How to Start a Tortilleria Business

Start a tortilleria business by following these 10 steps:

1. Plan your Tortilleria Business
2. Form your Tortilleria Business into a Legal Entity
3. Register your Tortilleria Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Tortilleria Business
6. Get the Necessary Permits & Licenses for your Tortilleria Business
7. Get Tortilleria Business Insurance
8. Define your Tortilleria Business Brand
9. Create your Tortilleria Business Website
10. Set up your Business Phone System

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.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

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

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

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.

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.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your tortilleria business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

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.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

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.

Food Regulations

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.

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.

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.

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.