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  28 Oct 2020

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5 Critical Licenses And Permits Needed To Start A Restaurant

5 Critical Licenses And Permits Needed To Start A Restaurant

Just like other forms of business organisation, setting up a new and profiting restaurant industry remains a daunting task, and one of the reasons is because it is highly regulated. New restaurant owners are faced with many hurdles which include complying with many regional, states and federal rules and regulations for siting a new eatery.

Therefore, to ensure that you hit the ground running with your new restaurant, there are a few licenses and permits you need to operate fully and functionally. But before we walk you through these licenses, we will tell you about what restaurant management systems are, their types, and their significance to effectively managing your new eatery. 

What is Restaurant Management System?

A restaurant management system is a critical tool designed for newly-established food service industries like restaurants, bars, food trucks, etc. These systems allow for the restaurant and its needs to be seen at a glance, and also keep the organisation running by keeping tracks on all back-end needs, which includes employees, sales, and inventory. 

In other words, these comprehensive tools are designed to effectively and profitably manage and operate different aspects of a restaurant by running in synchronisation with each other. More so, a typical restaurant management system usually includes software and hardware, which includes barcode scanners, receipt printers, and cash registers, depending on how the restaurant is structured. 

Types of Restaurant Management Systems 


Restaurants are structured differently, thus having separate, unique needs. Due to the difference in the mode of operation of restaurants, it is advisable to choose wisely the features that best suit your restaurant or bar. Below are the three basic types of RMS to pick from when establishing a restaurant.

1. POS

This Point-of-Sale [POS] system remains the core of a restaurant management system, and it gives room for integrating with it some other third party systems to properly and effectively manage the back-end needs like inventory, staff, accounting, and many more.

2. End-to-end 

End-to-end is the most advanced and robust type of restaurant management systems. This type boasts a plethora of features that includes inventory control, core POS, CRM, staff, payment management, technical support, and report and analytics. More interestingly, this end-to-end type affords the effective integration of other third-party features for other purposes. 

3. Apple or Android only

Some restaurant management systems are designed to operate on specific devices like Apple products and other devices that run on Android OS. This peculiarity is not for other purposes than to preserve the integrity of the system. Therefore, restaurant owners should decide on which Operating System [OS] to run before deciding which system to settle with.

Benefits of Restaurant management systems 


Restaurant management systems hand the restaurant manager or owner a plethora of benefits which include cutting costs, maximising profits, reducing mismanagement, and providing an exceptional much-needed customer experience. Just from a single user-friendly hub, all aspects of the restaurant can be managed effectively. These systems provide the following benefits:

1. Improved Customer Experience

It is no news that customers are a critical factor to always consider in any form of business, because, without them, there can be nothing like 'profit maximisation,' which is key to a successful business. Customers in a catenated world so value convenience, therefore, making this restaurant management system available to them to easily navigate through for booking reservations, making inquiries, lodging complaints, and many more will ultimately boost the industry's reputation and revenue. 

More so, most of these systems have been designed to save essential details like birthday, dates for memorial events, etc., and with just a reminder, the customer can make preparations for their event.

2. Efficient Management 

Again, managing a restaurant can be a daunting task if the proper measures are not employed. One of the measures to employ for effective management is making use of a restaurant management system. A restaurant embodies much staff with different tasks, and they are to be managed daily to know how well the industry is faring. 

Going to each sector of the organisation to see how well these employees are working can be an excruciating one, but from the user-friendly hub, all sectors can be managed effectively.  

3. Cost Saving

Restaurant management systems help managers and owners to cut down on the number of employees to have run the industry, which might, in turn, means spending unnecessary money. With the right system, you will be able to prioritise the number of labour or employees that would be needed for a specific task at a given time. Therefore, this system is also serving as an employee-scheduling system, and ultimately reducing the cost of running the business industry. 

4. Better Communication 

Communication is a vital factor that is considered by both the employees and the customers. A considerable number of employees would like to be part of a business organisation that puts a high value on open communication. Hence, a restaurant management system to be employed must have a feature that facilitates and encourages healthy communication between employees. 

5. Brand Advocacy 

Brand advocacy is one of the strategies that can be employed by business organisations to bolster their customer base and ultimately realise more revenue. The restaurant management system may also feature a referral system which will encourage current customers to put a word out on your organisation's behalf, therefore bringing more customers. More so, brand advocacy relieves you of the burden of having to rely on the traditional form of advertising, which may also be time-consuming, tiring, and expensive. 

What are the licenses needed to start a restaurant? 


Restaurant licenses and permits are one of the things to put into consideration when setting up a new restaurant. With the right permits, you will be able to thrust your dream unique hospitality company into the world, and when these permits are missing, you should be ready to battle a big problem from the top officials. 

Below is a handy checklist that will walk you through the needed licenses and permits that will be needed to get your new restaurant operations running without coming to an abrupt end someday.

1. Business License 

A business license is issued to new restaurants by the city or state you wish to set up your new restaurant, and this permit will enable you to operate in the geographical jurisdiction. This business license is so essential that without it, you may as well not be granted the authorisation to operate at all. This government-issued license entails filling out some paperwork, attesting your signature as the owner of the new restaurant, registering your business name, and paying an application fee, which so depends on the location of your restaurant. 

2. Liquor License 

Often than not, restaurants see the sales of liquor, which the restaurant owner will need a government-issued permit for before these liquor can be served at the establishment. More so, like the business license, liquor license varies in rule and fees from state to state. 

Liquor license is highly challenging to obtain and easy to lose, even with the slightest violation of the stipulated rules and regulations of the state governments. Many restaurant owners have seen their license revoked for selling to minors, using untrained service workers, breaching conducts, selling liquors at the unauthorised times, and many more. 

Therefore, due to the difficulty there in obtaining these pieces of paper, it is advisable to abide by the rules and regulations so as not to lose the license, because a day without the permit would bid you a significant loss from not being able to sell.

3. Employer Identification Number [EIN]

An EIN is another necessary permit that tells the federal government of your status in the state. This number is only issued once in a day, and can only be obtained by visiting the IRS website to fill out a form or apply via mail.

4. Certificate of Occupancy [C of O]

Certificate of occupancy is a crucial permit that a new restaurant owner must obtain from the government officials to show that the establishment is safe for both the staff and customers before they can open their doors to the public. Before the eventual issuance of the license, there is an inspection of the building intended for the new restaurant by the local authorities. 

5. Food Service License

Just like the liquor license that must be obtained before a single liquor can be served in the new establishment, food service license is also a must before food can be served to the public. After making an application online with the name of your restaurant and location, an inspection of your established is done by the health department officials to ensure that the food preparation, storage, and food safety regulations are met before they can agree to issue this permit. 

More so, in some cases where they are not satisfied with what they see, they might mandate the restaurant owner to undergo food safety regulations and law training programs before eventually issuing the license. The food-service license fee hinges on the location, size, and classification of the restaurant.


Running a new restaurant is a challenging yet exciting adventure, and with the right license and permits, and, of course, the right restaurant management systems, you will get off to a flying start. Therefore, we implore you to get the needed paperwork to enjoy all the adventures.

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