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 step guide to starting your sushi 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 sushi restaurant?
The start-up costs can vary depending on whether you are leasing or purchasing land. If you are leasing land, a median assumption of cost for starting your restaurant is $280,000. The largest parts of this are $140,000 to construct a building, $75,000 for kitchen and bar equipment, and $20,000 for the technology to process orders and payments. It may cost $20,000 or more to provide the relevant furniture you need. Other assorted costs include about $10,000 for your initial food and drink supply and about $12,000 on relevant insurance, licenses, and permits. The first month of utilities will be about $3,000.
What are the ongoing expenses for a sushi restaurant?
Your exact ongoing expenses will vary based on factors such as restaurant location, size, and amount of staff. For instance, you may be paying a $10,000 a month lease, $2,500 a month in utilities, $8,000 a month in food and beverages, and $10,000 a month for the salary of a small staff.
Who is the target market?
It's a bit obvious, but your best customers will be those who love sushi. These are the customers who will best appreciate the diversity of your menu and the care with which you create the sushi. Additionally, these customers will typically be your best word-of-mouth advertisement.
How does a sushi restaurant make money?
A sushi restaurant makes money by charging customers for the act of preparing and serving sushi. Your restaurant may also make money by selling other dishes and/or selling alcohol.
How much can you charge customers?
While the exact prices may vary, a normal roll of sushi costs an average of $6.50, whereas specialty rolls are an average of $12.60. If your restaurant charges alcohol, those prices will vary based on alcohol type, alcohol amount, and alcohol brand.
How much profit can a sushi restaurant make?
The average profit of a restaurant is a little over $82,000. With that being said, your own profit may be much greater if you offer unique dishes and experiences that your community cannot find anywhere else.
How can you make your business more profitable?
Don't be afraid to enhance your menu with more dishes, seasonal variations, and signature foods to bring in more customers. Try to throw special parties throughout the year that correspond to national and community events. Finally, try to enhance the services you offer: being willing to offer the sushi equivalent of “curbside to go” for call-in orders will help you get many more customers.
What will you name your business?
Choosing the right name is very important. 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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your sushi restaurant is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
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.
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 sushi restaurant 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 sushi business is generally run out of a restaurant. 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 sushi restaurant business.
- 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 sushi restaurant business 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
Businesses involved in the sale of alcoholic beverages are required to obtain a liquor license from the appropriate state or local agency. A comprehensive list of laws by state (including necessary licenses, zoning laws, etc), curated by the Alcohol and Tobacco Tax and Trade Bureau, is included here.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
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 sushi restaurant
Be sure to market your business on social media. Outlets like Facebook make it easy for customers to find information and contact you, while outlets such as Instagram allow you to post pictures that emphasize how beautiful your sushi is. It's also good to establish a professional website that can house your menu, directions to the restaurant, and other vital information. Within your budget, try to advertise via radio and newspaper when you open, and be sure to throw a special grand opening event.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Consider implementing some form of customer loyalty program. This makes customers feel valued and keeps them coming back. Try to get local ingredients when you can and advertise this fact: it makes your business seem more connected to the community. Finally, consider using online apps such as Open Table to allow customers to make reservations online. This saves time and is particularly attractive to Millennial customers.
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 Sushi Restaurant In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Obviously, this business is perfect for those who love sushi. It is also a good fit for anyone who has had restaurant management experience or other related restaurant experience that may help you in serving customers and otherwise running the shop.
What happens during a typical day at a sushi restaurant?
Despite its focus on sushi, the daily activities of this business are similar to those of any restaurant. Any given day is spent receiving and preparing food and drinks, coordinating employees, serving customers, and then cleaning the restaurant at the end of the night. You may use downtime you have to manage money and to advertise your business, especially on social media.
What are some skills and experiences that will help you build a successful sushi restaurant?
Like any restaurant, a sushi business is built on its workers. It will help build your business if you are able to recruit managers, servers, and chefs that have experience in the service and sushi industries. Your own previous successes as a manager can help your restaurant succeed quickly, and a knowledge of Japan and Japanese culture can help you make your restaurant feel more “authentic” for your customers.
What is the growth potential for a sushi restaurant?
The growth potential for this business is modest. As an industry, the sushi restaurant revenue grew only 1.2% between 2010 and 2014. However, American consumption of sushi grew 28% in that time, showing an increased public appetite for your restaurant's speciality.
TRUiC's YouTube Channel
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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.
What are some insider tips for jump starting a sushi restaurant?
Try to hire the best chef your budget can handle; in many ways, the sushi chef is the face and reputation of your restaurant. Try to locate your business in an accessible area that makes it easy for customers to get in and out; sushi is a popular lunch dish, so you want to make it easy for people to eat at your restaurant on their lunch break. Finally, scout out other sushi restaurants in the area, both to figure out things you should try to emulate and to figure out how to make your business stand out.
How and when to build a team
Unlike some businesses, a restaurant will require you to build a full team of hosts, wait staff, chefs, and managers immediately.