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What Do You Need to Start a Taco Business? (Checklist)
Interested in opening up a taco business, but not sure where to start? Let’s taco-bout it.
There’s a lot to consider as you get ready to kick off your new endeavor, and it may feel overwhelming. But following these steps is a great place to start – and in no time, you’ll be a seasoned pro.
How Much Money Do You Need to Start a Taco Business?
In theory, starting a taco business sounds like a fun idea, but it’s no small investment and there is no single, easy answer to this question. Instead, the cost of starting a taco business ranges depending on the location, size, and design of your business.
On average, the overall cost to open a restaurant — with all expenses accounted for — is between $100 and $800 per square foot, according to FreshBooks.com, with costs varying based on location, concept, size, materials, new or existing location, and equipment. That's a median cost of $450 per square foot. For a restaurant operating out of hundreds or even thousands of square feet, that number can add up quickly.
1. Choose a Business Format
The first question you should ask yourself is, what do I want my business to look like?
Will you open a traditional restaurant with full table service in a quieter part of town? Or do you prefer a storefront with a more fast-casual operation, featuring counter service and a seating area?
Maybe you feel more drawn to a taco window or stand on a busy city street, or a taco truck that allows you to be on-the-go, serving weekend events or providing late night snacks.
Whatever your vision may be, the format you choose will be the foundation you work from as you develop the rest of your business. Make sure to taco your time thinking through the best option for you.
2. Create Your Business Plan
A strong business plan is essential to ensuring your vision won’t fall apart.
You don’t need to have every detail figured out from the get-go, but having a blueprint for bringing everything together will help set you up for success. Here are some key ingredients that every business plan should include:
An executive summary and overview of what your business will look like
The people who make up your team
An industry analysis, including data on your target market, location, and competition
An outline of your marketing strategy
Operations details, including company policies, systems, suppliers, and what jobs to hire for
Financial analysis, including key costs and first-year projections
3. Pick Your Location
Your location plays a major role in determining your customers and your revenue, so it’s important to think about where you want to set up shop and why.
What kind of customers are you hoping to attract? If you’re running a sit-down taco restaurant, you might want to be in an area with families or other folks who’d enjoy a nice meal out on the town. If you go the fast-casual route, consider how close you are to college students who need to grab a quick but delicious bite between classes, or working professionals who could make your taco business the go-to spot for the lunch rush.
If you’re opening a taco truck, what opportunities will you have to reach customers near you? Are there festivals, markets, or other events nearby that would be easy for you to drive to? Is there a vibrant nightlife scene, where you could provide a much-needed late-night meal?
Wherever you put down roots (or wheels), here are some additional questions to consider as you identify the best location for your taco business:
How accessible is your business? Do you have parking? Are you close to public transit, or easy for rideshares to find?
Are there required permits or zoning restrictions for how and where you can operate your business?
How do rent and utility costs factor into your budget? Are they sustainable based on your financial projections?
How will the style and aesthetic of your business attract and influence customers, and how does it fit into its surroundings?
4. Apply for Licenses and Permits
From brick-and-mortar restaurants to food trucks, licenses and permits are essential components of starting a business.
Take your time researching and figuring out what licenses and permits you’ll need to obtain – requirements and costs will depend on the format and location of your business, so starting this step sooner rather than later will help save you from having to shell out more money and time down the road.
5. Taxes, DBA, and EIN
Another essential component of starting your business is making sure you have everything in place to properly handle all business-related tax requirements.
This includes your DBA, which stands for “doing business as” and refers to your business's trade name (or, the name of the entity under which you’ll be conducting business).
While taxes can be confusing, and even a little intimidating, securing your DBA and EIN as a first step will help ensure your taco business stays on track, and no important fillings – er, filings – fall through the cracks.
6. Create a Marketing Plan
Not to spill the beans, but the secret to marketing success all comes down to knowing, understanding, and delivering for your customers.
Consider these components as you craft a unique marketing plan for your customers, seasoned to perfection:
Branding – including name, logo, colors, fonts, and anything else in your brand kit
Social media presence – including Instagram, Facebook, Twitter, TikTok, LinkedIn, and more
Production – building visual (photo and video) and written content to engage customers via social media, email lists, or other marketing channels
Advertising – in addition to social media, advertising includes radio, print advertising, digital advertising, email marketing, and other relevant campaigns
Search engine optimization – strategic accessibility of your website on relevant search engines
7. Understand Your Finances and Operating Expenses
We won’t burrit-around the bush: it’s expensive to open a taco business – and an important question to consider is how you’ll shell out the funds necessary to get your business off the ground, and keep it running.
You’ll need to start by calculating the cost of opening up your taco business, and determining how you’ll finance it – whether through loans, cash advances, lines of credit, crowdfunding, friends and family fundraising, or other options you come across.
The next step is making sure you can keep your business going. To maintain profitability and understand your business trajectory, you’ll want to keep track of key performance metrics, including:
Cost of goods sold (COGS)
Food cost percentage
Employee turnover rate.
8. Design Your Menu
Lettuce get into the fun part: your taco menu!
From the proteins and beans, to the tortillas and sauces, to the toppings and other fillings, there are seemingly infinite possible combinations to cook up for your customers. Which ones will you choose? Here are some questions to keep in mind as you bring your menu together:
Which kinds of tacos attract the most business? Is there an exciting best seller, or a classic that people just can’t get enough of?
Will you go a more traditional route, or experiment with new and innovative flavor combinations?
Will you always offer the same menu items, or will you switch up your taco selection?
Will you have premade options or allow customers to make their own?
How many tacos will you sell at once – one, two, three?
Will you provide opportunities for customer feedback? If so, how will you integrate it into your menu?
9. Establish Key Operating Infrastructure
In order to make your menu, you have to figure out where your ingredients are coming from. That means choosing a supplier. As you explore your supplier options, think about what you’re looking for – do you want a local company or a larger organization? Are they able to stock all the ingredients you need? Do you trust the quality and cost of the products they’re supplying? How will customers feel about the supplier you choose, and will it influence their behavior?
Also consider how you’re going to track your inventory once you have your supplier. What systems do you have in place to manage food and other business costs? Answering these questions ahead of time will help make sure your business keeps running smoothly.
10. Select Your Equipment and Point of Sale (POS) System
Now, you just need the right equipment to turn your ingredients into taco-the-town tacos!
A restaurant will likely require different tools and appliances than a food truck or a home kitchen cooking up tacos for deliveries, so make sure you take your time exploring equipment options that best meet your kitchen needs.
And in queso you were wondering, one of the most important pieces of equipment to keep in mind is a restaurant POS system, so you can keep track of key data, manage orders, sales, and payments, and more.
11. Map Out Your Floor Plan
Whether storefront, taco window, food truck, or delivery service, the way your business is designed is the way your customers will experience it.
Think about whether your space is welcoming and easy to navigate, whether the exterior is intriguing and inviting, and whether there are places to sit (indoors or out) and enjoy the meal. Is there artwork on the walls and comfortable lighting, and are there accommodations like restrooms, WiFi, drinking water?
All of these contribute to the overall experience of your taco business, and will help determine whether customers return or not. Take your time to think about the design of your business and how you can leverage your layout and aesthetic to maximize your potential customer market.
12. Build Your Team
Finally, you need a team to help bring your taco business dream to life!
Navigating the employment process can be tricky, but having a plan for hiring, training, supporting, and retaining your staff is fundamental to building the right team for your business needs and setting everyone up for long-term success.
Guac and Roll!
We get it: opening a new business is intimidating and there are a lot of steps to keep in mind as you explore this new endeavor. If you feel lost, remember to check back here for any tips you need to keep going – and soon enough, you’ll be guac’ing the taco world!