In every business, there are necessary food licenses and requirements that you need to comply with. You might be asking yourself, “What kind of business license do I need for a café?” The truth is, the type of licenses that you need to run a café are not different from other types of restaurants.
A café may be a small restaurant, but you will need the patience to complete licensing to start despite being small and informal. So, once you nailed down the idea of a café business, then you must know the licenses needed to open a cafe. In this article, you will know what kind of business licenses you need to comply with for a café.
Why are Business Licenses Necessary for a Café?
One of the mandatory requirements for any business, trades, and organization is a license. These are designed to protect the customers or consumers from unethical behavior, poor workmanship, and possible illegal or dangerous practices.
So, before you ask yourself about “What kind of business license do I need for a café?”, also know the reasons why business licenses are mandatory.
- Licenses verify that your café business is a legally registered entity.
- It determines that certain levels of skills and qualification sets have been achieved.
- It helps your café to adhere to regulations in running a business.
- Lastly, to ensure that premises have been reviewed and deemed safe legally for the public.
Business Licenses you need for a Café
Knowing the necessary licenses and permits is very important for a café business. This is to minimize future risks and to prevent being surprised about the deal-breakers later. “What kind of business license do I need for a café?” – here are the basic permits and licenses for a café business.
A business license is required to operate and open any business in the US, including coffee shops or café. Depending on the business entity, you must register your business with the state to legitimize your business.
Even if it’s an online business, you will still need a license to operate. You may also be required to pay a percentage of the entire sales and a flat annual fee. Except for those restaurants that sell alcohol, you may only obtain a business license for the state.
Employer Identification Number
When mulling over the question on “what kind of business license do I need for a café”, you need to think of your identification number as the owner. Like a business license, you must also have an employee identification number to operate a café in the US. It identifies your business and to know if it’s in a legal structure currently.
You also need to apply with the IRS to obtain this, as they assign this. It’s just a tax ID number, and you can apply through mail, phone, fax, or IRS website, so it’s going to be easy. You must prepare this for a while, as the IRS only issues 1 EIN a day, but on the brighter side, obtaining EIN is free.
Resale License for Charging Sales Tax
There are states in the US that require a business to charge their customers with sales tax. When you open a café in the states with sales tax, you must inform the state about having a resale permit or license.
Normally, you’re not going to pay fees for the permit or licenses. However, instead of getting a renewal every year, your café permit must be kept, and the license must be active through filing the required tax returns and submitting sales taxes to the state from the collections you got from customers.
Furthermore, failure to submit tax returns on time gives the authority to revoke the resale license of your café.
Building Permit or Certificate of Occupancy
The goal of the build-out process is to obtain a building permit from the city’s building department. This is about dealing with the city or state to seek approval from the fire and health department. It involves working with professionals like engineers, architects, and contractors.
This works when the city inspects the build-out. It may also be based on the amount of work, and the city may also require demolition, zoning, asbestos, and approval. You must contact your city when you have a location, right before signing a lease. Getting a building permit is to see if the permit is a viable option.
Some of the matters that the state can’t control are other liability licenses. This is required by the state or landlords, such as insurance like the General Business Liability, worker’s compensation, and property insurance.
This also involves the Authorized Guarantee Agreement that if you’re unable to make rent, you can be kicked out even if your business is at its lowest moment. You can be responsible for obligations and even paying double penalties.
Food Service License
Licenses for food are generally issued by the state or county health department. They will make an in-person visit to your café to ensure that you are following restaurant food safety protocols and regulations.
When your café business has obtained this license, the county’s health department will continue to visit your establishment and inspect your restaurant. That’s why you are encouraged to remain consistent with the safety regulations in running a café.
Your sign is a vital part of putting up your brand. It is a part of your marketing plan when running a café. So, before you put any signs and draw attention to your café, you must have a sign permit from the government.
If you rent or lease, it could also be a good idea to get approval from the landlord. It is in addition to your official sign permit.
Employee Health Permit
Not only does your building need a permit, but also the crew or employees handling the food and beverages you serve in your café. Your employees should have the training and a complete food handler’s course for health and safety protections.
In this time of the pandemic, employees should learn about the proper sanitation and safety in food handling. This is to prevent the spreading of foodborne diseases.
Putting up a business truly requires patience and a lot of preparation to operate smoothly. At first, you would be asking yourself, “What kind of business license do I need for a café?” But once you know and comply with all of it, then you’re good to start with your business.
Hopefully, the business licenses mentioned in this article have helped you in starting your café business. That way, once you complied with all of it, you would be focusing more on the food to serve, and the rest will follow.