How do first time business owners find out all the things they need to do before they can open their doors?

July 14, 2012 2:21 PM

A hypothetical business like a pizza place (but it could be something else) wants to open up shop. How do the hypothetical first time business owners find out all the things they should or need to do before they can open their doors? Things like....

1. Where to buy fixtures like countertops, refrigerators, tables and chairs, etc. Do they do the design themselves -- do they pick the design for the store from a catalog of sorts or have a series of consultations?

2. How to program their POS system and what POS system to use (let's say for example they want to use a touch screen with 3 terminals) -- does a pizza place usually have someone on staff who is technically inclined to get all that up and running or keep it running? Do they hire and keep on contract someone to maintain the POS systems in case they break down? How do they know who to hire? How much does that cost (ballpark)?

3. What the local regulations (business certificates, health code inspections, hours of operation limitations, other strange city-specific regulations that require inspectors or specially installed items) are for opening such a store to avoid gotchas. Do you just find these out by word of mouth? Does inspector A point out things that you need to do with inspector B and C and maybe D? Are most small businesses operating with a fear in the back of their mind that a government administrator hasn't noticed some arcane and unimportant detail regarding their operation that could shut them down?

How do people figure this stuff out? Word of mouth? Trial and error? A series of failures until one stumbles upon success? I'd imagine a place like NYC would be more lax with regulations than say, a business in the suburbs, but I really have no idea.

posted by Feel the beat of the rhythm of the night to work & money (18 answers total)

Most big cities are far tougher than smaller communities! You hire a kitchen designer, who often has connections with companies that sell or lease you the equipment. And you pour over the various codes that regulate your business--many places have this information on-line. You can lease a POS system.
posted by Ideefixe at 2:35 PM on July 14, 2012

1. I think this is why most restaurants (especially extremely casual ones like a pizza place) tend to open up in spaces that were previously used as restaurants. A lot of that stuff will already be in place. Otherwise -- and for items that wouldn't come built in -- you go to a restaurant supply store, which will either have a selection of items in stock, or will be able to refer you to how people in your area typically do things.

2. It wouldn't be surprise me if restaurant supply stores also either sold POS systems or connected restaurant owners with the companies that do.

3. New York City holds workshops for prospective new business owners. They especially target people who maybe used to have a normal job but due to layoffs are now thinking about opening their own business. (I've been on unemployment and often get mail inviting me to these events). There are tons of programs to shepherd people through the process. I'm not sure if smaller cities and towns have anything like this, but there are definitely public-facing government offices that offer these services.

I would imagine, too, that this sort of thing runs in families and is somewhat word-of-mouth based. If you're opening a pizzeria, and your dad and uncles and cousins all own pizzerias already, they'll probably get you set up with the red tape that needs to happen.

On top of all that, it wouldn't surprise me if one needed to show that the relevant paperwork was in order when applying for business loans.

Also, from time to time, things like this slip through the cracks, usually because of innovation. For example, a few years ago a bunch of people who'd been hand-crafting food products on a casual/hobby sort of level all went in together to do a monthly "food festival" selling their wares. Sort of like a greenmarket or a craft market, but all artisanal food products. As the festival became more popular, they were featured in the New York Times. The city noticed this, and they were pretty quickly shut down for not having all the proper paperwork, health codes complied with, etc. Luckily the city recognized that they were doing something new and might not have known what the proper channels were, so they weren't fined or anything, and I believe people came forward to help the business owners go legit. A few years later, many/most of those vendors are fully legitimate businesses. So the story has a happy ending.
posted by Sara C. at 2:37 PM on July 14, 2012

NYCs regulations for restaurants are pretty onerous. I don't know why you'd think otherwise.

Look up restaurant supply companies. There are a number in the Bronx.
posted by dfriedman at 2:39 PM on July 14, 2012

Look for a local small business development organization (typically funded by state, fed, and grant dollars), SCORE chapter (retired executives, former business owners, etc who offer their time/assistance), and/or see if local university business schools offer technical assistance to business owners.

Good luck!
posted by she's not there at 2:47 PM on July 14, 2012

A hypothetical business like a pizza place (but it could be something else) wants to open up shop. How do the hypothetical first time business owners find out all the things they should or need to do before they can open their doors? Things like....

They don't. They just know since they learned the business by working for somebody with a pizza shop first. It is advisable and cheaper to learn all these things and make all the mistakes while being on somebody's payroll.
posted by yoyo_nyc at 2:54 PM on July 14, 2012 [6 favorites]

You could also ask people who work in the same business -- but not ones in your neighborhood, against whom you'd be competing -- if you could buy them a drink. I don't know about the restaurant business, but in show business, everyone will give you one drink.

I have a sense that the pizza business in New York has a heavy mob presence, as do many other businesses (waste disposal, I'm looking at you) and you'd need to know all about that before you started spending money.
posted by musofire at 2:59 PM on July 14, 2012

People most definitely find out the answers to these questions. They do NOT "just know". For some of it, they have to pay for professional advice - but a lot of it, they can figure out on their own.

If they need professional advice, then they hire:
#1. architects, designers, and construction contractors to build the location.
#2. electricians or communications techs that specialize in installing data systems like a POS. (The person selling the system will know an installer.)
#3. lawyers and accountants can handle all your set up issues in terms of licenses and permits.

Obviously, however, they want to limit the amount of professional services they pay for - as such things are expensive. So, anything they can do yourself, they do. They can paint the place themselves, so they do not need a painter.

But, I guarantee they will need to pay for at least some professional services. They will need a licensed electrician - because they should not be messing with the electrical panel or the ansul fire suppression system.

If you are figuring it out yourself, for #1:
You start looking on-line for pizzeria design plans. And you familiarize yourself with pizzeria restaurant suppliers. But, you also look for available real estate spaces, and try to make your system fit an existing space - because right now it is cheaper to re-model than build new.

For #2:
Maybe you can find a rental space that already has a POS. I think for this, you will have to get some professional service help. But, I would try to program the system myself. If I had a system like that, I would want to know how it works.

For #3:
You start talking to the state licensing agency, the local building department. For this, I think you will also need some professional services - talking to a lawyer and accountant when setting up a new corporation is a smart thing to do. But, I would try to go through the licensing process by myself, rather than paying a lawyer to tell me what I need to do. I am sure that there are health department classes and licenses that you need to operate a restaurant.

Basically, you try your best to figure out as much as you can on your own - and the more you can do yourself, the better. But also, you pay for professional services - to look over what you have done, and to handle the most complex items.
posted by Flood at 3:33 PM on July 14, 2012

I used to work for an architecture firm where not only did we work on some restaurants, but the owner of the firm also ran a little cafe down the street from our office. I've also worked for a couple independent pizza shops. People probably do things differently with varying degrees of success, but as far as your questions go, this is what seemed to happen:

1) there are a number of restaurant supply stores that will sell just about anything, as well as catalog services that will sell you EVERYTHING from soup to nuts - furniture, serving ware, plumbing equipment, NSF approved fixtures, etc. Unfortunately, I don't recall the catalog name that I used to select stuff that we put into restaurants, but it was something like this.

2) No idea. The shops I worked in, everything was already set up when I started, and I was more of a prep cook/delivery guy than counter person. The POS guys may set it up for you.

3) You'll probably want to hire somebody to do this for you unless you have extensive prior experience. Depending on what you need to do, you can look at designers or architects that specialize in restaurant or kitchen design, and they'll basically have a whole bunch of stuff figured out already before you even call them, as well as a wealth of experience with the local permitting authorities.

The authorities you'll probably need to deal with will be the health and building departments, although you'll probably have to deal with a bunch of different arms and divisions within the building department itself. Health will be concerned about food safety; building will be concerned about building and fire/life safety and handicap accessibilty. You will most likely have to submit plan drawings to each in order to open a restaurant. In my experience, the larger the city, the more hardcore and anal the inspectors are. Most building and health departments, especially for larger cities, have guides to walk you through the process and templates of a sort that show or list everything you'll need to tell the authorities about your space in order for them to approve it. San Diego County's Health Department has a bunch of stuff listed here, and the City of San Diego has their development process detailed (exhaustively) here.
posted by LionIndex at 4:05 PM on July 14, 2012

Also, believe it or not, there are pizzeria trade publications. One copy I saw laying out at a place I worked at had an ad for fake dough that you could have someone throw around to impress customers, even if you rolled yours out or used pre-made stuff.
posted by LionIndex at 4:17 PM on July 14, 2012 [1 favorite]

SCORE.
posted by valkyryn at 4:41 PM on July 14, 2012

"Entrepreneur Magazine" has start-up manuals for many types of business. Search Amazon for that phrase alone and with the type of business, in "Books". The books and manuals are also available on that magazine's website, bookstore.entrepreneur.com, but it could be easier to find the ones you want, and Kindle versions, searching in Amazon.
posted by caclwmr4 at 5:25 PM on July 14, 2012

There's the old joke - how do make a small fortune in the restaurant business? Start with a large fortune.. If the people doing this don't already have several years experience working in and hopefully running a small pizzeria, then I hope they at least have very very deep pockets. Restaurants have a very high failure rate, and can be quite expensive to open and run.

As to your questions:

1. For the kitchen equipment, you go to a restaurant supply store, and buy what you need. When it comes to things like your standard pizza oven, mixer, prep tables, coolers, etc, these things are all generally the same across the board. Maybe you might need a 6 foot long prep table instead of a 4 foot long one, but a prep table is a prep table. Make sure all your equipment is NSF certified. Here in Atlanta there are several places that sell used restaurant equipment, your town may have something similar. If you have a Sam's Club nearby, you may be able to find restaurant equipment there also.

As for the dining room furniture and fixtures, it all depends on what you're willing to spend. You can buy cheap booth and table sets at the restaurant supply store, or have completely custom made furniture, or anything in between. How deep are your pockets?

2. There are quite a few POS vendors out there. It seems every place I ever worked in had a different one. Look online or in the phone book, call a few of the vendors, and see what they have to offer. Or ask the servers at some of the restaurants you frequent what kind of POS system they use, and if they like it. Generally, the vendor sets up the equipment and offers support for it, and will probably work with you to get it programmed for your menu items.

3. I'd start with calling the health department where you live, and asking them what you need to do. If you're doing any kind of remodel or build-out, you'll need to have licensed contractors do the work. There are often companies whose only business is doing this type of work for food service establishments, see if you can find one in your town. If not, look to see what service trucks are parked outside of some of the local restaurants, and call those companies.

You'll have to have a business license, a health permit, a liquor license, and maybe a few others depending on your locality. Each employee may need to have a health permit, and all your servers may need to have permits to serve alcohol.

As to how people learn all this stuff? Generally, they spend time working in the industry to learn the ropes and how things operate. Not to be all doom and gloom about it, but if the people doing this don't already have some experience in the business, they are in for some hard and expensive lessons. If you came to me with a fist full of money and said you wanted to open a restaurant but had no experience, I'd tell you to put that money in the bank and get a job in a restaurant for at least two years, and then see if it's something you really wanted to do. If you still wanted to open a restaurant, then you'd at least know the answers to all the questions you just asked above.
posted by ralan at 5:28 PM on July 14, 2012 [3 favorites]

Most people starting their own business have been in that business for decades, working for other people.

The restaurant business in particular is fraught with failure. For Christ's sake Gordon Ramsey had to close a restaurant!

Business is hard enough as it is, you absolutely cannot start one if you don't already know the answers to the questions you are asking.
posted by Ruthless Bunny at 6:37 PM on July 14, 2012 [1 favorite]

It turns out there trade magazines for stuff like pizza joints. I don't know how much they would help a new person starting up shop, but perhaps a bit.
posted by sebastienbailard at 1:36 AM on July 15, 2012

Thanks for all your responses. My business example (pizza joint) was merely hypothetical, but I'd imagine the same issues come up when starting a corner bodega, a small clothing shop, or any other kind of brick and mortar business -- though not serving food probably makes things a lot easier in terms of health code regulations.
posted by Feel the beat of the rhythm of the night at 6:29 AM on July 15, 2012

When McDonald's brings in new franchisees, they are required to start their ownership experience by buying an established restaurant. New locations are only started up by experienced franchisees, or by corporate staff who are experienced at starting new restaurants.

Opening a new business is almost a completely different skill from running a business.

But yeah, trade magazines and organizations. Call the city's business permit office and ask what needs to be done. My limited experience with those sorts of official offices is that they are usually way more helpful than you'd think.
posted by gjc at 7:28 AM on July 15, 2012

though not serving food probably makes things a lot easier in terms of health code regulations.

I don't knwo about that - there is a license for everything. Uncle Scam will figure out a way to make every small business pay for a license. A bodega needs a license to sell cigarettes and beer - two of their best sellers.
posted by Flood at 1:21 PM on July 15, 2012

I opened a bike shop last month in my very small tourist city (north shore, MA). I had to do the following:

1. lease a space. it was an empty former salon, tiny space (420 sq ft). super relaxed landlord, month to month lease. all we had to do was paint and throw in fixtures, and get internet and phone run into the space.

2. paperwork: since we already ran our business out of our home since the previous year, we'd already done the legwork: filed as an LLC ($500), registered for our sales and use tax with the state. Liability insurance that covers rentals ($700/year). No business license necessary if you are registered as a corporation or LLC.

3. That was it!

We use my old netbook running linux, an old flatscreen monitor, and OpenBravo POS which is meant to be touchscreen but we use a mouse. I use GnuCash for accounting. We went to a used store fixtures place and saved a ton of money (and installed everything ourselves), but ordered a new cash register stand and glass case for a checkout area. Fixtures for our tiny shop were $1k.

Food regulations can be super onerous. Husband did pizza for years in the preparation for maybe opening our own place, but in the end we're glad we didn't do that.
posted by kpht at 4:09 PM on July 15, 2012 [2 favorites]