How to Start a Taqueria Business

Start a taqueria business by following these 10 steps:

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

We have put together this simple guide to starting your taqueria 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 Taqueria 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 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
• Payroll
• 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.

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 taqueria 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.

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?

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.