New York, a city that never sleeps, is a key metropolis of the USA. With diners flocking back to restaurants in the new normal, several restaurants have had to expand their capacity and hire new employees. The competition might be daunting, but the sweet aroma of success and the lure of low rents will drive you in the right direction if you know how to start a restaurant in New York.
Tips To Start A Restaurant In New York
New York, the city of hopes, adds life to the dreams of a gourmet. If opening a restaurant has been your dream, then you must have conducted thorough market research and have the concept of your restaurant ready.
But what next? Let us delve deeper to get an insight into how to start a restaurant business in New York.
1. Formulate A Business Plan
This is not only the first step towards setting up your restaurant but also the most crucial one. A sound business plan will serve as your guide, contain your view of the restaurant, future plans, business overview, and financial projections.
2. Secure Funding
Now that you have a business plan in place, it’s time to think about turning your dreams into a concrete restaurant. You must decide the funds needed to start a restaurant business in New York. Once you have the numbers in place, anticipate the sources of funding for your business, including self-funding, loans, and investment from VCs and Angel Investors.
3. Find The Perfect Location For Your Restaurant
Choosing the right location is imperative to the success of your restaurant. New York has five boroughs with distinct vibes, attractions, competition, and flavour.
- Manhattan is synonymous with tall buildings, picturesque locations, Central Park, Times Square, excited tourists, and through the roof rents. It is the most expensive borough in New York, which witnesses the highest footfall. You can find almost any type of restaurant in Manhattan, and for a new restaurant owner, the competition and the high cost of real estate might be a little testing.
- The Bronx is popular for the Bronx Zoo, Yankee Stadium, Fordham University, and Manhattan College. Attracting ravenous tourists and students alike, the Bronx offers more affordable real estate options than Manhattan.
- Staten Island is an economical alternative to Manhattan and Brooklyn. You’ll get the chance to cater to families and incur fewer costs.
- Brooklyn is fast becoming the trendiest location in New York. It is home to an eclectic mix of people and might be a good starting point for your business. Since it’s becoming so popular, the real estate rates are also increasing, but your business might benefit from the busy eating and drinking scene.
- Queens is the largest and the most populous borough in New York. Connected to Manhattan via a subway, Queens has a thriving nightlife and might provide plenty of new opportunities for a new business.
4. Get The Required Zoning, Licenses And Permits In New York
After deciding a location for your business, you must get zoning permits. To save you time and money, and your restaurant from legal formalities, it’s recommended that you consider taking over a space that was already a restaurant. If you are constructing a new spot, ensure that it is a business-zoned area, and submit the spot’s blueprints to the Department of Buildings.
After getting your zoning permits, you must focus on getting the required licenses and permits to open your restaurant business in New York. The process is painless, and you will be guided through it step-by-step. Keep your Employer Identification Number (EIN) handy, while filling the applications. You will have to apply for:
- Business Registration: Depending on your county, business registration in New York might cost between $100-$120.
- Restaurant Permit: A restaurant permit in New York costs $280 and must be renewed annually.
- Food Protection Certificate: You and your staff members can take free online food protection courses. The final exam has to be given in person and costs $24.60 for each person.
- Liquor License: If you want to serve liquor in your establishment, you must have a liquor license.
Restaurants also need to adhere to the:
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- Kitchen Equipment Regulations: The commercial cooking tools and appliances, like ovens, fryers, etc., must have a range hood.
- Fire Code Regulations: Ensure that your space and equipment is in accordance with New York City’s Fire Code Regulations.
- American Disability Act (ADA): To make your restaurant accessible to all, you must comply with the ADA guidelines.
5. Insure Your Restaurant And Get Familiar With The Taxes
If you insure your restaurant from the beginning, it will help protect you against unforeseeable circumstances, like fires, damage to the restaurant, employee injuries, and customer lawsuits. To keep your dreams from shattering, bubble-wrap them. Insurances required by the state are:
- Workers Compensation Insurance: This insurance pays the medical and rehabilitation bills if an employee gets injured on the job.
- Liquor Bond: This is needed to apply for a liquor license in New York.
Insurances you must consider to protect your assets in the long-term are:
- General Liability Insurance: This will help protect your restaurant against financial losses related to third-party claims and property damage.
- Liquor Liability Insurance: If you plan on selling liquor, this insurance is a must, and it will protect your restaurant if a customer gets drunk and causes damage to your restaurant.
- Commercial Property Insurance: This will help save your business against fire and other such damaging instances.
- Food Contamination Insurance: If your food items get spoiled due to power or appliance failure, this insurance will safeguard your business against losses and legal fees associated with such claims.
After protecting your restaurant business, take a look at the taxes your business will be subject to before you start your restaurant business in New York. The taxes are:
- Income Tax
- Payroll Tax
- City Sales Tax
- New York State Sales and Use Tax
- Sales Tax for food and beverage sales
- Metropolitan Commuter Transportation District Surcharge
6. Assemble Your Team
Conceptualizing and getting a restaurant off the ground requires significant expertise, funds, and hard work. Build your restaurant team by hiring the right people who will make your restaurant stand out. Hire experienced management staff, like the chef, cashier, and manager, service staff, such as waiters and busboys, and kitchen staff. Ensure that the menu designed by your chef is attractive, the presentation of the dishes sumptuous, and the staff behaviour welcoming.
Also, maintain a healthy relationship with your vendors and suppliers. You must have more than two suppliers and vendors to not only compare prices but also to serve as a backup.
7. Invest In A POS Software
Investing in a robust POS is essential to streamline all your operations, including order taking, reporting & analytics, billing, employee schedules, improved marketing and customer service, and increasing your profit margins.
Conceptualizing, starting, and running a restaurant business in the Big Apple is no small feat, but it can be extremely rewarding if you follow the steps on how to start a restaurant in New York.
