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Start a healthy fast food restaurant by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your healthy fast food restaurant. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a healthy fast food restaurant?
The restaurant itself must be built or leased. Food prep stations, cookware, dishes, silverware, dishwashers, napkins, trays, refrigerators, ovens, cash registers and ingredients are necessary. The business requires insurance, utilities, employees, advertising and possibly a drive-thru lane. Plan on spending tens of thousands of dollars for all of the equipment listed above. Building a fast food restaurant will cost hundreds of thousands of dollars. Alternatively, you can lease/rent a space on a monthly basis.
What are the ongoing expenses for a healthy fast food restaurant?
The facility's mortgage/rent payment will likely run between $500 and several thousand dollars per month. Budget in upwards of $500 per month for insurance. However, if your healthy fast food restaurant sells strictly raw food, there won't be a need for ovens. As a result, you will enjoy a considerable insurance break as the odds of a fire are dramatically reduced. Utilities will run a couple hundred dollars per month. Budget several thousand dollars per month for ingredients. Facility maintenance will run at least a couple hundred dollars per month. Budget $500 to $1,000 or more for monthly marketing. Cashiers, cooks, and food prep workers will earn $8 to $12 per hour. If you do not want to handle marketing and accounting duties, budget an annual salary of $30,000 to $50,000 for these professionals. Plan on paying a maintenance expert $15 to $25 per hour.
Who is the target market?
The target market is individuals who are health-conscious yet do not have the time or skill necessary to make delicious food at home. These individuals tend to be busy full-time workers who are looking for a quick meal after leaving work, heading home from the gym and so on. These individuals tend to be young, well-educated and savvy about the nuances of health and nutrition. Shape your menu so it appeals to this demographic and you will enjoy a steady stream of customers.
How does a healthy fast food restaurant make money?
This business makes money by selling high-quality, delicious and nutritious food and beverages to customers.
How much can you charge customers?
In general, healthy fast food restaurant meals typically cost between $5 and $15.
How much profit can a healthy fast food restaurant make?
It is possible to make millions of dollars. Build a successful initial restaurant, reinvest the proceeds in additional restaurants and you will have quite the profitable business. In general, aim to make $50,000 to $100,000 per year at each of your locations. Strive to increase this per-restaurant profit year-by-year and you will gradually build a business empire that rakes in millions of dollars.
How can you make your business more profitable?
One of the best ways to enhance profitability is to brand your products and sell them on the web or at local stores. As an example, consider Taco Bell's popular hot sauce products. These hot sauces are available at Taco Bell restaurants as well as WalMarts and other stores throughout the country.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your healthy fast food restaurant is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
Federal Business Licensing Requirements
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a healthy fast food business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A healthy fast food restaurant is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a healthy fast food restaurant.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your healthy fast food restaurant will be in compliance and able to obtain a CO.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a healthy fast food restaurant
There is no foolproof means of marketing a healthy fast food restaurant business. Market the business across an array of mediums to reach as many locals as possible. Advertise on social media, through pay-per-click advertising, on local radio, in local newspapers, on billboards and elsewhere. The key is to make the public aware that a healthy fast food restaurant is open for business in their community. Most people are willing to give healthy fast food a try. However, people can't patronize a business they do not know exists in the first place. Invest in a robust and widespread initial marketing push across numerous channels to heighten awareness of your establishment and word will gradually spread about your healthy offerings.
How to keep customers coming back
Young people are particularly drawn to healthy fast food. Market your establishment through flyers, billboards and other ads near local schools and universities to attract the young demographic. Locate your restaurant in a part of town frequented by young adults so they do not have to go out of their way to enjoy your delicious food. In terms of customer retention, strive for the perfect combination of food quality and price. Tasty food that is reasonably priced and served quickly will inspire return visits.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Healthy Fast Food Restaurant In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
If you are looking for a way to improve the eating habits and consequently, the health of those in your community, start a healthy fast food restaurant. This is your chance to alter the way people eat, reduce sickness, combat cancer and generally improve the human condition. A healthy fast food restaurant is also ideal for those who have culinary skills, an interest in human health and a passion for delicious but nutritious food.
What happens during a typical day at a healthy fast food restaurant?
Customers place orders, wait a brief period of time for their food to be made and served and enjoy a satisfying meal. Healthy fast food restaurant employees take customer orders, prepare food, cook food, serve customers and clean the facility. Managers delegate work to cashiers, cooks, the maintenance crew, and custodians. Marketing professionals and accountants handle the advertising and financial aspects of the business. The owner oversees each of these employee groups, researches possible additions to the menu, changes recipes, modifies prices, and establishes/manages relationships with suppliers.
What are some skills and experiences that will help you build a successful healthy fast food restaurant?
An individual who has experience in the fast food industry or as a traditional restaurant owner, manager, chef or server will make a fairly seamless transition to owning and operating a healthy fast food business. The entrepreneur should have a sincere passion for healthy food, providing his community with nutritious meals and filling customer orders without delay. It will also help if the entrepreneur is interested in organic food and vegetarian/vegan fare. Most important is an understanding of basic business principles. Nutritious food that is fresh and delicious tends to cost a significant amount of money. Furthermore, such food usually takes a considerable amount of time to prepare. High costs and extensive preparation/cooking time are direct threats to the profitability of healthy fast food restaurants. In order to turn a consistent profit, this business requires a delicate balancing of costs, customer service and diverse offerings.
What is the growth potential for a healthy fast food restaurant?
This is the best time to start a healthy fast food restaurant business. People are looking for healthy alternatives to traditional fast food offerings. If your employees can make and serve tasty food in little time, your business will thrive. If your business is especially successful, you can expand operations across the country or even the world. The growth potential is truly limitless.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a healthy fast food restaurant?
Though all of the offerings should be healthy, taste should not be sacrificed. When in doubt, err on the side of delicious rather than uber-healthy. Do not restrict your menu to organic, vegetarian, or vegan fare. The menu should have diverse offerings that appeal to a wide variety of customers. Furthermore, you should not hesitate to alter the menu based on the ingredients that are in season. Serve fresh, high-quality food that satisfies cravings without sacrificing health and customers will return. More importantly, they will spread the word about your healthy fast food restaurant to friends, family, co-workers and others. Do not lose sight of the fact that those who patronize your restaurant are looking for prompt service. Invest heavily in food preparation efforts so the cooking and serving times are as short as possible.
How and when to build a team
Build a team right away. Your healthy fast food restaurant requires cashiers, cooks, food prep workers, a maintenance expert, cleaners, and a manager. You can probably handle the marketing and accounting duties at first. However, professionals for these specialties will be necessary as the business expands.