How to Open a Restaurant in Virginia

Opening a restaurant in Virginia is a major project, full of paperwork and overlapping steps. Even experienced business owners and entrepreneurs in the restaurant industry can find opening a new restaurant incredibly daunting.

That’s why we put together this thorough guide to opening a Virginia restaurant. Read through it and access the dozens of resources within it — whether you’re opening a sourdough pizzeria in Richmond, a fine dining destination in Virginia Beach, or an Arlington sandwich shop that even DC residents cross over for a visit.

How to start a restaurant in Virginia

1. Decide on a restaurant concept

The beginning of the restaurant-opening process is a lot of decision-making: You’ll be narrowing down your many ideas into a strong, exciting business concept. Get specific: for example, chef Seng Luangrath created Padaek in Arlington, VA to introduce the area of Lao food, as well as Southern and Northeastern Thai flavours. 

The following questions can help guide your brainstorming:

• What type of food do you want to serve? What cuisine will you specialize in? Will you source ingredients locally or go with national vendors?

• What other restaurants are nearby? How will your business stand out from the competition?

• Will it be a full-service restaurant, or a takeout counter with a couple of tables?

• What demographics do you want to appeal to? Who’s your target market? Where are they located?

• 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?

• What will your business name be?

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

Consider also the values you want to embody as a business owner and team leader — write them down. Then, think about the restaurant mission you and your team will be working towards. Your mission and values will guide some of the decisions you’ll need to make around how you’ll present your business to potential employees and potential customers.

2. Create a restaurant business plan

A business plan has two primary goals: to help you secure funding and to guide you through opening your specific restaurant.

First, choose a type of business entity. There are 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. How will investors receive profit? Will you do a profit-sharing program for employees? Work with a lawyer and accountant to draw up all the necessary paperwork and contracts.

Now, download the business plan template below and start filling out 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

It costs between $95,000 to $2 million and beyond to open a restaurant in the US, so it’s likely you'll need to pursue some external funding options, like SBA (Small Business Administration) 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 Virginia restaurant location (and start renovations)

You’ve heard it before: location, location, location. Do some market research about the demographics of your potential neighborhood and scope out the competition nearby. Why is this the best place for your business?

For example, high-end Persian restaurant Joon recently opened in Tysons, VA. “Tysons has a large population of Iranians and it has a cosmopolitan population who are open to trying a variety of cuisines,” shared founder Reza Farahani, on why they chose to open in Tysons.

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

• What’s your target market and ideal customer profile? Will they jive with your concept?

• Will you buy, rent, or build a space?

• How are the real estate market conditions in the area?

• How large is the site? What was it used for in the past?

• What are the zoning laws applicable to the space?

• How much foot traffic or car traffic does the area get?

5. Apply for Virginia restaurant licenses and permits

Virginia restaurateurs will need to meet specific requirements and obtain certain licenses and permits before they can start operating. The list below is not exhaustive — check with your local restaurant association and your local government to find out what you need.

Follow this excellent step-by-step guide to starting a new business in Virginia, from the Virginia Department of SBSD (Small Business & Supplier Diversity).

Keep reading to learn about some of the licenses and permits you may need to open a restaurant in Virginia.

1. Sign up for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) in order to be able to pay taxes.

2. Register your business with Virginia Tax (The Virginia Department of Taxation), and you’ll receive a Virginia Tax account number for each tax type, as well as your sales tax certificate of registration, among other documents.

3. Get a local government business license from your city or county.

4. Some businesses will also need to register their business with the Virginia State Corporation Commission (SCC), filing articles of organization or incorporation.

5. Register with the Virginia Employment Commission (VEC) in order to be able to hire employees. If you plan to hire more than two employees, register with the Virginia Worker’s Compensation Commission.

6. Though Virginia doesn’t require that all food service employees have a food handler’s license or certification, there does need to be at least one certified food safety manager at each food establishment — their certification will show that they’ve been trained in the food preparation processes that prevent foodborne illness.

7. Get a building health permit through your local public health department. Also, all new builds and new uses of existing buildings will require a certificate of occupancy from your local government before you can start doing business — including a plan review and inspections to make sure the space is up to code and compliant with local health and safety ordinances.

8. Apply for a liquor license permit from the Virginia Alcoholic Beverage Control Authority.

6. Develop your menu and beverage program

Finally, a fun task! Get all your ideas for the food and drinks you’ll serve down on paper. Start big, with lots of ideas, and eventually narrow it down to a profitable and memorable menu. Once you’ve hired them, consult with your chef and bar manager to perfect your edible (and drinkable) offerings.

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

7. Hire and train restaurant staff

There are dozens of restaurant positions you can hire for, and your employees are the backbone of your business, so put in the work to find the best of the best — and do everything in your power to keep them engaged and happy.

In order to attract and retain staff, make your restaurant a truly great place to work by providing good compensation and meaningful restaurant employee benefits, including health insurance. It’s unfortunately still a rarity in this industry, so providing benefits will help you stand out from the competition — and building it into your business model from the beginning will be easier than adding on these benefits down the line.

You can find new restaurant employees, by 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.

Here are some resources from Toast to help restaurant owners 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

New restaurants should strongly consider investing in the following types of restaurant technology in order to meet customers where they are, provide seamless service, manage back of house operations, and keep track of it all with meaningful KPIs.

• 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

Virginia restaurants need to be proactive about marketing — word of mouth isn’t enough! Use a marketing plan template to build a marketing plan for the whole year, including social media marketing, email marketing, flyers, events, promotions, and more. can be extremely powerful.

Consider connecting with local media: it's a great way to introduce yourself to your community and drum up excitement for your food and your business, like Chef Seng Luangrath of Padaek did in this clip from WUSA9.

Learn more about restaurant marketing with 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 close family and friends, and tell your team to do the same. Run service for the first time for this friendly crowd: they’ll provide feedback and you’ll get to test out all your systems and processes and fix any issues before your grand opening.

Use that marketing plan to get your community excited about your first day of real service — your grand opening. Post all over social media, and consider sending out flyers around your neighborhood, and ask your network to share the information widely to get as many people into the restaurant for your first shift without training wheels.

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.