The short version
Plan on
- 6 to 12 months from concept to opening day
- 3 to 6 months for licenses and permits
- 3 to 6 months of operating cash in the bank at opening
Start early on
- The liquor license, which can take the longest
- Health department plan review, before construction
- Financing, which takes 4 to 12 weeks
A 2018 survey of 350+ independent owners found a median cost to open of $375,000, or $275,500 in a former restaurant space. Taking over an existing restaurant space is the biggest single way to cut the cost. Build your own budget with the startup cost calculator.
The steps, in order
Exact rules depend on your city, county and state. This is the usual order. Check each step with your local agencies.
| Step | Typical time | Typical cost | Help on this site |
|---|---|---|---|
| 1. Concept, business plan and budget | 3 to 6 weeks | Your time | Startup cost calculator |
| 2. Form the company and get an EIN | 1 day to 2 weeks | $35 to $500 state fee. EIN is free | LLC fees by state |
| 3. Line up financing | 4 to 12 weeks | Interest and fees | Restaurant loans |
| 4. Find the space and check zoning | 4 to 12 weeks | Deposits, often a few months' rent | |
| 5. Apply for the liquor license | Weeks to many months | Hundreds to tens of thousands of dollars | Liquor license cost by state |
| 6. Health department plan review, then building permit | 1 to 3 months | Often around $1,000 for plan review | |
| 7. Build-out and equipment | 8 to 16 weeks | The largest part of the budget | Equipment financing |
| 8. POS, payroll and back-office systems | 2 to 6 weeks before opening | Hardware plus monthly software | POS comparison grid |
| 9. Insurance | Before you get the keys | Hundreds of dollars a month | See below |
| 10. Inspections, certificate of occupancy, food service permit | 1 to 2 weeks | Permit fees vary by county | |
| 11. Hire and train staff | Start 2 to 3 months before opening | Pre-opening payroll | Tip pool calculator |
| 12. Soft opening | 1 to 2 weeks before opening | Food and labor |
1. Plan the concept and the budget
Write down the concept, seat count, hours and price range. Then build the budget line by line: deposits, construction, kitchen equipment, furniture, POS (see what a restaurant POS costs), licenses, opening inventory, pre-opening payroll, marketing and a cash cushion. Lenders will ask for exactly this. The startup cost calculator does the adding and shows how much you need to borrow.
Compare POS quotes, free
How many POS stations do you need?
About a minute. No cost, no obligation.2. Form the company
Form an LLC or corporation before you sign anything, so the lease, licenses and bank account carry the business's name. The SBA's guidance is to get your EIN right after you register, because licenses, permits and the bank account all need it. The EIN is free from the IRS. Our restaurant LLC guide lists the filing fee and yearly fee for every state.
3. Line up the money
Most restaurants combine the owners' cash, investors and a loan. An SBA 7(a) loan is the usual first stop for build-out and equipment, because the SBA caps the rate. Equipment financing can cover kitchen gear on its own. See restaurant loans and equipment financing for rates and options.
4. Find the space
A former restaurant with a hood, grease trap and walk-in in place costs far less to open. In the 2018 survey, the median cost was $275,500 in a former restaurant, $425,500 in a converted space and $650,000 for new construction. Before you sign, confirm zoning allows a restaurant (and a bar, if you plan one), and ask the health department what the existing kitchen needs to pass.
5. Start the liquor license early
Rules and costs vary more than anything else on this list. Some states charge a few hundred dollars a year. Quota states limit the number of licenses, so you may have to buy one from another owner. Many applications require public notice and a waiting period. Check your state in our liquor license cost by state table.
6. Permits and build-out
Most health departments review your kitchen plans before construction. Then the building department issues the permit. After the build, you need final inspections, a certificate of occupancy and the food service permit before you can open. Fees vary by county. One example: a proposed 2025-26 fee schedule for Snohomish County, Washington, lists $1,100 for plan review and $745 to $1,300 a year for a food service permit, by seats and risk level.
7. Pick your systems
Cost every dish with the food cost calculator before you print the menu, or use the free recipe cost, inventory and prime cost spreadsheets. Choose the POS early enough to build the menu, train staff and test payments before the soft opening. Payroll, scheduling and inventory should connect to it. Compare options in the POS comparison grid and our best POS for small restaurants list.
8. Insurance
Landlords and lenders want proof of coverage before you get the keys. Insureon publishes the median premiums its restaurant customers paid:
| Policy | Median per month | Median per year |
|---|---|---|
| Business owner's policy (property + liability) | $337 | $4,045 |
| General liability | $192 | $2,300 |
| Workers' compensation | $118 | $1,415 |
| Liquor liability | $45 | $546 |
| Cyber liability | $129 | $1,552 |
Insureon notes most of these customers have fewer than five employees. A larger restaurant pays more, especially for workers' comp.
9. Staff, training and certifications
Many states and counties require food handler cards for staff and a certified food protection manager on site. ServSafe's online food handler course costs $15. Alcohol server training is required or encouraged in many states. Start hiring two to three months before opening, and budget pre-opening payroll for training shifts.
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How many POS stations do you need?
About a minute. No cost, no obligation.Common questions
How long does it take to open a restaurant?
Usually 6 to 12 months from concept to opening. Licenses and permits often take 3 to 6 months, and build-out takes 8 to 16 weeks. A liquor license in a busy city can take longer.
How much does it cost to open a restaurant?
A 2018 survey of independent restaurants found a median of $375,000, or $3,586 per seat, excluding real estate. Opening in a former restaurant space was cheapest, at a median of $275,500. Costs have risen since, so use these as a floor.
What licenses do you need to open a restaurant?
Usually a business registration and EIN, a state sales tax permit, a building permit and certificate of occupancy, a food service or health permit, food handler and manager certifications, and a liquor license if you serve alcohol. Many cities also require a sign permit and a music license.
What should I do first?
Write the budget, then form the company and get the EIN. Nearly every later step asks for the business name and tax ID.
Sources
- Toast: How long does it take to open a restaurant (phases and timeline)
- AZ Big Media: RestaurantOwner.com cost to open survey (2018)
- SBA: Apply for licenses and permits
- Insureon: restaurant insurance cost
- Snohomish County Health: food permit fee schedule
- ServSafe: Food Handler online course price
- Resy: cost to open a restaurant
