If you have a passion for Mexican food, you might want to open a taqueria. This business is wholly scalable, meaning you can expand your restaurant as your customer base grows. Depending on the business model, the startup costs can be relatively low, making this a good option for hopeful restaurateurs on a budget.

Choose Which Type of Taqueria to Open

Not all taquerias are the same. This specific type of restaurant has a few different business models, so before you get started, you need to choose which of the types of taquerias you want to open. Each has its own pros and cons, so you need to weigh it out. Most likely you’ll choose from:

  • A full-service, sit down restaurant
  • A small taco shop
  • A taco stand

A full-service restaurant takes a lot more capital because you need a larger space and a wait staff, but you can opt to recoup any startup costs by having higher priced, higher quality items and alcohol sales. Alcohol sales are a huge moneymaker, but taco stands and takeout-focused taco shops don’t typically have liquor licenses.

A small taco shop, with a takeout-focused business, is the middle ground between a taco stand and a full-service restaurant. You’ll likely want to have a couple of tables or bar stools where people can sit and eat, but the majority of your customers will be taking their food to go. For this reason, you can operate in a smaller (read: cheaper) location and save money on wait staff by having all orders happen at the register. You can start here and expand later if money is tight.

A taco stand is the most cost-effective model, and you can get started for as little as $8,000. Stands also have the option of trying out different locations, though getting the permits can be a bit of a headache.

Weigh the Option of a Food Truck

A food truck isn’t exactly a traditional taqueria, but food trucks have been rising in popularity over the last decade. This trendy option is often seen as more legitimate than a tiny taco stand, but it’s more flexible than a hole-in-the-wall taco shop. Plus, the startup costs are relatively low at $50,000 to $200,000. You'll have to check with local laws to see if this is a viable option, however, as some municipalities have heavy restrictions on food trucks.

Choose A Location

Taquerias open all the time, but they don’t always stay open. Location is a huge factor when you’re determining success. In truth, a small taqueria or taco stand will fare best in a place with heavy foot traffic. For a full-service restaurant, you can probably get away with being slightly away from the hustle and bustle of a city center if you manage to rack up some great Yelp reviews.

You also want to consider the competition. It probably wouldn’t be wise to open a taqueria right across the street from another taqueria. Though it’s less likely, even fast-food chains like Dos Toros, Qdoba or Chipotle might cut into your sales depending on your business model. For the best chance at success, search for a place with moderate to heavy foot traffic in an area that has few Mexican options.

Write a Business Plan and Get Funding

The restaurant industry is wildly competitive, so it’s important to have a solid business plan. Outline your overhead, your income streams, your targeted consumer base and marketing plan, then use this business plan to approach potential investors or a bank for a business loan (unless, of course, you already have the capital saved in the bank).

Starting a taqueria is expensive. The median cost to open a full-service restaurant (if you’re leasing the building) is $275,000 or $3,046 a seat. If you plan to own the building, the costs soar to a median of $425,000 or $3,734 per seat.

To open a taqueria, you’re going to need some permits and licenses. First, you’ll want to get a business permit from your local municipality. This also requires you to register your business structure with the IRS (most likely, you’ll opt for an LLC) and get the required insurance (general liability, worker’s compensation if you have employees, etc.). You can view the U.S. Small Business Administration’s website for city-specific rules.

Next, you’re going to have to get a food service license. This means your restaurant must be inspected by the health department. You can view the specific requirements on the U.S. Food and Drug Administration’s website. Your staff will also have to complete a simple food safety certification to get Food Handler’s permits if they’re handling food in any way.

Buy Your Equipment

The equipment for a taqueria varies. You’ll need refrigeration units, freezers, shelves, ovens, commercial fryers, grills, a prep table, a commercial dishwasher, an ice machine, utility carts, weight scales, display cases, tables and chairs, among other things. If you’re running a taco stand, you’ll need to purchase the actual stand itself.

Refine Your Menu

Taquerias open all the time, but the mark of a good taqueria is a great menu. Take some time to refine your menu options. Look around at your competition and figure out how you can offer something that’s either different or better. It’s important to foster a great relationship with food distributors so you can get the best ingredients at the lowest possible cost.

Market Your Taqueria

The last step comes after you’ve hired your staff, refined your menu and set up your restaurant to perfection: You need to market your taqueria. Enact a solid digital marketing campaign. Register for Yelp and Google. Entice customers with loyalty programs or grand opening specials.