Opening a restaurant in New York is not an easy task, but it’s very much possible. The following blog post will outline the step-by-step process of what you need to do to open your own restaurant in New York City or anywhere in New York State.
This includes how to find a location, which permits are needed, and other considerations that you may want to think about when opening up shop in this bustling city. If you’re interested in learning more about how to start a new eatery or are looking for some guidance on going into foodservice, check out our blog for great information!
- New York Business Outlook and Trends
- Step 1: Research Your Restaurant Business Idea
- Step 2: Name Your Restaurant
- How to Name Your New Business
- Make a List of Keywords
- Play with Words for a Great Brand Name
- Get Inspired with List of Business Names
- How to Register Your Business Name in New York State
- Step 3: Meet New York Legal Requirements: Government Registration, Licenses & Taxes
- Choose Your Business Structure
- Legal Business Entity Types – Explained
- Register Your Business with Government and IRS
- Apply for Your Business Licenses and Permits
- Protect Your Company’s Intellectual Property Assets
- How to Start an LLC in New York State
- Licensing Requirements for New York State
- Step 4: Write Your Restaurant Business Plan
- Step 5: Calculate Your Finances and Fund Your Restaurant
- Step 6: Pick Your Business Location in New York
- Step 7: Buy Restaurant Insurance
- Get Business Insurance Policy
- Step 8: Open a Business Bank Account
- Step 9: Build Your Restaurant Team
- Step 10: Select Your Vendors
- Step 11: Create Your Restaurant Brand and Advertise
- Step 12: Promote Your New York Business
- Additional Resources to Start a Business in the State of New York
- State of New York Business Startup Resources:
- Additional Resources to Open Your New York Restaurant
- Startup Resources for the Restaurant Industry
- Government Programs
- Business Grants and Loans
- Startup Financing for Restaurants
- Trade Associations
New York Business Outlook and Trends
New York’s economy is the third-largest in the country, and if it were its own country, it would be one of the world’s most powerful. New York offers unparalleled opportunities and challenges for entrepreneurs!
New York City is the entrepreneur’s best friend; this city has a plethora of startups. New York City is the top city to open a small business in America, according to CNBC.
Small businesses form a substantial portion of the New York State economy, and 98% percent are smaller than 100 employees. They employ over 54% of the workforce!
For those of you who are thinking about starting a small business in New York, there is no better time than now. With the current state government’s pro-business initiatives and recent tax benefits for entrepreneurs, it has never been easier to start your own company.
Find out more about business startup resources at the Empire State Division of Small Business
Step 1: Research Your Restaurant Business Idea
All great businesses start with good ideas.
THE easiest, fastest and cheapest way to start your business!
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One of the best ways to get profitable business ideas is to review my lists of new business ideas such as small-town business ideas or home-based – lots of which are in your chosen industry and niche.
Another way to find your next startup business idea is to experiment with my fun tool – Business Idea Generator. Creative ideas are a great way to stimulate your entrepreneur’s brain and get your creative juices flowing. The button on this tool will provide you with new concepts for products, services, or side hustle businesses that can help do just that!
Test Your Business Idea
Now that you have researched your idea, it is time to test its viability. It’s important not to invest in an idea until we know for sure whether or not it will be profitable!
Serial entrepreneurs should always test their ideas before investing too much time and money.
As a serial entrepreneur, I have done tons of business idea testing. Some ideas passed, but lots failed. But I am sure glad that the ones who didn’t were only small investments while my newfound confidence in myself was more valuable than anything else!
Below are the best ways I have found to test new product ideas. Get the full list of my 10 best ways to field test your business ideas here.
- Visit Trade Shows with Your New Products
- Ask Others for Constructive Feedback
- Run A Short Testing Ad Campaign
- Stage a Focus Group Session
Market Research – Your Business Ideas
All successful businesses MUST provide a service or product that is needed by the customer in order to thrive.
The adage, “The customer is always right,” has never been truer than in today’s economic climate. To thrive amidst the competition of cutthroat industries and an ever-changing market landscape, your business needs to be able to meet its customers’ demands
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Find out if your new business idea will solve problems that customers are willing to pay for by thoroughly researching the marketplace.
Begin by asking the following questions to study the market, competition, location, and target customers’ needs and wants.
Learn if the Market NEED & WANTS Your New Product or Service
- What problem, need or desire is being solved by your product?
- Who are the people, or companies, that have this problem? Why do they have the problem? What are they trying to achieve?
- How are they answering this problem now, without your new startup? What products and services are they using?
- What are other companies offering for this need – similar or dissimilar products to your business ideas?
- Where does your new firm fit into the marketplace?
- What is your point of difference, competitive edge, over established companies? Why should people buy your product instead of what they are using now?
Step 2: Name Your Restaurant
How to Name Your New Business
How to Name Your Business so Customers Remember Your Brand
A company’s name is one of the most important parts of a business but picking out an appropriate and catchy company name can be tough. Here are my best tips for coming up with names that will stick in people’s minds!
Make a List of Keywords
The words and phrases that your prospective customers type into internet search engines to find companies like yours. Add other towns, states, and countries to your search to find similar firms, outside of your marketing area for inspiration.
Don’t use another firm’s exact name, just use those names to brainstorm your own unique brand name.
- Use market level words such as industry names (ie catering, plumbing) and see what comes up
- Brainstorm a list of related keywords (example for Bakery – sugar, sweet, dough, icing, fluffy, etc)
- Try your competitive advantage term (ie faster, cheaper, cooler, closer) to find interesting concepts
- Your value proposition, innovation, or special feature is a good source to build memorable names (example – Evernote – Remember Everything)
- Outside of Your Industry – Step back and look for an interesting combination of words from outside the industry such as Apple (a fruit) for electronics.
Play with Words for a Great Brand Name
It can be difficult to think up a catchy name for your brand-new business venture. Here are my best tips on coming up with company names that will get people talking about how amazing your products are:
Take that list of keywords and you created using my tips above and then play around until you find that perfect new startup name.
Combine Two Words – Blend real names of two or more owners into an interesting compound business name. Learn the many ways to combine names in my article here.
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Acronyms – An acronym is different from a name made up of initials and creates a new word. An example of an acronym name is LEGO (short for Leg Godt – danish for “play well”) pronounced as one word.
Use this online tool to brainstorm some creative acronym business names.
Wordplay and Puns – Puns are jokes that exploit the different meanings of words – a play on words. They can make funny and catchy business names.
Some examples of business name puns; Cake my Day, Live Free or Pie, and Food Mood. Have fun and get business name inspiration with this free Pun Generator tool.
More Business Naming Tips: How to Come Up with a Catchy Business Name
Get Inspired with List of Business Names
To help inspire you I have written lists of catchy business names for lots of types of companies and different industries. Check out these unique business name ideas that are not taken and available!
How to Register Your Business Name in New York State
If you want to form a New York State business, requirements vary depending on your legal structure. Sole proprietorships and partnerships operate on the same level as LLCs in terms of name registration requirements, but these corporation business types have their own set of rules to abide by in New York.
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1- Seach New York Business Entity Availability
Begin by searching the New York Business Name Database. If you file for an identical business name as someone else, your request will be denied. For a business name to be possible for registration, it must be both unique and available.
2- Search Trademark Records
Next, search the U.S. Patent and Trademark Office database here to find out if another person has already trademarked your desired business name.
3- File an Assumed Name in New York – File a DBA in NY
Filing an assumed name in New York, also known as a DBA name, allows your existing or future business to conduct business using a new name other than its legal business name. That is helpful as you establish your brand name or if you want to change the name of a business without having to file an amendment with the State.
New York State law requires all partnerships to register a business certificate with the appropriate county clerk’s office.
Here are the links you will need to the State of New York Assumed Business Name instructions and the New York State Assumed Business Name form.
NOTE: The use of the following words and phrases are restricted or prohibited by statute* in the name of a Business Corporation (“BC”), Not-for Profit Corporation (“N-PC”), Limited Liability Company (“LLC”) and/or Limited Partnership (“LP”), such as bank, cooperative, etc. Here is the full list of prohibited words for business names in New York State
Fees: The fee for filing a Certificate of Assumed Name in New York State is $25 plus any associated county fees.
This certificate must be typed or printed out in black ink. It must also have clear signatures so that the Department of State can reproduce it legibly.
Yes, you can DIY your own business name registration in New York State…but why bother when our partners at Incfile are offering a free (yes, $0) package to set up your business. Get the no-brainer deal today!
4- Domain Name Availability
I recommend that before calling a web developer to build your site, check if your business name is available as a domain. So, be sure you check to see whether the desired URL is already registered. It’s not in use by another firm.
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You will want to buy the domain name of your business website before someone else does!
Step 3: Meet New York Legal Requirements: Government Registration, Licenses & Taxes
Choose Your Business Structure
Before starting a new business, entrepreneurs should make sure they’re following all the legal regulations of starting and operating a small company. It’s important to stay on top of government paperwork as well as taxes in order to avoid any setbacks or penalties later down the line.
Next, we will cover the legal requirements for business registration with your State and tax regulations. There are IRS rules to take into consideration as well when you’re starting a new venture that needs to be determined before getting the right business licenses or permits in place.
Establishing legal compliance with your new company will allow you to focus on growing the business.
Legal Business Entity Types – Explained
Your business is considered an entity or an organization in the eyes of the law and government, this means that you need to have a structure such as Sole Proprietor DBA, Corporation, LLC a limited liability company in which you run your business from.
The entity you choose to operate your business will dictate the legal protection afforded to it, which in turn dictates how much personal liability you face.
Here is how to determine the best legal structure for your new startup business such as sole proprietorship, partnerships, corporations, or trusts.
There are many types and variations to business structure. Depending on which kind of business you intend to run, how the day-to-day operations will be carried out, and various other factors, a particular business structure may be of more value to you than another.
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Legal Business Formation Entity Types
- Sole Proprietor
- DBA – Doing Business As
- S Corporation
- Limited Liability Company (LLC)
- Non-Profit (Not for Profit) Corporation
A sole proprietorship is the business formation most adopted by individuals. It is also the form of business that carries the most liability for the owner—a single owner, personally responsible for the sole proprietorship.
For sole proprietors to be legally allowed by law, they can either use their legal personal name or take the optional route of obtaining permission from local authorities first in order for a DBA.
A sole proprietorship is a legal structure like LLC or Corporation, and a DBA isn’t. A DBA means you can operate your business with a trading name different from your registered, legally registered personal name.
DBA – Doing Business As
The “doing business as” or DBA is a legal requirement for businesses operating under different names than their legal name.
In order to operate legally, you need to register with the proper state agency and file an assumed name certificate that states who owns your company. The only time this may not be required is if both owners are using their actual last name on any products they sell – in which case no one needs approval from anyone else!
Sole proprietorships and general partnerships are legally required to file DBAs, but almost any business entity type could benefit from having one. This is because a DBA can serve as an important form of protection when conducting business; for example, if someone becomes liable for damages that occurred during the course of their company’s operations, they may be able to claim that liability was due solely to personal actions or decisions which were not related in any way with the corporation.
A business partnership is a legal relationship that can be formed by any written agreement between two or more individuals.
The partners and investors invest their money in the business, with each partner benefiting from any profits, taking responsibility for losses sustained.
One of the best ways to do start a business is with a partnership. It can reduce costs and help you reach your financial goals faster. The advantages of this are that it builds trust among the partners, and allows them to handle tasks more efficiently while sharing in profits.
Business partnership resources:
Limited Liability Company (LLC)
A popular form of business structure is the limited liability company referred to as an LLC. Each state has its regulations regarding the LLC, to clarify how it differs from the other previously mentioned business formation types, let’s start by defining the LLC.
An LLC can be thought of as a hybrid structure. It is sort of a mix between a corporation and a partnership. One might think of it as a partnership that insulates the owner’s liability to some limited degree but is similar to the corporation’s structure.
Read my advice about whether an LLC would be a good legal business entity for you here
Some businesses should incorporate, most notably those seeking venture capital and manufacturers. Other firms should not incorporate such as small one-person companies, often referred to as solopreneurs and those with low capital do not deal in products or services that could be dangerous to your customers.
Next, we will discuss incorporation as a business entity and the different types of corporations’ options.
An S Corporation differs from a regular corporation in that it chooses to pass credits, deductions, income, and losses through to the shareholders. These shareholders would add these to their income tax. It enables the business to simply pass along the numbers to the owners (shareholders) and act as intermediaries.
A corporation is a quite different creature from a sole proprietorship. In the United States, a corporation is a sort of virtual entity. A corporation takes on rights and abilities like a person – that’s why it uses the word “corp” as in the corporal body. The difference is that it features the ability to exist perpetually, quickly transfer interests, and provide limited liability for the corporation’s shareholders (owners).
Read my advice about whether a corporation would be a good legal business entity for you linked below:
Business incorporation resources
Non Profit Corporation (Not for Profit)
A nonprofit organization is one that meets the IRS requirements for tax-exempt status because they provide a public benefit and have social missions. Nonprofit organizations include hospitals, universities, national charities, and charitable foundations that give back to the community for the common good.
Nonprofits must serve the public good in some way. They do not distribute profit to anything other than advancing their own organization’s efforts for an even better future–one of which will be more abundant and prosperous.
Nonprofit organizations exist solely as tools with one goal: to provide a meaningful service or product that benefits society at large while also benefiting themselves by providing them with opportunities such as personal development, education, networking, etc., all aimed towards creating a world without poverty.
A not-for-profit organization is one that does not earn profit for its owners. All money earned through pursuing business activities or donations goes right back into running the charity.
Not-for-profits are not required to operate for the benefit of the public good according to law. A not-for-profit can simply serve its own goals without benefiting anyone else’s interests, this is often done by ‘selfless’ people who don’t want any compensation whatsoever and believe they’re doing what’s best in their communities
When a business becomes a partner, it should register with all states where the partnership does business to be in compliance.
If you are interested in setting up a non-profit, or not-for-profit, check out my expert tips here.
Learn more in my guide: How to Start Your Small Business Legally – Important Legal Requirements
Register Your Business with Government and IRS
Get Your Federal and State Tax IDs Number
The State where your business headquarters are located AND your chosen business structure determine how you will need to register your business.
While not every business must be registered with the government, I recommend that you do so to take advantage of the legal and tax benefits – plus get personal liability protection from business debts and lawsuits.
Once you properly register your company you will be issued an employer identification number or EIN for short. You need this number – even if you are working alone, self-employed, or hiring only subcontractors and no employees.
An EIN number is the business equivalent of your personal social security number and is used in various steps like opening up an account at a bank or paying taxes. Not all states require that you get one, but it might be worth getting if there’ll likely be more tax-related things coming ahead of time.
Registering your business with state and local governments is usually as simple as registering your company name. Here’s how to do register our business in your state:
Apply for Your Business Licenses and Permits
You are responsible for making sure your business has the proper federal, state, and local licenses and permits to operate legally. A pivotal part of this process for many entrepreneurs is determining what type of licensing they’ll need. Here are two ways to research which business licenses and permits you will need in your State and for your specific industry startup:
Online Business Lookup Tool – FREE
Business licensing is something that people often overlook when setting out on the entrepreneurial path–particularly those who have never started any kind of company before.
At Incfile they take the guesswork out of how to obtain a business license and the necessary permits which their easy-to-use business license look up tool here Yes it is free.
Simply select your State and niche industry and in a second you will know precisely which licenses you to require. Plus you will get links to permit applications and helpful guides.
Business License Research Package – LOW COST
You must understand how important it is for complying with local laws can be even if you’re not physically located within city limits! One example is meeting all requirements related to commercial zoning regulations like getting approved by your town council (as well as municipal planners).
Furthermore, don’t be fooled; your corporation or LLC may need more than one license to operate fully at the state level.
Here you can get the most up-to-date, state-specific information about exactly which business licenses you must obtain based upon certain factors such as industry type or whether it’s an online endeavor rather than brick and mortar shop.
Protect Your Company’s Intellectual Property Assets
If your new business develops new inventions, manufacturing processes or products you will want to protect your intellectual property with patents, trademarks, and copyrights issued by the US patent and trademark office.
Learn more in my article – What is Intellectual Property and Why it’s Important to Your Business
How to Start an LLC in New York State
Want to form an LLC in New York? Here is a list of forms you’ll need, fees, and other important information about the process.
Before deciding to form an LLC, you must understand what an LLC is and a viable business structure for your company. An LLC is a business structure offering limited liability to its members. Members of an LLC may include individuals, corporations, other LLCs, and foreign entities
Filing an LLC in New York: Forms and Fees
When it comes to starting an LLC, New York is a great place to start because the process becomes easy as long as you follow these simple steps. The forms and fees required are listed below:
Begin by completing the form DOS-1336 titled Articles of Organization – DOWNLOAD HERE.
Complete form with the following information for your new business:
- New York address for members to be contacted if legal actions, such as lawsuits, are filed against the company.
- LLC member signatures
- LLC name that meets New York state requirements – READ about LLC name regulations here.
Fees to Form LLC in New York
Submitting the Articles of Organization online costs about $200 and takes 15 days, and the Certificate of Publication requires a $50 fee.
Limited liability company operating agreement
To make your filing process legal, have your Articles of Organization (DOWNLOAD HERE) ready within 90 days.
Certificate of publication
Licensing Requirements for New York State
The New York Department of Health requires all restaurants to get and prominently display this permit on-premises. The health authority approves where the place is and if they can sell food.
To open your restaurant, remember to submit your application at least 21 days before your opening date. The maximum length of time a permit is valid for is two years and typically ranges between $200-$400.
A food service establishment permit is only one of the permits you will likely need. The State of New York’s website provides information about ALL the permits and licenses needed for running a restaurant. Find out which permits you will need for your NY restaurant startup here
You may also need other permits, like a building permit or a parking lot permit including these:
- Sales Tax – Read the NYS sales tax regulations for restaurants here
- Liquor & Wine License – Get more info here
- Sign Permit – Contact your local building department
For New York restaurants you can apply and get more information about liquor licensing on the Liquor Authority’s Division of Alcoholic Beverage Control website here. On the site, you will find various alcohol license categories, including one for dine-in establishments serving beer and another for restaurant wine. You may need to hire a lawyer because legal liquor license applications can be complex.
If you are going to serve a lot of people at your restaurant, you might need additional licenses and permits from both the fire department or police department. Check with your local government departments to approve the restaurant’s emergency exits.
The government of New York City has prepared a list of notices that restaurants also need to have displayed on-location. Access this helpful list here
Health and Safety Regulations
NY Restaurants are subject to MANY laws regarding food health and safety. The New York State Department of Health’s regulations for restaurants contain several dozen sections including employee handwashing, cleaning and sanitizing utensils, and ventilation. The Department of Health has a brief guide that can help you ensure that you are meeting these regulatory requirements.
Read more about the New York State regulations for different types of eateries such as dine-in, vending, mobile, temporary, and selling homemade foods here
When you’re thinking about a new food establishment in your city or town, remember that they’ll be monitored by the local health department regularly.
Officials from the health department can ask for a wide range of items to be inspected, through local authorities have a good deal of latitude on what they will inspect. Inspections cover not only the food itself – raw and prepared – but also other aspects such as refrigeration systems, cooking equipment, and waste disposal.
Your inspection grade needs to be displayed in order for it to be valid, and the local government will publish your inspection result online if they so choose.
State regulations on health and safety in foodservice establishments, as well as federal OSHA standards regulating such matters as eye protection requirements for the kitchen workers, are an important factor for any restaurant to consider. Read the OSHA restaurant manual here
Restaurant Insurance Needs
There are various risks associated with operating a restaurant. These risks include customers or workers falling on-premises, someone becoming harmed from hot liquid or broken glass, and someone getting sick to their stomach as the result of eating food prepared there. The risk of property damage or personal injury from more everyday business risks such as theft and fire are not to be taken lightly.
When looking for insurance, try to work with an agent who has experience writing policies for restaurants. Make sure your insurance includes sufficient coverage for your equipment, such as plates and stoves.
For injuries to people, make sure your general liability policy is adequate. This should cover people who slip at the restaurant’s front door as well as those who get sick from eating the restaurant’s food. In addition, you should make sure that your catering company has the proper vehicle insurance for delivery.
Get affordable Restaurant Umbrella Insurance here
New York State Business Sales Tax Information
Congratulations, you are ready to launch your New York business! Here is what you need to know about how to collect and pay sales tax in the state.
Tax Registration in New York State
In order to set up a small business properly, you must register with the New York State Tax Department before starting your venture.
To get more information and see if you need to register and pay sales tax, read these government tax publications:
Some businesses which sell taxable property or services must meet certain criteria to be considered a tax vendor. They must register and collect state and local sales taxes in New York State. Read more about this law of sales tax vendor presumption here.
Register for a Certificate of Authority
Before beginning or purchasing a business, you need to apply for the Certificate of Authority HERE using New York Business Express’s helpful website.
Get more information in this NYS tax bulletin – How to Register for New York State Sales Tax
Collection of New York State Sales Tax
Once you register for sales tax purposes, your company agrees to the following:
- Be responsible for collecting the tax that you owe on behalf of your customers.
- Prepare your sales tax return and submit it with the total amount collected.
- Create a separate account for sales tax receipts
The New York state tax law makes business owners personally responsible for payment of sales and uses taxes on applicable business sales. If your business is held liable for unpaid sales or use taxes, the Tax Department can take your assets to satisfy what the company owes.
Filing your New York State sales tax returns
New York businesses must prepare and submit sales and use tax returns quarterly, monthly, or annually with the New York Department of Taxation and Finance.
Helpful resource – 74 page Guide to Sales Tax in New York State
Step 4: Write Your Restaurant Business Plan
No doubt you’ve heard the old saying of one of my heroes Winston Churchill, “if you don’t plan – you are planning to fail”.
Nowhere is this truer than when starting a business.
Starting a business without any planning is one of the most common mistakes entrepreneurs make. Spare yourself the substantial loss of money, time, and much heartache by taking the time to write a business plan. A well-written business plan is one way you can invest in your future success!
The importance of writing the plan is not entirely in its finished product, but what you discover about your business as you prepare it. During the process of writing your business plan, you will uncover aspects of your business strategy that will not work.
Far better for your startup success and survival that you discover these weaknesses on paper – NOW – then adjust your business model accordingly- than to encounter these problems in your company costing time, money – and quite possibility your company survival.
Think of your business plan as a map for your entrepreneurial journey. You would not set out on a long hike across unknown territory without a field guide and a detailed map.
So, don’t dive into a new business and spend money, time, and emotional energy without a map – your business plan.
Your business plan must answer these 9 critical questions:
1. What is the purpose of your business?
2. Who are your target customers?
3. What are the benefits of doing business with you?
4. How do you plan to reach these customers?
5. Where will your company be located and what type of facilities will it need?
6. What kind of employees will you need, and how many people should work for your company at first?
7. Do you have any competitors in this market space, and if so, who are they and what differentiates them from each other and from yourself?
8. What does success look like for this business in one year, five years, and ten years from now?
9. What are the most important tasks that need to be completed before launching a new product or service?
More helpful resources to write your business plan
Step 5: Calculate Your Finances and Fund Your Restaurant
This is an important stage where you will calculate financial projections to determine if your business idea is profitable and determine your pricing strategy. Also, you will need to ascertain the amount of capital you will need for both your startup costs and ongoing working capital.
Calculate Your Startup Costs
Two Types of Startup Costs – Setup and Operational
First, you need to know that there are two distinct types of costs, those you will incur as you set up your company (Set up Costs or Startup Costs) and those that will continue to be expensed as you operate (Operational Costs, Expenses, and Working Capital).
One-time investment to open your store or launch your website includes such items as legal business formation, building renovations, and manufacturing equipment.
These are easier to calculate. You will research each item and simply add up the list for your total set up costs.
Ongoing expenses to continue business operations including rent, supplies, employee salaries – and most importantly working capital. These costs are more difficult to calculate because they have many more variables. As your sales increase so will your labor and material and inventory needs.
Read my article about how to correctly calculate your startup and operational costs here.
Forecast Sales & Expenses
The next step is to forecast your sales and expenses and generate a business budget.
I have a that I say that is funny but also true. I tell all new entrepreneurs to take their financial projections and cut their sales in half and double their expenses.
Then, if the numbers show that they will make money they should go forward to launch their business. Certainly, simplistic, but it illustrates that most entrepreneurs overestimate their sales and underestimate their expenses to their own detriment.
Here is the right way to create a business budget.
Define Working Capital Requirements
From one entrepreneur to another, you need to get wise about working capital, today, if you plan to keep your business doors open. Because the #1 reason for business failure is lack of working capital. Don’t become a business failure statistic.
Working capital refers to the funds that help you meet the daily expenses and needs of running your business, such as payroll or paying for software, tools, and supplies.
From a business management perspective here’s all that you need to know about working capital in my article about what it is, the amount you need, how to manage it like a pro, and if you are short on working capital how to either get financing and how to reduce your working capital needs without a loan.
Determine Your Prices
Begin your financial planning by determining your best pricing. Pricing your product and service is a bit of art-science. There are multiple ways to determine your best price, cost plus, and market demand & supply.
There are different methods to calculate your prices for your new startup business based on multiple factors such as market demand, competitive prices, and costs expenses.
These are the most often used pricing strategies for small businesses with recommendations for which methods fit different types of businesses.
This method is when you price your product higher than your competitors. This technique is often used at product launches to create a high-value perception in your customer’s minds.
Market Penetration Pricing
This concept is to gain buyers by offering the lowest prices on goods and services to enter a crowded marketplace. It is common for entrepreneurs to use this technique initially. If not planned and executed carefully this is the most dangerous type of pricing strategy for your bottom line and business survival.
By utilizing the power of people’s emotions to buy is the key to success with this pricing strategy. Many consumers consider the price of a particular item a major purchasing factor. Use this to your advantage by reducing your price a little and changing your buyer’s minds a lot. You have all seen the $199 specials, which are only $1 less than two hundred but seem to be a better bargain.
Read my full article about how to best price your products and services here.
Fund Your Business
Now that you have a great business idea, you will need money to get started in your new venture.
While there are some businesses that you can start with almost no money some are even free. Most startups require some form of a business loan or capital investment.
Startup Funding Resource List
Here are some good ways to fund your startup launch. Personal savings
- Loans – Personal and business
- Credit Cards (Read my entrepreneur tips here first)
- Partners & Investors (Read my article Business Partnerships 101)
- SBA Loans
- Small business grants – (Read my list of startup grants with applications here)
- Product Licensing – (Read my article about how to sell your business idea here)
Read my full list of 17 Proven Sources For Startup Capital
TIP: If you need to finance your small business consider top recommendation for small business startup loans – Kabbage.com. Read my review of Kabbage loans with verified customer reviews and experience
Step 6: Pick Your Business Location in New York
Choosing the right location for your firm is one of the most important decisions you will make at the onset of your business launch.
Take your time and do your homework of research and planning, before committing to a lease on retail, restaurant, or office space. Study the demographics of the area and surrounding towns, your competition nearby, and much more. Here are the questions you need to ask before signing a lease:
7 Questions to Determine if Location is Good for your Business
- Image – Does this spot project the brand image you desire?
- Competition – Are neighboring businesses competition or complementary?
- Labor – Will you be able to find employees easily, or is it too far to commute?
- Growth – Is there room for future expansions?
- Vendors – Are vendors able to deliver here efficiently and at a reasonable cost?
- Security – What is the crime rate?
- Zoning – Is this location zoned for your type of business activity?
Step 7: Buy Restaurant Insurance
Get Business Insurance Policy
Running a business is risky. Injury, natural disaster, or lawsuit can force you out of business and leave your family without income! Business insurance protects against these unforeseen risks to keep things running smoothly so the company doesn’t have to close its doors due to an accident or major incident.
Think about it. If your business gets sued, you will lose money that could have easily been prevented by purchasing the right insurance policy!
Insurance Regulations: Federal IRS, State, and City
The protections you get from choosing a business structure like an LLC or corporation typically only protect your personal property and even that protection is limited.
In today’s world, it is impossible to protect everything. Even with the most comprehensive coverage in place, there are still many gaps that can leave your business exposed if you don’t have adequate insurance protection for both personal and business assets as well!
There are a number of aspects to consider when determining the right type and level of business insurance. For example, you will need different coverage if your company employs other people than just yourself or is within certain industries.
The federal government requires every business with employees to have workers’ compensation, unemployment, and disability insurance; however, there are many additional types available depending on factors such as industry size among others which make it difficult for employers who want their employees protected against all potential risks from liability exposure that could arise from something they do at work like slip-and-fall accidents or even injury caused by faulty equipment in an industrial setting.
To navigate the complex world of business insurance needs I recommend the Coverwallet easy-to-use tool here that will quickly tell you exactly what insurance policies you need and provide competitive price quotes from top insurers.
Step 8: Open a Business Bank Account
To accept customer payments, cash, checks, or credit cards, your business will require a separate bank account from your personal or family bank accounts.
Please do not make the beginner entrepreneur run your business through your personal account. You will be making it harder on yourself since it will be tougher to manage transactions, reconcile checking accounts and prepare your tax returns.
All small business experts and the Internal Revenue Service recommend the separation of business and personal bank accounts. By opening a business account, you make this possible. Read my article about how to open your new business bank account here
Additionally, having a business bank account is an important credibility factor to make your business idea a legit company and not just a dream. Also, for corporations, LLC’s and so forth, a separate and individual bank account will be necessary.
Depending on the bank and type of account required, several business days may be needed to get things set up, so don’t wait until the last minute to get things set up.
Set Up Your Accounting Software System
Whether you’re starting a sole proprietorship or an LLC, having the proper accounting setup is essential. It is far better to have your bookkeeping established right from the start rather than find out down the road that you’ve done things wrong and now owe money to the IRS.
I learned this the hard way in one of my early ventures. Start bookkeeping with your second dollar – the first dollar you put in a frame over the door or on your desk 😊
Depending on the particular business formation type you have chosen, there may be reporting requirements for the accounting, especially payroll and taxes, that require regular and ongoing attention. Consult the IRS for your tax payment and reporting schedule.
I recommend the easy to use, but flexible enough for growing companies, software Freshbooks. From sending email invoices, accepting credit cards, and tracking expenses – it is simple, effective, and affordable. Check out the discount sale here.
Step 9: Build Your Restaurant Team
Unless the business is completely automated, personnel (employees, freelance, or subcontractors) will likely be required. After all, it’s good old-fashioned hard work that built American business. And it will continue to be the labor of people that make businesses succeed.
In the case of hiring staff, there will be certain legal considerations that must be taken into account.
- Staff hierarchy – Are management in place? Who runs the various business operations?
- Deductions & taxes – Accounts with the IRS setup? Software or accounting in place for payroll?
- Health care and benefits – Are your staff protected?
- Working conditions – Does the working environment comply with all state regulations?
Step 10: Select Your Vendors
Choosing the right supplier for your business is vital. If your supplier isn’t reliable or doesn’t provide high-quality products, your company will struggle to deliver well-priced goods and services that meet your customers’ expectations.
So how do you choose the right supplier? Review these criteria to select the best possible suppliers for your products, components, or raw materials.
- Lead time
- Delivery Schedule
- Shipping Fees
- Minimum order quantity
- Dropshipping capabilities
- Quality assurance methods
- Payment terms
- Credit line accounts
- Return policy
- Communication standards
Here are my best tips on how to find affordable wholesale sources
Negotiate Lower Supplier Prices
Negotiating is a crucial skill for any business person. In many cases, you are the only one in your company who can negotiate with suppliers and vendors on price.
Here are tips on how to negotiate lower material and inventory prices from your suppliers and vendors. Remember every dollar you save on your supply bill is another dollar of profit!
- Negotiate with suppliers and vendors to lower material and inventory prices – don’t accept the list price
- Know the market price for materials, products, or services – do some research before contacting vendors
- Research other companies that offer similar goods or services in your industry
- Find out what competitors are paying for materials and inventory
- Ask about volume discounts if you buy a lot of materials from one supplier – BUT do not overbuy because startup companies need to avoid tying up a large amount of capital in materials.
- Know what your bottom line is before negotiating and don’t be afraid to ask for it
- Be prepared to walk away from a deal if you can’t get the price you want
Step 11: Create Your Restaurant Brand and Advertise
Branding Your Business
Branding your business involves more than just naming the company. It also involves having a custom-designed logo, a signature font, unique company colors, and even a slogan for your business. Here’s how to use branding to make your products and company memorable.
Get Your Perfect Logo Design
Can you think of a major business without a logo? Bet you can’t!
That’s because major brands are built on the foundation of strong logos, the single most important visual element of branding.
So, you know that you need a standout logo for your company. But how to create one?
Learn how I created my newest brand logo in this comprehensive 99designs step by step tutorial complete with over an over-the-shoulder video series.
Publish Your Company Website
Take your reputation online and build a company website.
Your prospective customers are increasingly turning to the internet for answers but not everyone goes through the necessary steps of getting online for their company. Get a competitive advantage and start your website early in your launch.
Websites are a fantastic way to interact with current and potential customers. They offer the customer easier ways to reach out, make an inquiry, or simply get your name out there.
Using a quality vendor – I recommend Bluehost – and a pre-done WordPress template (of the hundreds to choose from) you can get online in days for a super reasonable price – under $5.00. During this promotion, you can even get a FREE domain name included from my preferred vendor Bluehost.
Set Up Social Media Profiles
You may not have the cash to launch your new business, but you can still make a name for yourself with social media. Use it as an outlet to tell people about what’s coming and offer coupons when that time comes!
Depending on your target audience, certain social media platforms will be more beneficial than others. Check out this report of the most popular social media platforms and user demographics . Match your target customer with the site they frequent most and focus your efforts there first.
Advertising Your Products
Advertising comes in many forms, from billboards to a website to a storefront sign. In the good old days, there was a focus on flyers, and today it’s social media. Regardless of the method, getting your business name out is essential to growing your client base.
Defining a solid strategy for advertising and setting an advertising budget is a significant step for any business. Here are some low-cost advertising ideas to get you started:
- Advertise on social media platforms like Facebook and Twitter
- Get your business listed in the phone book or online directories
- Ask for referrals from friends, family, and acquaintances
- Write a catchy slogan that will catch people’s attention when they see it or hear it in passing
- Create a Facebook page for your company and post content related to your business
- Use Google Adwords to advertise on other websites
- Write an article about your business and submit it to relevant blogs or magazines
- Design flyers that are eye-catching, informative, and easy to read
- Print business cards printed and hand them out to potential customers
- Advertise on social media sites like Facebook, Twitter, or Instagram
- Put up flyers around town with your contact information
- Place ads in local newspapers – display or classified service directory
- Send direct mail to potential customers with coupons
- Start an email newsletter campaign with the goal of building relationships with current and future customers
- Promote your products or services on sites like Craigslist, Facebook Marketplace, or eBay
- Add your website to search engines and directories
- Consider using YouTube informational videos as marketing tools
- Create flyers to post on bulletin boards and give to people you meet at events
- Start an industry blog and post regularly
- Use Google My Business to create an online business profile with photos, location, hours of operation, etc.
- Make sure your website is mobile-friendly and has contact information
Grand Opening Events
If you are launching a new retail store or restaurant, go ahead and have a grand opening event and invite the media to get the buzz going and generate powerful word-of-mouth advertising.
Step 12: Promote Your New York Business
After launching your business, it can be hard to know what to do next. If you are a small business owner who is looking for advice on how to grow their company, we have some tips that will help get you started! Here are five ways that you can grow your startup after launch:
1) Introduce new products and services
One of the best ways to grow your company is by introducing new products and services that will diversify how you offer value. For example, if a business creates coffee mugs with their logo on them they can introduce travel cups or t-shirts as well for customers who are looking for more than just one item. New products breathe new life into companies and give you opportunities to contact customers and promote your entire line.
If you are looking for new product ideas, try talking to your customers and seeing what they think would be valuable. You can also ask potential clients about their needs before presenting a solution which helps make sure that the products or services introduced will meet customer expectations in order to create loyal fans who come back time after again!
2) Collaborate with other companies for joint ventures
Join forces with other companies who have a similar goal in order to get the word out about your company and product. For example, if you are an office supply store then contact local stationery stores who specialize in paper or ink pens so that they can promote their products as well at trade shows together on one table with information for both companies’ customers available side by side!
3) Get involved in trade shows or conferences
Trade shows are excellent places to meet new customers and old customers who have not visited the company in a while! A good trade show for your small business might be one that specializes specifically in what you offer.
Make sure to bring plenty of promotional materials and enough staff members so everyone can answer any questions or concerns immediately
Business partnerships can be found at industry conferences too! Networking is essential to the success of a startup. Attend relevant conferences and introduce yourself as an entrepreneur with new ideas! Networking can be done online through social media, but it will have more impact if you meet face-to-face at industry events or trade shows that are catered specifically for your niche market
4) Expand into new markets
Increase your marketplace by shipping your goods internationally or expand your service area to new cities or states.
If this sounds like an option for growth that would benefit both parties then consider partnering with another company outside of your area in order to share distribution and marketing costs.
5) Run contests and sweepstakes
Promotional contests are a great way for companies to increase the visibility and awareness of their brand. The purpose is typically engagement, loyalty, or sales promotion rather than a marketing campaign with the sole aim being lead generation (though contests can be used in this way).
The best way to use sweepstakes is to tie it into a promotion. For example, you could offer discounts for the first 20 customers who ordered your product after following two simple steps on social media or fill out and submit an entry form from our website is fine too!
It can be a daunting task to start your own restaurant, but it is not impossible. If you are considering opening your own eatery in New York City or one of its boroughs, we hope this post has given you some insight into how to get started and what the process will entail.
You’ve done the research, you know what you need to do and now it’s time for action. Get out there, get your business started and make New York proud! Good luck on opening day!
Additional Resources to Start a Business in the State of New York
State of New York Business Startup Resources:
Small Business Development Center
The New York Small Business Development Center (NYSBDC) is a resource for small business owners and entrepreneurs in the state of New York. We provide confidential assistance, training, and research to help individuals grow their businesses.
New York Business Express
NY is open for business. Learn how to start and grow your company with the help of this great resource – New York Business Express
New York Business Resource Lookup
With the Incentive Wizard, you’ll be able to explore all the New York State resources that may help your business succeed. Whether it’s through a tax credit or funding for small businesses with growth potential – they have something just for you!
NYS Minority and Women Business Development (MWBE) Program
If you’re looking to be certified as a minority- or woman-owned business, then the New York State Empire Development Office has all of your needs covered.
What is an MWBE? The Division of Minority and Women’s Business Development (MWBD) certifies businesses through its $1 million certification program that assists firms in acquiring state contracts with primarily female-, minority-, veteran-owned companies by providing them with technical assistance on procurement processes and approaches for doing so successfully. If you are interested in becoming part of this group, contact them today!
The SCORE services cover all the phases of business operations, including finance and strategy. Here you can find a mentor, take a workshop or browse the library. Visit their website to find your local New York chapter. Powered by the US Small Business Administration.
New York Economic Development – Division of Small Business
The Empire State Development’s Small Business Division provides the necessary support to help businesses grow. They offer a variety of programs and initiatives that are focused on helping small-time entrepreneurs achieve their goals in life. The division also assists entrepreneurs in maximizing opportunities for success by providing them with resources such as education information on topics like financing to help maximize their chances at succeeding.
New York Chamber of Commerce Directory
Business & Professional Associations In New York
Searchable database of over 3,000 associations at Dun & Bradstreet covering all industries
New York State Department of Licensing Services – Division of Secretary of State
The New York Department of State’s Division of Licensing Services (DLS) oversees 35 occupations throughout the state and licenses over 800,000 individuals and businesses.
Additional Resources to Open Your New York Restaurant
Startup Resources for the Restaurant Industry
FREE Business Tools to Build Your Restaurant
SCORE: SCORE is a group of people who can help you. They are the largest network of volunteers who are business experts. They work with the SBA to teach people about business with 10,000 volunteers in 300 chapters. Experienced business owners will offer counsel and help to startups in the form of counseling services, business tools, and training programs.
Small Business Administration (SBA): There is the best place in every state to help you with your business. It has resources and training and entrepreneur experts who are there to guide you.
Small Business Development Centers (SBDCs): Resources for people with small businesses vary by location. Some have help with business planning, access to financing, counseling services, or classes.
Office of Women’s Business Ownership helps women who are starting or already own small businesses. They do this by providing business training and counseling, access to federal contracts, and capital. The OWBO oversees Women’s Business Centers find your nearest center here.
Business Grants and Loans
Here is information about the currently available current government grant programs for small businesses. More grant assistance programs are listed at Grants.gov.
Small Business Innovation Research Program (SBIR). Offers grants to small businesses so they can research technology and then take the results to market. This is a program where companies can get awards if they are excellent in science and technology. To get an SBIR grant, you need not be a nonprofit company and meet these other qualifying requirements.
Small Business Technology Transfer Program (STTR). STTR program funds research in the R&D arena, similar to how SBIR does. This program differs in that it requires small businesses to formalize their research collaboration with an academic institution. To get STTR grants, you must not be a nonprofit company and meet these other requirements.
USDA Rural Business Enterprise Grant Program. Programs that give small businesses advice and training. The company must have less than 50 workers, less than $1 million in gross revenue, and be located in a rural area. Grant money is for projects that will benefit people in rural areas. This includes towns, state agencies, nonprofit groups, colleges, cooperatives, and tribes.
U.S. Department of Commerce Minority Business Development Agency (MBDA). Specific grants and loans for minority-owned businesses are offered. Get more information at your local MBDA Business Centers. Find the one center on their website: MBDA.gov.
U.S. Small Business Administration State Trade Expansion Program (STEP). This program is for small businesses that want to sell their products outside of the U.S. Money is given by the federal government through the state government. Companies can use the funds to take part in trade missions and shows. In addition, they can travel to international markets and design foreign marketing campaigns also.
U.S. Economic Development Administration (EDA). Department of Commerce offers funds for activities that help the economy in rural regions. Applicants can apply for a variety of different grants.
Startup Financing for Restaurants
LiftFund – LiftFund offers loans of $50,000–$250,000 to businesses in low- to moderate-income communities in 13 states. Your business can also qualify if more than 50% of your full-time staff is low-income, or if your staff live in low- to moderate-income neighborhoods.
Thinking Capital – Thinking Capital is a seed-stage investment fund that invests between C$5,000 – $300,000 in Canadian restaurants. They accept applications online. For over 15 years, Thinking Capital has helped more than 10,000 small to medium-sized business owners grow.
Business Center for New Americans – New York City Restaurants – The Business Center for New Americans in NYC provides loans of $500 to $50,000 to small businesses in the restaurant industry owned by newcomers to the United States. To take apply and qualify, you must present a startup budget.
Food-X NYC accelerates new restaurants, as they start off with $50K in capital investment and receive a percentage of the company’s equity.
BIP Capital – BIP Capital, a startup investment firm that invests in quick-serve restaurants in the United States, is located in Atlanta.
Sun Capital Partners, Inc. – Sun Capital is one of the largest and most active restaurant private equity investors in the United States.
There are hundreds of professional restaurant and food industry trade associations. Some focus nationally, others regionally by State. Listed below are the largest.
Browse the list of the 100 most influential food trade associations here.
National Restaurant Association – The National Restaurant Association is the world’s largest foodservice trade association and advocates on behalf of more than half a million food industry firms. The organization supports America’s restaurant and foodservice industry by providing advocacy, education, and the latest research.
American Culinary Federation – The biggest professional organization for chefs in North America. The American Culinary Federation, Inc. (ACF), a professional organization for chefs and cooks. Today, ACF provides education and training programs in the culinary arts. Altogether, ACF operates the most comprehensive culinary certification program in the world.
International Franchise Association – The International Franchise Association (IFA) started out by helping national franchises. It is now a global resource that supports and promotes franchising and helps to protect them. They are all about making the future of franchising better.
State Restaurant Associations
Listed below are a few State restaurant associations. Find your State’s trade association here
New York State Restaurant Association – The New York State Restaurant Association is a group that helps restaurant owners. They work together to make things cheaper and give you advice on how to do your job well. They also help you learn good ideas (like what foods go together) by providing training resources for members. They are a nonprofit organization focused on supporting the restaurant industry in New York State.
California Restaurant Association – They are the unifier of the restaurant industry in California. They facilitate effective networking within the food industry and encourage governments to make legislation that benefits restaurant entrepreneurs. Join to participate in business-building opportunities and meet like-minded food business people.
National Restaurant Show – The annual US National Restaurant Association Show is one of the most notable restaurant industry trade shows.
The International Restaurant and Foodservice Show of New York – Restaurant, food service, and hospitality professionals are encouraged to attend. Get a taste of a variety of products, demonstrations, and more at the largest food event in the northeast. Learn more about the trade show’s education program and how it provides you with valuable information on the latest trends in their industry. The floor of the event is lined with products and equipment from exhibitors, which include 550+ vendors and top restaurant suppliers.
More Food Industry Trade Shows
Search for food and restaurant trade conventions in this database complete with upcoming convention dates and links show websites.
Food Industry Publications
Nation’s Restaurant News – Nation’s Restaurant News is the only independent publication for restaurants. NRN provides information to readers about growing their business. NRN’s editors explore new technology, industry strategy, marketing, food trends, and franchising news.
Restaurant News Resource – A leading news and knowledge base service for the Restaurant industry.
My Favorite Business Startup Tools
To help you start your business right, I recommend that you use the tools I use every time I launch a successful new venture.
They are all top-rated and affordably priced even for the leanest startup budgets. Some are even FREE during promotions! And I share exclusive discount coupons with you also!
Entrepreneurs, let’s get busy launching YOUR next successful company…
Set Up Your Legal Company – I highly recommend Incfile.com as the best way to set up your LLC, INC, or DBA. They are fast, professional, and today the service is FREE! Yes, you pay $0 plus required fees in your State.
Reserve Your Domain Name – Your website address is a critical part of your branding success. Having your site listed at the top of search results so that customers can easily find you will fuel your success.
PS You don’t even need to have your company name finalized – Bluehost will give you the FREE domain name as a credit to your account.
Design Your Logo Brand – I loved using 99designs to create my logo for this blog. Running a logo design contest was fun, economical and resulted in so many great logos design I found it hard to choose the final look!
PLUS I have this exclusive discount for my readers to save $99 if you use this link, it will be automatically added to your account.
Get a great logo design and save $99 discount/coupon