They say there’s no place like home, and you couldn’t agree more. Working from home has many perks, including a reduced commute, fewer coworkers, and the comfort of your environment. As a soon-to-be restaurant owner, is it feasible to open a restaurant from home? How would you even do it?
When opening a restaurant from home, keep the following in mind:
- Make sure you have the space for a home-based business
- Know your local zoning laws and ensure you’re in compliance
- Your restaurant still needs a name, so don’t skip this
- Have the right equipment to cook
- Keep staff small at first
- Promote your restaurant to draw in business
- Get your restaurant registered
- Obtain your licenses as needed
- Check whether you need a public restroom
If you’re seriously considering making your home into a restaurant, then this is the article for you. Ahead, we’ll explain more about each of the points above, sharing actionable tips and info you can use as you proceed with your restaurant venture. You’re not going to want to miss it!
9 Things to Know When Opening a Restaurant in Your Home
You Must Have Adequate Room
First thing’s first, and that’s starting with a plan. Some restaurateurs open a full-fledged establishment right on their premises while others use their home kitchen to bake and cook goods and sell these goodies right out of their home.
Whatever your definition of at an-home restaurant is, you have to ensure you have the space necessary for the job. We’ll talk a little later about sizing your staff, but you have to assume you won’t be the only one in your home working at any given time. Do you have room for a handful of people plus yourself? A dozen people?
Think also that you probably have other people living in your home, such as your family. Your spouse or partner won’t be at work 24/7, nor will your kids be at school that long. When they’re home, are they going to feel like they have to dance around your business? If you have pets, will they be terrified by all the constant hustle and bustle as well as the noise that can come with cooking and baking?
These are all questions you need to answer before you proceed. If you find that your home is too small for your restaurant aspirations, that’s not necessarily the end of the line for you. You could always rent or buy a commercial building and begin your restaurant from there.
You Have to Be in Compliance with Zoning Laws
Another factor that can nix your plans for opening a restaurant or foodservice out of your home is whether your zoning laws will allow it. These laws are made on a local and municipal level and thus vary from town to town and state to state in the United States. If you’re in another country, such as the United Kingdom, you don’t have to worry about zoning laws, per se. Instead, the UK uses planning law.
For the sake of this article, we’ll stick to talking about zoning laws only. You may have been in compliance with your local zoning laws when your home was only a residential place, but now that it’s going to become a commercial business, that no may longer be the case.
If so, then your commercial business–in this case, your restaurant–would not be allowed to operate.
To learn what the zoning laws are in your neck of the woods, search for county or city ordinances online. If the information isn’t on the Internet, then it should be available at the office of your city attorney or municipal clerk as well as your town library.
Don’t try to ignore zoning laws either if you’re not in compliance. You may be hit with civil penalties, and in some instances, your at-home restaurant could be shut down. In other words, it’s simply not worth it.
You Have to Name and Brand Your Restaurant
Operating a restaurant at home needs to be treated with the same dedication and passion that you would give to a restaurant located on a commercial property. That is, you want to set up your establishment for the greatest chances of success, and that begins by branding your restaurant.
What are you going to call yourself? You have countless ways to name your restaurant, really. You could go with a name that holds personal meaning to yourself or your family. You can also take a lighter-hearted approach, incorporating puns or jokes into the restaurant name if it’s appropriate. You could even take advantage of rhymes and alliteration for a name that rolls right off the tongue.
Are you feeling ultra-stumped? You have a few other avenues of exploration. For instance, what’s your favorite movie, television show, album, or book? Perhaps some titles from there can inspire you, or you can even use a reference to your fave media for your restaurant. Naming your restaurant locally, such as with your city/town name or a state quirk is another option.
If all else fails, you can always add symbols or change the spelling of a commonly known word and call your restaurant that. For example, in Rehoboth Beach, Delaware, there’s a restaurant known as a(MUSE), which is a play on “amuse.” In Washington, D.C., you can dine at &pizza.
Don’t wrack your brains for too long trying to come up with the perfect name. If you feel creatively dry, then take a break, do something else, and come back to it. Sometimes a great name pops up in your head when you’re not even trying to think of one!
You Must Have the Right Equipment for the Job
Next comes one of the most crucial and expensive parts of the equation, and that’s getting all the necessary equipment to operate your at-home restaurant.
Here’s what you might expect to pay for all the major equipment:
- Chef’s knives: $60+ for a single set
- Espresso and cappuccino machine: $1,200+ each
- Coffeemaker: $190+ each
- Food processors and mixers: $100 to $200+ each
- Walk-in freezer: $1,800+
- Refrigerator: $1,000+
- Sinks: $275+
- Dishwasher: $700+
- Food warmer: $650+
- Vent hood: $1,000+
- Commercial range: $1,000+
- Commercial oven: $1,000+
Now, depending on whether you’re running a food service out of your home or a smaller restaurant, will you necessarily need every piece of equipment listed above? No. That said, if you must have everything, on the lower end, you’re paying $9,075 for each piece of equipment if you buy only one of each. So you can now see where restaurant equipment can get crazy expensive very quickly.
Don’t be afraid to buy used equipment if it’s in decent enough shape. You can check social media (such as the Facebook Marketplace) or resources like Craigslist and even eBay. Just make sure you’re a smart, savvy shopper so you get equipment that’s still in usable condition.
Also, keep your ear open for buzzing of what’s going on around your town. Unfortunately, restaurants shut down all the time. The owners are often looking to offload their equipment for a fraction of what they paid since they have nowhere to put everything. You might be able to get decently new equipment for a great price.
Smaller Staff Is Better Than Bigger Staff in This Case
As we said we would, let’s get back to discussing your restaurant staff. Unless it’s a tiny food service business, then more than likely, you can’t run your establishment alone. You’ll need waitstaff, chefs, cashiers, and cleanup crew.
The only difference between hiring for a commercial restaurant and hiring for a restaurant based out of your home is you have to be very conscious of how many people you have inside at once. You don’t want staff bumping shoulders with one another because they have too little space. You also would prefer for them not to infringe on your family’s personal life at home, which they have every right to enjoy.
If you have a few restaurant biz workhorses you know who can wear multiple hats, these are the people you want to hire for your at-home establishment. You too may juggle several duties, such as waiting on patrons or washing up dishes at the end of the day.
Try opening your restaurant or home-based foodservice with a handful of staff members, maybe five max, including yourself. If you find that everyone feels too strained after a few weeks or months, then hire a new person or two. Taking this one-at-a-time approach will ensure your at-home restaurant feels comfortable with your current constraints.
If your restaurant eventually outgrows your home, that’s a good thing! You’ll now have to rent or buy a commercial space. At that time, you’re free to hire as many staff as necessary, as you’ll certainly have the space to do so.
You Can’t Pass on Promoting Yourself
Being an at-home business might make you feel a little less-than compared to that snazzy new restaurant a few blocks over that just opened. You can’t let your mindset cripple your success though. Your food venture is every bit as legit as that restaurant, or at least, it will be by the time you’re done reading this article.
You have to treat your restaurant as legit too, and that means promoting yourself. After all, you are at one slight disadvantage compared to a commercial restaurant. People in your neighborhood will drive by, see a restaurant, and know exactly what it is. Whereas with your new establishment, they may not be sure what they’re looking at since it’s a residential property and not a commercial one.
Thus, you may have to work a little harder to get the word out that yes, your restaurant exists, and yep, you’re home-based. Use the localized approach in your promotional materials. As an example, you could mention that by working at home, you can cook or bake each meal with a homemade passion your customers will love. You could also play up the intimate, cozy atmosphere of your establishment since it’s also your home.
After all, many restaurant owners spend hundreds if not thousands of dollars to create a comfortable, home-like ambiance at their commercial buildings. You don’t have to strive for that same atmosphere, as it comes naturally based on your location. Play that up as much as you can.
You want to keep your advertising very local, but feel free to expand to other cities and towns within your state as well. If you start a website and ship out food to customers, you can even begin advertising nationwide.
We recommend advertising options such as paid website and social media ads, newspaper ads, local TV network commercials, radio ads, mailed ads, and even a billboard or two if you can afford it.
You Must Get Your Restaurant Registered
Your audience is now well-informed of your existence, but what about the government? It doesn’t matter if you’re operating out of a commercial or residential building, either way, you need to register your restaurant.
You might do so as a limited liability company or LLC, a corporation, partnership, or sole proprietorship. Here’s what each of those terms means.
- LLC: In the US, an LLC is a limited, private company. The limited aspect refers to your liability, although your LLC may also use the same pass-through taxation as present in a sole proprietorship or a partnership.
- Corporation: A corporation is one entity no matter how many employees are within the company.
- Partnership: With a partnership, your business partner pairs up with you promote and enhance mutual interests. A partnership can include an individual as well as governments, schools, organizations, and businesses.
- Sole proprietorship: As part of a sole proprietorship, your restaurant is run only by you. Your business entity and you are not legally distinct. A sole proprietorship is also called a sole trader at times.
Once you know how you want to register your at-home restaurant, you need to go on the IRS’s website to obtain your employer identification number or EIN. This will come in handy for tax purposes, as it acts as your ID number. Registering does not cost any money in most states, so don’t delay.
If You Need Licenses, Get These Right Away
You registered your business, but you’re not done yet. Besides your EIN, you must also obtain your business license if you want to operate your restaurant anywhere in the US. That license is mandatory, as is your certificate of occupancy for the max number of patrons allowable inside your home business. You’ll also need a food service license through your county or city health department. You can only earn this license if you pass all food safety inspections, so make sure your restaurant is in tip-top shape.
If you want to attract business to your at-home restaurant with signage, you may need a sign permit. Playing music at a restaurant mandates a music license, or else you could get in trouble for copyright infringement.
Optional licenses include a pool table license (fairly self-explanatory), live entertainment license, dumpster placement permit, and a liquor license. The latter is especially important for restaurants. You cannot legally sell any alcohol without a liquor license. Even mixed beverages with only a slight hint of alcohol would be prohibited.
You May Need a Public Restroom Under Some State Guidelines
Phew! You’re just about done setting up your home-based restaurant, but you have one more important hurdle to cross. Depending on your local and/or state laws, you may need a bathroom designated for public use if you have a certain number of customers.
If you’re a smaller restaurant, you shouldn’t have to worry about this. The home bathroom(s) you have should suffice. Once your restaurant grows though, you’d need a separate bathroom that only customers can use.
You may want to set up a bathroom in your home anyway that’s only for customers and then a second bathroom for your family to use. This separates private and public matters quite well.
Opening a restaurant from your home allows for a great comfort factor, as there’s no place comfier than home. You want to make sure you take care of all the legalities before you proceed though, such as checking zoning requirements, getting your business license, registering your restaurant, and passing your food safety inspection.
If running a home-based restaurant has long been a dream of yours, you now have all the keys for success in hand. Best of luck!