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 taqueria business. 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 taqueria business?
Taqueria business owners report start-up costs of between $8,000 and $21,000. Geographical location and the specifics of your business model will impact your upfront costs. Consider the following needs when determining your budget:
- Location - Some taco stands are mobile, while others operate out of a permanent structure. Your taco stand should be in a visible, high-traffic location with ample parking. Food truck owners pay a fee to the land owner, while permanent locations will need to pay rent and a deposit.
- Buildout, furnishing, and equipment - Save on upfront costs by finding a location that is designed for this type of business.
- Permits and insurance
- Food ingredients and restaurant essentials
- Point of sale (POS) system
- Signage and marketing materials - Save money and support your local community by hiring an artist to paint your sign and design your logo, etc.
What are the ongoing expenses for a taqueria business?
Part of the appeal of running this type of business is the low overhead costs. With a carefully chosen establishment, rent and utilities should be a fraction of the cost of running a larger restaurant. Payroll expenses, insurance, and maintaining your stock will represent the greatest part of your budget.
Who is the target market?
Patrons that frequent this type of establishment are looking for a quick and casual meal at affordable prices. When building your menu, consider the area and what niche is currently lacking. If your goal is to serve authentic Mexican cuisine, yet the area is saturated, concentrate on a different niche, such as fusion or Tex-Mex.
How does a taqueria business make money?
A taqueria business generates revenue from the sale of each food item. Most taquerias focus on tacos, with a variety of ingredient options available for a small fee. Low overhead costs offer the potential for higher profits.
How much can you charge customers?
Your prices should be directly tied to food costs. As a rule, set your prices between 30% and 35% of the menu items’ food costs. Most taquerias have set menu items, with the option to add additional items for a nominal fee.
How much profit can a taqueria business make?
Unlike the vast majority of businesses, many taco stand business owners report a profit in the first year, with between $112,000 – $156,000 by the third year.
How can you make your business more profitable?
As mentioned, offering add-ons will help drive the prices up. Experienced owners also encourage offering double portions as part of your upsell strategy. If you have the space, hiring a local band as entertainment can help increase your customer base. Additionally, speak with your local patrons and determine if there is a market for offering a delivery service.
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 taqueria business 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.
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 taqueria business
In today’s business landscape, it is critical that every business maintain social media accounts. This is an effective way to keep your business’ name fresh in your customers’ minds and update them on new developments. Ads in local publications with a coupon will get people in the door and keep them coming back. Many business’ have found success donating to a local nonprofit or sponsoring a community team.
For your grand opening, invite food bloggers, local press, and influential members of the community. Use your soft opening as a dry run, working out any kinks that might arise
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
To ensure repeat customers, deliver quality food and customer service consistently. Interact with your patrons and ask for feedback. This will help strengthen your brand, communicating to guests that you value their business.
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 Taqueria Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
A taqueria is an affordable business venture for the food lover who is passionate about sharing their Mexican food creations with others. While many start out looking at this as a stepping stone to owning a larger restaurant, most ultimately find greater fulfillment and success sticking to this profitable business model.
What happens during a typical day at a taqueria business?
Whether it’s taking orders, answering questions, and interacting with customers, customer service will be the focal point of your day. Re-stocking ingredients, maintaining accurate records and finances, and marketing the business will also be a part of your daily activities.
What are some skills and experiences that will help you build a successful taqueria business?
As a restaurant owner, you must have a diverse set of skills. Since customer service plays a large role in your success, it is critical that you possess strong interpersonal and communication skills. Whether you plan to be involved in the kitchen or leave that to your staff, a culinary background would prove beneficial. To maximize profits, you’ll need to maintain detailed, accurate records. Therefore, strong business and leadership skills are also essential. Those who do not have a hospitality background are encouraged to gain real-world experience.
What is the growth potential for a taqueria business?
The food truck phenomenon has changed the business model for many entrepreneurs looking to open a restaurant. Consumers are attracted to the idea of supporting a small, local business and enjoy the relaxed setting. Due to higher profit margins, many taqueria business owners have been able to invest their money back into the business, opening multiple locations throughout the city.
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.
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 taqueria business?
In this type of business, the overhead costs are low. Taqueria owners are able to pass these savings on to the customer through lower prices, without eating into their profits. Keep it simple by offering canned/bottled drinks. Focus your energy on ensuring you serve high-quality, fresh food, with recipes that are simple yet palatable. Before opening your doors, know your recipes. This will not only help ensure consistency and shape your budget, it will impact your brand and how you market. Your taqueria’s location will have a direct impact on your hours of operation. Be flexible with your hours until you have determined peak days and times.
How and when to build a team
Operating a taqueria business requires detailed planning and a strong staff. During the planning stages, hire key employees. Leave ample time to train front and back-of-house personnel and ensure your team is knowledgeable about your menu and food preparation. Your kitchen staff should have cooking experience and your front-of-house employees should have prior restaurant or customer service experience.