How to Start a Small Diner

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Photo by Christina Hamlett

Whether it's located on a busy street corner in New York, nestled in the heart of small town, or standing by itself just off a dusty interstate, American diners have a longstanding reputation of not only providing a good cup of coffee and stick-to-your-ribs food but also a chance to catch up on local gossip. If you like the social aspects of running a no-frills eatery as much as you enjoy putting your recipes to good use, here's what you need to know to get started on a diner of your own.

Decide whether you want to start your diner from scratch or take over the operation of an existing one. While the latter may be a less expensive investment, it could be money down the drain if you don't get an honest answer as to why the current owner is selling. Retiring and moving to Boca is one thing; folding up because of mold issues, faulty wiring/plumbing, roach infestations and unsavory (or dwindling) clientele are quite another.

Figure out what kind of meals you want to serve and what your hours of operation will be. For example, you may decide that you only want to be open for breakfast between 5 and 10 a.m. to accommodate morning commuters. If your diner is going to be located near the theater district, your motif might be to serve evening desserts and coffee after the performances. If you're planning to be open 24/7, you'll not only need to take into account a much broader menu but also hire staff to work the different shifts.

Identify your target customers. Examples: truckers, college students, business people, families on a budget, senior citizens. If you're taking over an existing diner, observe the kinds of individuals it caters to. If you're building your establishment from the ground up, find a location that is easily accessible by the clientele you want to bring in.

Draft a business plan that addresses your current finances, estimates how much additional money you'll need to put your plan of diner ownership into action, projects where you expect to be in terms of profits in the next 3-5 years, identifies how many staff you'll need, salaries and benefits, construction/purchase/lease of the building, utilities, purchase/lease/maintenance of equipment, license and insurance requirements (including workers' comp), renovation needs, food costs and menu pricing, and advertising expenditures. If you've never done a business plan before, the website of the Small Business Administration (Resources) will walk you through the necessary steps to get a license, acquire city/county permits (including permits from the health department), apply for a federal tax ID number, and register your diner's new name with the Secretary of State's Office.

Enroll in management, accounting and public relations courses at your local university. Workshops for new business owners are also offered through community adult education classes and online. You may want to take advantage of neighborhood cooking classes as well, even if it's your plan to hire a full-time cook. (You never know when an emergency may require you to roll up your sleeves and cook a Denver omelet.)

Shop around for a business bank that will specifically serve your needs and provide the best interest rates. The more thorough your business plan for the diner's long-term success in the neighborhood, the greater likelihood of securing a business loan. If you are assuming ownership of an existing diner, you'll want to be able to point to its longevity and popularity as well as demonstrate how you plan to make it an even better attraction for hungry patrons.

Make the acquaintance of a good lawyer, a good accountant and a good insurance broker if you don't already know them. Their expertise can keep you from getting into trouble when you start signing the paperwork that will make your diner official.

Notify your county health department of your intentions to open a diner. Before you can open your door for business, you have to know - and agree to abide by - what the regulations, guidelines and government codes are for preparing, serving and selling food, keeping your diner floors, cooking surfaces, counters, chairs, tables, equipment, storage units and bathrooms clean and sanitary, and ensuring that the employees you hire to cook the food and serve it to customers practice good hygiene. The health department will also want to know what kind of food you're going to be serving, what types of cookware you will be cooking it in, what type of refrigeration system you have, whether there is good ventilation, and even the angles and elevations of your sinks and drainboards in order to avoid dangerous spills on the floor.

Request a permit from the county health department. At the time of application, you'll need to provide them with a detailed accounting of the major and minor appliances you'll be using, a floorplan (including emergency exits, ramps for handicapped patrons, and the location of fire extinguishers), and a list of the foods and beverages you'll have on your menu.

Schedule an inspection by the health department. This is a mandatory step before you can be granted a permit and allowed to open. Further, you'll be expected to accommodate drop-in inspections by county health officials throughout your ownership of the diner. The importance of these visits needs to be strongly emphasized to your employees so that safety, cleanliness, and smart work habits become ingrained in their day to day duties.

Join local organizations such as your city's Chamber of Commerce and national organizations like the National Restaurant Association. These will provide you with plentiful networking opportunities, access to articles related to today's food service industry, and allow you to ask questions of professionals if/when you run into challenges.

Design a professional website that lets people know about the diner's history, what's on the menu, what the prices are, hours of operation, and how to get there. Duplicate these items in postcards or trifold brochures that can be dropped off at the businesses and shops in close proximity to your diner. Online print shops such as Vista Print make it easy and affordable to upload text and original designs (i.e., a color photo of the diner). They also provide a mail-out service to selected zip codes.

Put an announcement in the local newspapers and invite the media to do an interview with you. Throw an open house on the first day to show off your new diner. Do co-op coupon books with local businesses that entitle users to free desserts or a 2-for-1 counter lunch.


  • When planning your diner's location, factor in the method by which people will get there. If they're walking, for instance, it should be easily visible from the street as opposed to tucked out of sight down a dark alley. If parking on the street is problematic, the diner should either have its own parking lot or be situated no more than a few blocks from a bus or train stop. If your diner is out in the middle of nowhere and will only be accessible to people driving cars or trucks, you'll need to invest in road signs or a billboard so that they'll know how to find you.


  • Unless it's a family-run business, turnover at diners and cafes is extremely high. This is largely the result of cooks and servers who don't feel appreciated by their employers. Always treat your staff with respect, solicit their suggestions, and remember to say thank you every day for a job well done. Make sure that the type of flooring you install in your diner isn't one that lends itself to tripping and sliding, nor one that's going to turn into a breeding ground for mold.