food service establishments need a lot of staff — from the bartenders who keep the drinks flowing to the prep cooks that start the process of every dish. Their work is what will keep customers coming back, so it’s important to hire an amazing team, and keep them engaged and well-compensated.

You can find new restaurant employees in any of the following channels:

  • industry job boards

  • culinary school graduate pools

  • neighborhood Facebook groups

  • industry Facebook groups

To attract and retain great staff, your restaurant will need to be a great place to work — and providing good compensation and meaningful restaurant employee benefits, including health insurance, goes a long way to help you get there.

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

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

8. Invest in Equipment and Restaurant Technology

Pen, paper, and excel spreadsheets are no longer good enough tools when running a modern restaurant. As you get close to opening, consider all your restaurant technology options and figure out which combination of products and systems can make your life easier as a restaurant owner — and can help you set your business up for a strong start and sustainable, trackable growth.

New restaurants should strongly consider investing in the following:

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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 or editable PDF.

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9. Create a Restaurant Marketing Plan

These days, every restaurant needs to be proactive about marketing — especially new restaurants who won’t have the benefit of word-of-mouth until well after they open (and delight that first batch of customers).

In order to reach and engage those crucial first customers, 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.

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Restaurant Marketing Plan

Create a marketing plan that'll drive repeat business with this customizable marketing playbook template and interactive calendar.

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10. Host a Soft Opening and Grand Opening

A soft opening is like a dress rehearsal, performed for your friends and family. Invite everyone you know — and can trust to provide constructive feedback — and run your first-ever live shift.

Then, with as many potential problems ironed out, start planning and advertising your grand opening. Send out flyers, post progress photos of the restaurant coming together on social media, and invite everyone you know — and tell them to invite everyone they know.

You’re ready!

It can take over a year to open a restaurant — and when things are as challenging as they’ve been for the past few years, it can take even longer. But when the team is hired, the menu is perfect, the decor is ready and the doors fly open, it’s an incredible feeling. 

“When we saw the first couple come in, I was, like, oh my God, finally. We get to serve someone. It was a big weight off my shoulders,” shared Luis Robledo Richards, chef-owner of Comalito in the Houston Farmer’s Market. 

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

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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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

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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.