Start a tortilleria business by following these 10 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 tortilleria business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 much can you charge customers?
- 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 tortilleria business?
The largest upfront expense associated with opening a tortilleria business is acquiring the equipment needed to make tortillas. One Mexican restaurant owner, Pippa Calland, expanded into the tortilla-making business spent $10,000 on equipment.
A commercial tortilla press costs between $1,000 and $10,000-plus. There are cheaper presses that cost as little as $20, but these require pressing tortillas by hand. Hand-pressed tortillas may be appropriate for a restaurant, but they’re too labor intensive for a tortilleria business that produces a much larger volume of tortillas.
A dough mixer and corn grinder (if making corn tortillas) are also needed, although these cost less than a commercial tortilla press. Investing in packaging equipment may make sense as a business grows, but it’s possible to get by hand-packaging tortillas at first.
To save on equipment costs, business owners can look for used equipment. In some areas, used tortilla presses and corn grinders might not be available. Dough mixers and other equipment should be, though, as they’re used by many food service businesses.
In addition to equipment costs, business owners also must pay for a commercial space and ingredients (see ongoing expenses).
What are the ongoing expenses for a tortilleria business?
The primary ongoing expenses for a tortilleria business include lease, utility and salary payments, and the cost of ingredients.
The ingredients used are water, corn masa or flour, baking powder, vegetable shortening or lard, and lime slake. These aren’t expensive, but it’s important to keep costs as low as possible because of tortillas’ low price point.
Who is the target market?
Tortilleria businesses frequently sell to Mexican and Tex-Mex restaurants, local convenience stores and grocery stores, as well as to consumer directly. The market for tortillas is wide open, as they’re a staple of many people’s diets and included in lots of restaurants’ menu offerings.
How does a tortilleria business make money?
A tortilleria business makes money by selling the tortillas it produces. Tortillas may be sold retail or wholesale, usually in packs that have a dozen or more tortillas.
How much can you charge customers?
Tortillas are normally priced inexpensively, with a couple dozen often selling for between $2 and $3 retail. In order to turn a solid profit, tortilleria businesses must sell a high volume of tortillas.
How much profit can a tortilleria business make?
A tortilla business can grow to be a highly profitable business. The key to increasing profits is usually securing one or more large wholesale accounts. Doing this took one tortilla business from grossing $45,000 annually to bringing in almost $10 million each year.
How can you make your business more profitable?
Because tortilla presses are specific to flour or corn, most tortilleria businesses first expand their product offerings by making other food products out of the ingredients they’re already using. For example, corn tortillas can be turned into tostadas or chips, or they can be resized into burrito shells.
Alternatively, some businesses expand by opening a Mexican or Latino restaurant. This involves more capital and risk than offering additional products, though.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Tortilleria Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your tortilleria business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
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 tortilleria 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 tortilleria business is generally run out of a factory or industrial kitchen. 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 tortilleria 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 tortilleria 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
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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How to promote & market a tortilleria business
Fresh tortillas smell delicious, so one of the best ways to market a tortilleria business is by offering free samples of freshly made tortillas. Business owners can take samples to restaurants and grocery stores in order to gain wholesale accounts. To increase direct retail sales, tortillerias can offer samples at farmers markets and festivals.
How to keep customers coming back
A tortilleria business can set itself apart from the competition by using wholesome, local and/or organic ingredients. The quality of the ingredients used should be advertised via the tortillas’ packaging, as this is what people are looking at when they decide which tortillas to purchase.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Tortilleria Business 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?
Anyone who likes Latino food, and especially Mexican food, may enjoy running a tortilleria. Not only do business owners get to make tortillas themselves, but they also meet many other people who like Mexican food through their work.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a tortilleria business?
A typical day at a tortilleria business is full of activity. Business owners:
- make tortillas using machines
- package and deliver tortillas
- clean machines when done making tortillas
- order more ingredients as needed
When not directly engaged in these activities, business owners spend time marketing their tortillas.
What are some skills and experiences that will help you build a successful tortilleria business?
In order to successfully run a tortilleria, business owners must know how to make good tortillas and have a strong business acumen. Business owners that don’t already have a family tortilla recipe should take a class, like those offered by Healdsburg SHED or Sur la Table. Open Culture, Coursera and many other platforms offer online business classes.
What is the growth potential for a tortilleria business?
Most tortilleria businesses remain local businesses that sell tortillas throughout a city or region. For example, Tortilleria Nixtamal sells tortillas throughout New York City, and Tortilleria Pachanga primarily sells through retailers in Maine.
It’s possible for a tortilleria to become a very large business, though. Gruma, which is a Mexico-based tortilla business, sells tortillas worldwide.
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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 tortilleria business?
The equipment and ingredients that a tortilleria business has determine the direction that the business will take.
Regarding equipment, business owners must decide whether they want a tortilla press that’ll make flour or corn tortillas. Commercial presses won’t make both types of tortillas because the grain used is different, and purchasing both is cost-prohibitive for most new tortilleria businesses.
Regarding ingredients, business owners have to determine whether they’ll use preservatives. Many grocery stores will only carry tortillas that have preservatives because the preservatives prolong shelf life and reduce shrinkage. Preservative-free tortillas, however, are tastier and can help give a business a unique place in the local market.
How and when to build a team
Business owners should be prepared to start out running a tortilla business themselves, for hiring employees right away will significantly decrease profits. Once a business is established, employees may be hired.
Depending on a business’ success, the number of employees may grow to be anywhere from a couple to several dozen. Colland has two employees, while fellow tortilleria owners Francisco and Delia Amezquita employe 30 people.