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Licensing For New Restaurant Owners: Important Facts For You To Know

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Licensing For New Restaurant Owners: Important Facts For You To Know

In the next installment of our restaurant startup series, we explore the regulatory procedures that new owners need to follow and complete as they open up their businesses.

You have the ideas, the budget, and the plan all set, but there is still more left to do before you can open your doors to the public. Permits for individual elements of the business need to be filled out and processed, which is a very delicate and time-consuming process that deserves careful attention.

New restaurant owners should consult their state's website to determine what licenses are required for operation and how to obtain them. These requirements differ by location and in part depend on the characteristics and amenities of the restaurant. When researching licenses, one must be careful and thorough; missing out on even one of these licenses could result in serious financial and legal liabilities.

While license regulations vary from place to place, there are some regulations that must be followed regardless of region or business operations. For instance, restaurant owners, like any business owner in America, must have business licenses to legally be considered an owner. New owners must also have an Employer Identification Number (EIN) given by the IRS via their website.

So, what else does a restaurant owner need a license for? Truth be told, there is relatively little that an owner can do without licenses. Signage, the right to sell alcohol, playing music or hosting live entertainment, and more all require a license. Sure, it seems like a burden, but it is all for the purpose of making sure that a restaurant's operations are official, legal, and reliable.

There are particularly important licenses related to health and safety. Everything from the restaurant building to the employees must be cleared for foodservice operations. With these health-related licenses comes the added task of preparing for routine inspections. For the business to continue operating, they must pass regular health inspections to ensure that the premises, materials, and day-to-day business are in accordance with health and safety laws.

Many licenses must be bought from their respective offices. As a result, any starting budget should account for the costs associated with the necessary licenses. A new owner also should expect the process of obtaining licenses to take a considerable amount of time. The EIN alone is a lengthy procedure, as the IRS only issues one of these per day, meaning an appointment is necessary. Set up a schedule for obtaining licenses to make sure that everything is in place before the restaurant opens for business.

Even after acquiring the necessary licenses, the owner should keep track of which ones need renewing and when. The Small Business Administration notes that it is generally harder to get a new license rather than renewing an existing one on time, which makes sense given the process of obtaining licenses before opening up the restaurant.

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Licenses are vital components of restaurant ownership. It is important to be diligent, attentive, and careful when researching and acquiring licenses to protect the restaurant financially and legally.

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Below you will find resources to guide you through the application processes, as well as the webpage where you can apply for an Employee Identification Number.

For EIN Applicants: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

Instructions for Business License Applications: https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits

An Example of a State's Business License Process from the Florida Department of Business and Professional Regulation: http://www.myfloridalicense.com/DBPR/hotels-restaurants/


An Example of a State's Alcohol Licensing from the Georgia Department of Revenue: https://dor.georgia.gov/alcohol-tobacco/alcohol-licenses-permits/alcohol-licensing


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