How to Open a Restaurant in Maryland

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Maryland’s breathtaking beauty and sub-tropical climate echo the warmth and ambiance of the restaurant you want to open and your partners agree. Armed with a clear vision and the confidence bred of many years food service experience, you’re a certain you can carve a niche. Making the dream to open a restaurant a reality requires passion and persistence; the planning, licensing, inspections and permitting can take a year or more to complete.

Plan your menu and write out your recipes. Decide how the kitchen needs to be set up, what type of china and glassware you will use. Include incidentals specific to your restaurant such as tablecloths, paper or cloth napkins, bread baskets or fondue forks. List the edible supplies required to prepare the menu as well as non-edibles, including cleaners, uniforms and menus. Determine how many preparers, servers and support staff are required to present your menu in the manner you envision. Using the menu you can calculate your startup and daily operating cost.

Extrapolate the annual operating costs from the daily costs, divide the startup costs by five and add the results to determine your first-year operating costs. Choose the media outlets you will employ to reach your market; add the costs of promotions, specials and giveaways to project your advertising costs. Determine how much profit do you need. Add that, your operating and marketing costs, plus 20 percents to cover emergencies. This is your total first year budget; use the total to calculate how much food you must sell and at what price to succeed.

Compile your business plan beginning with short biographies of yourself and team, highlighting your passion and experience. Write about your concept in depth; your goal is to bring the ambiance to life and make the reader taste the food with your words. Identify the market you intend to reach and explain your strategy for reaching them. Discuss why you chose to open your restaurant in Maryland; put emphasis on the ways you will enhance the community. Think beyond exquisite cuisine and atmosphere; stress the jobs you bring to the community and your plans for civic involvement. Attach your budget and detail how you will reach your financial goals to complete your business plan.

Contact the Baltimore district office of the Small Business Administration to investigate financing options for small businesses. Eighty percent or new restaurants fail within five years of opening; the odds are no better in Maryland and the primary reason is the same: inadequate funding. You need startup costs as well as operating costs for a minimum of one year. If you don’t have the necessary financing, the SBA administers low-cost federal loans for fledgling entrepreneurs, assists in finding investors, and securing signature loans and company lines of credit

Finalize your structure by registering your business. Sole proprietors and general partners are required to adhere to the municipal code where the restaurant will be located and comply with Maryland’s tax laws. Limited partnerships and all corporate structures must register with the Maryland Department of Assessments and Taxation.

Research Maryland and municipal food service, zoning and health requirements previous to shopping for a location. Just because a building housed a restaurant before does not guarantee it meets current standards; examine the property carefully to help ensure you won’t be faced with major renovations resultant from code violations.

Schedule health and fire safety inspections with the municipality and obtain the required tax permits and insurance. You need unemployment, worker’s compensation and business insurance and must apply to the Internal Revenue Service to obtain an Employer Identification Number and tax ID. The Maryland Department of Assessments and Taxation provides a comprehensive checklist and links to local licensing and taxation agencies on their website (See Resources).

Prepare for your health and safety inspections by putting the finishing touches on your restaurant. The inspectors will expect to find the utilities on, all equipment in good working order and edibles and inedibles stored properly. You are ready to open your restaurant as soon as Maryland and the municipality issue your licenses and permits.