How to open a restaurant: costs, permits and a checklist

To open a restaurant in the US, you settle the concept and write a business plan, price the project and raise the money, register the business, and lease a space. Then you get plans approved and permits issued, build out and equip the room, hire and train staff, soft-open and open. In a 2018 survey of more than 350 independent owners by RestaurantOwner.com, the median restaurant cost $375,000 to open, a pre-pandemic figure to check against current quotes. Plan on most of a year: Superior Seating, a restaurant furniture seller, puts it at 6 to 12 months from concept to opening day for most restaurants.

The building moves the cost most. In the same survey, a former restaurant space cost a median $275,500 to open, a converted non-restaurant space $425,500, and new construction $650,000.

This guide is general information, not legal, tax or insurance advice. Rules differ by state, county and city, and they change, so confirm every requirement with your state and local offices; the SBA’s licensing guide is a good first stop. Platevio, the point of sale we make, does not file, issue or certify anything.

The restaurant opening checklist at a glance

These timings are a typical plan for a full-service restaurant in an existing space, not a rule; no official source sets them, and a raw shell or a liquor license stretches every phase. The fixed points are the permits. Under the FDA’s model Food Code, the health department approves your plans before you build, and the permit application goes in at least 30 calendar days before opening. Your city may set its own lead times.

12 to 9 months out: concept and money

• Concept, guest and price point written in one paragraph
• Competitors on your target streets visited at lunch and dinner
• Business plan with startup budget, sales forecast and break-even
• Funding lined up: savings, partners, lenders
• City and county asked which permits apply, including alcohol

9 to 6 months out: registration and site

• Business registered with the state; EIN obtained; bank account opened
• Zoning confirmed for restaurant use
• Lease signed, with an exit if permits or the liquor license are refused
• Designer hired; floor plan and kitchen drawn
• Liquor license application started, if serving alcohol

6 to 3 months out: approvals and build-out

• Health department and building plans approved
• Construction started, only after approval
• Equipment ordered; sales tax registration done

3 to 1 months out: menu, suppliers and team

• Menu tested, costed and priced
• Supplier accounts opened
• Insurance in force, including workers’ compensation where required
• Health permit application submitted
• Sign permit and music licenses in place
• Managers hired; payroll set up
• POS, printers and internet tested

Final month: inspections and training

• Building, fire and health inspections passed
• Certificate of occupancy and food permit posted
• Staff hired, paperwork done, trained
• Opening inventory delivered and counted

Opening week

• Soft opening run and its problems fixed
• Cash float, card reader and deposit routine checked
• Opening day, then a daily review of sales, waste and mistakes

Concept, market and the business plan

The concept decides service style, check size, kitchen size, seats, staffing and whether you need a liquor license. “Italian restaurant” is not a concept. “A 60-seat trattoria, dinner only, $35 a head with wine, pasta made in-house” is.

Demand for eating out is not the question: the National Restaurant Association forecasts $1.55 trillion in US restaurant and foodservice sales in 2026. The question is whether guests choose you on your street. Stand outside candidate sites at lunch and dinner, on a weekday and a Saturday. Visit every competitor within a mile and note prices, busy hours and what nobody nearby offers.

Then write the plan: startup costs by line, a sales forecast built from covers, average check and days open, the break-even point, and the reserve that carries you until you reach it. Our restaurant business plan guide has a full template and a worked example. If you have never run a restaurant, the plan is where that gap shows, so budget for a manager or chef who has opened one.

What it costs to open a restaurant, and how to fund it

Sourced US figures

RestaurantOwner.com surveyed more than 350 independent restaurant owners, and released the results in November 2018:

It is a self-reported trade survey and a 2018, pre-pandemic figure, so get current quotes. Use it as a sanity check, not a budget. Say you plan 80 seats: 80 × $3,586 is about $287,000 in 2018 money. If your quotes come in far below that, ask what they left out, unless you are taking over a former restaurant.

The lines your budget needs

Build the total from quotes: lease deposit, design and permit drawings, build-out (plumbing, electrical, hood, grease interceptor, restrooms), kitchen equipment, furniture and smallwares, permit fees, legal and accounting, insurance, opening inventory, pre-opening payroll, marketing, POS devices and internet, contingency and working capital. For the kitchen, work through our commercial kitchen equipment list.

Working capital

No official source sets how many months of cash a new restaurant should hold. The SBA suggests projecting at least a year of monthly expenses when you estimate startup costs, but that is a planning horizon, not a reserve. Do the arithmetic instead. Say fixed costs are $30,000 a month and your forecast has sales covering only half of them for four months. That is $60,000 of losses to fund before anything breaks.

Funding options

Most restaurants combine owner savings, partners or investors, and a loan. The SBA-backed programs, as of September 2026:

Also ask the landlord for a tenant improvement allowance toward the build-out.

Register the business

Choose a structure. Per the SBA, a sole proprietor can be held personally liable for business debts, an LLC protects you from personal liability in most instances, and a corporation offers the strongest protection. Ask an accountant or attorney before you choose.

Register with the state. LLCs, corporations and partnerships generally register in the state where they do business, with a registered agent there. A trade name (DBA) may need registering with the state, county or city. The SBA says the total is less than $300 in most cases, though fees vary.

Get an EIN. The Employer Identification Number identifies the business for taxes and payroll. It is free from the IRS; ignore websites that charge for one.

Register for sales tax with your state revenue department before your first sale, in states with a sales tax. Texas charges no permit fee but may require a security bond. New York wants you registered at least 20 days before you begin business.

Line up insurance. Typical coverage includes general liability, commercial property, workers’ compensation and, if you pour, liquor liability. New York City, for one, asks for proof of workers’ compensation and disability coverage when you apply for a food service permit.

Open a business bank account and keep every business dollar in it from the first deposit. Ask your city or county whether you also need a local business license.

Restaurant licenses and permits

The SBA puts it plainly: which licenses and permits you need from the state, county or city depends on your activities and location. There is no national list. Below is the usual pattern, with city examples as of September 2026.

Health permit and plan review

Most states and localities base their food rules on the FDA Food Code, a model each adopts by its own law, sometimes in an older edition. Under the 2022 edition:

1. Plans first. You get plans approved before building or converting a food establishment, or, when the health department asks, remodeling one (section 8-201.11).
2. Plans include your menu and equipment, with models and capacities (8-201.12). That is why both come before construction.
3. Inspection before opening, to confirm you built what was approved (8-203.10).
4. Permit application at least 30 calendar days before opening (8-302.11).

The 2022 Food Code also makes the person in charge a certified food protection manager (2-102.12), with exemptions for minimal-risk establishments; states that adopted other editions word it differently, and some cities, such as Austin and New York City, require one on site whenever you are open.

Building, occupancy and fire

You need a certificate of occupancy that allows restaurant use; in New York City, no place may be used until one is issued. Turning a shop into a restaurant usually means building permits and inspections, and larger rooms add more: NYC requires a Place of Assembly certificate for 75 or more people indoors, plus fire department inspections. Occupant load and exits are covered in our restaurant floor plan guide.

Alcohol

Alcohol takes a state license, often with local sign-off, plus registration with the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) before you sell. Our guide to how to open a bar covers license types, quotas and transfers.

Music and signs

• Music. Licenses come from four organizations: ASCAP, BMI, SESAC and GMR. One license does not cover another’s catalog, and paying a band or DJ does not cover it either. The bar guide has the details.
• Signs. NYC requires a permit for a sign nailed, screwed or illuminated; check your city’s rules.

Location, lease and build-out

The space

A former restaurant is the cheapest start because the hood, grease interceptor and restrooms may already be there. Before you commit, confirm that zoning allows a restaurant at your hours, that the certificate of occupancy covers restaurant use and your headcount, that gas, power and drainage can carry a kitchen, and that guests pass at meal times.

The lease

Sign only with a clause that lets you walk away if permits or the liquor license are refused. Negotiate free rent during build-out, a tenant improvement allowance, a use clause naming restaurant service, and who pays for the hood and grease interceptor. The bar guide lists more terms.

Build-out, in order

1. Design the dining room and kitchen, then pick equipment to fit the menu (see the floor plan guide and equipment list above).
2. Submit plans to the health and building departments.
3. Build, only after both approvals.
4. Install equipment; test the hood and fire suppression.
5. Pass inspections, then receive the certificate of occupancy and permit to operate.

Menu, suppliers and staff

Menu and suppliers

Open with a shorter menu than you plan to run, and finalize it before plan review, since the health department reads it. Cost every dish before you print a price; our guide to food cost percentage shows how.

A common setup is one broadline distributor plus specialists for produce, meat or bread. Get delivery days, order cutoffs, minimums and payment terms in writing, and open accounts early: a new business may pay on delivery until credit is approved.

Hiring and training

A full-service restaurant typically needs a chef or kitchen manager, cooks, a dishwasher, a front-of-house manager, servers, a host and, if you pour, a bartender. Hire managers first. Train everyone on the menu, service, food safety and the POS before the soft opening.

Employer obligations, US federal baseline

Federal rules as of September 2026; states and cities often add more.

• Minimum wage. $7.25 an hour. Tipped staff can be paid a cash wage of $2.13 with a tip credit of up to $5.12, if tips bring them to $7.25; otherwise you make up the difference, and you must explain the tip credit before taking it. Some states, California among them, allow no tip credit.
• Form I-9. The employee completes Section 1 by the first day of work; you complete Section 2 within three business days, and keep the form.
• New-hire reporting to your state directory within 20 days under federal law; your state may set a shorter deadline.
• Unemployment tax. FUTA is 6.0% of the first $7,000 paid to each employee, with a credit of up to 5.4% for state unemployment tax paid.
• Workers’ compensation is state law, and most states require it. Texas lets private employers opt out, with notice to employees and the state.

Soft opening, marketing and the first months

Before and during the soft opening

Marketing starts months before the doors open. Once the lease is signed, set up the restaurant’s listing on Google and its social accounts, share progress from the build, and introduce yourself to the offices and shops nearby. A soft opening is a rehearsal with forgiving guests. WebstaurantStore, a restaurant supply seller, puts the usual window at three days to two weeks. After each service, write down what broke and fix it before the next.

The first months

Every week, compare sales with the forecast, and check food cost, labor and the cash left in reserve. Cut dishes nobody orders, and staff to the covers you get, not the ones you hoped for.

What the survival data really says

The claim that 90% of restaurants fail in year one is a myth. H.G. Parsa and colleagues (Cornell Hotel and Restaurant Administration Quarterly, 2005) followed 2,439 restaurant permits in Columbus, Ohio, from 1996 to 1999. In year one, 26.16% of all restaurants closed or changed hands, and 27.51% of independents; within three years, 59.74% of all restaurants (61.36% of independents). The authors called the 90% figure a myth. The limits: one city, the 1990s, and a sale counts as a failure.

Federal data for the wider sector: of US accommodation and food services establishments opened in the year to March 2024, 85.3% survived a year; of those opened in the year to March 2020, 59.3% survived five years; of those opened in the year to March 2015, 41.6% survived ten (BLS). That category includes hotels, and the group opened in the year to March 2020 lived through the pandemic. The risk is real, but not nine in ten.

Where Platevio fits, and where it does not

Platevio is a free restaurant POS that runs in a browser, on the phones, tablets and laptops a restaurant owns. It covers where the checklist ends: orders, the kitchen, the floor and the bill.

• No hardware to buy from Platevio, and nothing to install. Keep your existing card reader, cash drawer and printer.
• A menu with extras, each extra able to carry its own price.
• Orders at a table or with no table, with extras and notes that travel to the kitchen.
• A kitchen display, printed tickets, or both. Receipts and kitchen tickets print over WiFi, Ethernet, USB or Bluetooth to ESC/POS and Star Micronics printers.
• A floor plan of your room, each table showing seated, waiting on the kitchen, ready to pay or settled.
• Split bills, each part recorded as cash or card.
• Staff roles for owners, managers, waiters and cooks.
• Live across devices, without reloading.
• Free. No card, no plan.

What it does not do, which a new owner must budget for elsewhere:

• No card processing. It records how a bill was paid; your own terminal takes the card.
• No offline mode. Orders need an internet connection to reach the kitchen.
• No inventory or food costing.
• No payroll or scheduling.
• No reservations.
• No online ordering or QR menu.
• No fiscal or tax documents, and it files nothing with any authority.

If those limits fit the restaurant you are opening, see how Platevio runs a restaurant.