Permits and Licenses Needed to Start a Coffee Shop

Coffee Shop Permits and Licenses Needed for a Coffee Shop

Permits and Licenses Needed for a Coffee Shop

Permits and Licenses to Start a Coffee Business

 Getting the proper permits and licenses to start a coffee shop is critical for opening a successful coffee business.

Ultimately, determining which licenses and permits you will need for your coffee business primarily depends on your coffee shop concept, your coffee shop menu, and your location.

Of course, if you are starting to plan your business, you still might be figuring out your coffee shop concept, menu, and location. That's all okay. Once you know these elements, you'll be able to do some thorough research to obtain your permits and licenses.

For some, the challenge of getting permits and licenses may actually sway you in which direction to take your business forward. For example, in some parts of the country, getting a license to serve alcohol can be expensive and cumbersome. This may alter your decision to seek more funding, change locations, or scrap the idea of serving alcohol altogether.

In this post, we'll cover some of the primary permits and licenses you will need to consider before opening your coffee shop.

Start Your Coffee Shop

Permits and Licenses Needed to Start a Coffee Shop

Regardless of your coffee shop concept, there are a few general requirements that all coffee businesses need to meet. It doesn't matter if you have a mobile coffee trailer, a coffee drive-thru stand, or a regular brick-and-mortar cafe. You need to have the basic paperwork to make your business “official” and ready to do business.

Your Coffee Shop Business Structure

Establishing your coffee shop as a legal business entity should be done in your state – or the state you plan on doing business in. You'll have several major business structure options as a coffee shop owner. They vary from setting up a non-profit corporation, corporation to a limited liability company (LLC), among others.

Setting up your business structure in the U.S. allows you to move forward with some essential parts of your business, including obtaining your Employer Identification Number (EIN), opening a business bank account, and setting up your business for tax collection, among other essential business functions.

Other actions, such as taking out a loan or getting additional funding, may require you to have a legal business structure established.

For more information on your coffee shop business structure, read our post, The Benefits of Starting a Coffee Shop LLC

Your Coffee Shop Business License

After establishing your coffee business structure, you will want to obtain your state and local business license. This business permits that you need to do business in a specific jurisdiction can dramatically impact your tax obligations.

Additionally, you may be required to have several business licenses, including one issued from your state and the cities you operate in. For example, if you establish a coffee business in Washington State and operate in the cities of Seattle, Bellevue, Bellingham, Port Angeles, and Kent, you'll also need a business license in each of those cities. Keep in mind that business licenses need to be renewed annually.

Coffee Shop Reseller's License

Depending on your location and the laws of your state, you may also likely need a reseller's license issued by your state or city. A reseller's license allows you to purchase inventory items that you will turn around and sell to your customers. In some jurisdictions, a business license may not equal a reseller's license and, therefore may need to be added to your business license registration.

So, for example, with a reseller's license, if you purchase your flavored syrups and hot chocolate at a restaurant supply store, you may be eligible to avoid paying sales tax – as long as the inventory items are only used for your business.

You will want to check with your local jurisdiction on the specific tax advantages and other benefits and privileges that come with having a reseller's license.

Requirements to Start a Coffee Shop

There are a variety of requirements needed to start a coffee shop, from setting up your business structure to passing your health department inspection. Your specific requirements depend on your type of coffee shop and your location. For example, a mobile coffee truck may pass one jurisdiction but not the other.  We strongly recommend that you review your legal and administrative requirements before setting up your business.

We've detailed the requirements for opening a coffee shop in our post, Requirements to Start a Coffee Shop.

Permits and Licenses Needed to Start a Coffee Shop

Coffee Shop Health Permit

Your health department inspection and approval are critical to opening your coffee shop. Your health department approval and issuance of a health department depends on a variety of factors that include:

• The coffee shop menu
• Concept or business type
• Physical location

The health department's primary goal is to ensure the safety of your customers and employees from food-borne illnesses. Therefore, a complex menu or menu high in meats, dairy, and fruits and vegetables will likely have a higher level of scrutiny than an espresso-only business.

The health department knows the various business concepts available – from a drive-thru coffee stand, coffee cart, or mobile coffee trailer. The health department will be looking for specific things that must be addressed for these coffee shop concepts.

For example, if you have a coffee truck, you may need a three-compartment sink. This isn't generally possible with a coffee cart or small kiosk. Yet, the issue of water, sanitation, and gray water will need to be addressed to satisfy the health department's regulations.

Therefore, my recommendation is that you develop your menu, decide on your concept, and decide which regulations you need to meet.

Coffee Shop Buildings Permit

Your building's department will likely play a role in whichever concept you decide to pursue. For example, whether you open a drive-thru coffee stand or a mobile coffee trailer, the building's department will most likely need to inspect your facility or mobile unit.

Depending on your menu, the health department may require specific equipment, such as a fire suppression unit, a three-compartment sink, a grease trap, and particular requirements for employee safety. Your buildings department would ensure that those items required by your health department are installed correctly and that the plumbing and electrical work adheres to your local codes.

Your health department permit and your building permit go hand in hand. The health department's approval may depend on passing your building's inspection.

Coffee Shop Occupancy Permit

You may be required to get an occupancy permit. This permit approval may be done by the building's department in conjunction with the fire department. Your occupancy permit details how many people are allowed in your business at one time. Exceeding the occupancy would be dangerous for your guests. This occupancy level would depend on several factors, including the type of business you have, available exits and doorways, what type of building your coffee shop is in, and what floor you are on, among other factors.

Fire Department Permits for Coffee Shops

Your coffee business may need a food vending permit issued by the health department if you heat your food with propane. The fire department may need to sign off to check on how your heating equipment is installed and whether there is appropriate fire protection for you and your customers.

State Alcohol License for Your Coffee Business

If you plan to serve alcohol at your coffee shop, you will likely need a state-issued license. However, an alcohol license (beer and wine or spirits) may be challenging to obtain, depending on the state and city. In addition, some jurisdictions have only a set number of licenses issued, creating a secondary market for your alcohol licenses.

Approval on a license may also be contingent on a more extensive menu. For example, if you serve food, you will have an easier time getting a license to serve alcohol. This may require you to expand your current menu, add equipment, and have more space.

What Permits and Licenses Are Needed to Start a Coffee Shop?

Coffee Shop Startups

Permits and Licenses to Start a Coffee Shop

Food Handler's Card

A food handler's card is typically issued by your local county health department. Obtaining a food handler's card is often done by taking an online course that walks you through the primary steps for properly handling food. In addition, many health departments throughout the U.S. will require all of your employees who handle food and beverages to have a food handler card.

Ongoing Health Department Visits

To keep your permits and licenses updated and in good standing, you should expect ongoing visits and requirements from your health departments.

Additionally, if you make any changes to your menu, layout, and space, you may need to get prior approval for these changes.

Further Reading: How to Start a Coffee Shop Business Successfully

Permits and Licenses to Start a Coffee Shop

Action Steps to Start Your Coffee Shop

Without obtaining your coffee shop's necessary permits and licenses, you won't be able to open your coffee shop. Therefore, it's essential to look ahead and see what types of permitting requirements are in your future.

Here are a few general action steps to get your coffee shop business planning started:

Determine Your Concept

You want to determine what type of coffee business you want to start. Whether you begin a drive-thru coffee shop, a cat café, or mobile coffee business, you'll want to get the concept down.

If there are similar businesses in other areas of town or your state (or even across the country), it may be worth researching and exploring each coffee shop concept. For more details, read our post, 50 Great Coffee Shop Concepts.

Choose a Name for Your Coffee Shop

Choosing the name of your coffee business brings your idea to life. With your coffee shop branding in mind, consider a name that will resonate with your target market. Your name will be an integral part of your logo, theme, and overall branding. Consider reading our post, Advice on Naming Your Coffee Shop.

Focus on Your Coffee Shop Menu

Along with the regulations and statutes of your local community, your menu will be the clear determinate of what type of licenses and permits you will need.

Therefore, invest in the time and research to create a workable menu that will appeal to your customers and deliver the type of profit you need.

Write Your Coffee Shop Business Plan

Writing a coffee shop business plan will help you organize all of your thoughts and ideas into one cohesive document that you will be able to use. A business plan is helpful for your own personal planning, but it is also a tool that will help you raise the investment money you need to bring in.

A big part of your business plan constitutes your budget and financing. Breaking down how much money your coffee shop will cost and how you will turn that invested money into a profitable business will be essential.

Your Coffee Business Funding Mix

Once your business takes shape and you've determined your budget, you will want to focus on your coffee shop funding mix. Your coffee shop funding mix is the pool of various financial resources you will be able to draw from to secure the funds to start your business.

We've detailed how to develop your funding mix in our post, Your Coffee Shop Funding Mix.

Permits & Licenses Needed for Coffee Shop

Conclusion:

Getting the proper paperwork before you open will save you considerable time, money, and headaches. Do the proper research. See which licenses and permits your business type requires – and take the necessary steps to achieve those permits.

 Permits and Licenses Needed to Start a Coffee Shop

 Related Questions:

How much does it take to start a coffee shop?

The ultimate cost of your coffee shop budget depends on the concept, menu, and location. For example, a coffee shop in Los Angeles or New York City will likely be more expensive than a coffee shop in Detroit or Milwaukee. Additionally, a complete menu offering will necessitate a large kitchen, equipment, and staff.

We've detailed the cost of starting a coffee shop in our post, How Much Does a Coffee Shop Cost?

How much do coffee shop owners make?

Coffee shops can be very profitable. However, your profit will depend on managing your fixed and variable costs. These costs can significantly cut your profit margins. Ultimately, your coffee shop's revenue will depend on your daily sales volume and your average receipt price.

To explore how much your coffee shop can make – and how much you can make as a coffee shop owner, read our post, How Much Does a Coffee Shop Owner Make?

Are You Ready To Get Started?

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Based in Seattle, Washington, USA, Coffee Shop Startups is dedicated to providing you with the most relevant information on how to start a coffee shop business successfully. Over the last 11 years, we've helped thousands of aspiring coffee business owners worldwide. We harness the experience, wisdom, and knowledge of many successful coffee shop owners to help you increase your chances of success and profits. We support business owners who want to start a coffee business by providing them with valuable information on starting their coffee business successfully.