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As the United States’ Latino population continues to increase, they’re leaving a mark on everyone’s food preferences. Specifically, tortillas are increasingly becoming a staple in many American households. Tortillas were poised to become the most popular bread in the U.S. back in 2003, and today the tortilla industry today is a $4 billion industry that continues to grow.
Tortilleria businesses produce all of these tortillas that people are eating. Most businesses specialize in either corn or flour tortillas, although a few have branched out into non-traditional specialty tortillas. (The information below focuses on corn and flour tortillerias, as these businesses are the most common.)
Who is this business right for?
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 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.
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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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 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 steps to start a tortilleria business?
Once you're ready to start your tortilleria business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. A few important topics to consider are:
- What are the initial costs?
- Who is your target market?
- How long it will take you to break even?
- 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.
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 security guard company is sued. 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.
STEP 4. Open a business bank account
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 5. Set up business accounting
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.
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.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I 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.
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 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.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
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.
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.
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.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
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.
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
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.
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.
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.