Opening a restaurant is a dream for many, but it comes with a significant amount of planning and legal requirements, especially in Canada.
Whether you want to start a small café, a fine dining restaurant, or a food truck, this guide will walk you through the most important steps to make your dream a reality.
Restaurant Startup Checklist Canada: 10 Key Steps Before Opening
Before your grand opening, follow this restaurant startup checklist in Canada:
- Secure necessary licenses and permits.
- Finalize your menu and pricing strategy.
- Set up your bookkeeping system.
- Ensure compliance with health and safety regulations.
- Confirm staffing and training.
Or you can skip the formalities and leave them to the pros. Hire Bestax today for company registration in Canada. We will simplify the whole process for you so you can easily focus on running your business.
Is Opening a Restaurant Profitable in Canada? Key Benefits Explained
Canada’s restaurant industry is blooming with each passing day. There is a huge demand for eateries; therefore, the market is ever-growing.
Here are some reasons to start a restaurant in Canada:
1. Restaurant Market Growth
Canada’s foodservice industry is projected to grow by nearly $120 billion in 2024, marking a 4.9% increase from 2023. This growth reflects a steady demand for dining experiences across the country.
2. Diverse Population
With a multicultural population, Canadians have a diverse culinary palate. This creates opportunities for a wide range of restaurant concepts, from ethnic cuisines to fusion dishes.
3. Supportive Entrepreneurial Environment
Canada is home to over 1.1 million small businesses, accounting for 98.1% of all employer businesses.
This shows that Canada promotes new businesses with resources and networks to support them.
4. Government Incentives
There are government programs, such as the Canada Small Business Financing Program, that offer financial assistance to new businesses, making it easier to secure funding for your business.
Start a Restaurant in Canada: Step-by-Step Process
1. Develop a Business Plan
Starting a restaurant in Canada begins with creating a detailed restaurant business plan.
Your business plan should include:
- Restaurant Concept: Consider trends in the food industry and your target audience when defining your concept.
- Market Research: Conduct research on the restaurant market in Canada. Understand your competition and potential customer base.
- Menu Development: Outline your menu, pricing strategy, and how it aligns with your target market.
- Financial Projections: Estimate your startup costs and expected cash flow.
- Marketing and Sales Plan: Plan how to attract customers through advertising, social media, and promotions.
Why a Restaurant Business Plan is Crucial for Success in Canada
A well-structured business plan can help you face the challenges of opening a restaurant and set clear goals. At Bestax, our expert Business setup consultants can also help you come up with a solid business plan according to your needs.
2. Choose a Location
The location of your restaurant or office for starting any business is very important. In Canada, location influences your customer base, operating costs, and overall business success.
When choosing a location, consider:
- Foot Traffic: High-traffic areas, like downtown centers, shopping districts, or near universities, can attract more customers.
- Parking: Ensure that your location offers convenient parking options if it’s dine-in.
- Lease Negotiations: Work with a real estate agent to help you find a commercial lease.
3. Register Your Business
Once you have a business plan and a location, you’ll need to officially register your restaurant business. In Canada, there are a few ways to register your business:
- Incorporation: This involves forming a legal entity (corporation), which has benefits like limited liability and potential tax advantages. You will need to complete a NUANS name search if incorporating federally or in Ontario to ensure your restaurant’s name is unique.
- Sole Proprietorship: If you want to start a small restaurant, registering as a sole proprietor is simpler, but it doesn’t offer the same liability protections.
4. Obtain Permits and Licenses
Depending on your location and the type of restaurant you plan to open, you may need:
- Municipal Business License: A business license issued by your local municipality, such as in Ontario.
- Food Safety Certification: Depending on the province, you may need to comply with provincial food safety regulations. You’ll also need to ensure your restaurant meets the Canadian Food Inspection Agency (CFIA) standards. (Restaurant health and food safety inspections are handled by provincial or municipal public health agencies).
- Liquor License: If you plan to serve alcohol, you will need a liquor license, which in Ontario is issued by the AGCO (Alcohol and Gaming Commission of Ontario).
- Health Permits: Ensure that your restaurant passes local health and safety inspections before opening.
5. Hire Staff
The success of your restaurant depends a lot on the quality of your staff. In staff you may need to include:
- Chefs and Cooks: Skilled chefs and cooks are essential for maintaining the quality of your menu items.
- Servers and Front-of-House Staff: Friendly and attentive servers will help you provide a great experience for your customers.
- Managers: A competent restaurant manager will oversee daily operations and ensure that everything runs efficiently.
Restaurant Employment Rules and Staff Regulations in Canada
In Canada, you need to be aware of employee health and safety regulations, including the Occupational Health and Safety Act.
Also, familiarize yourself with restaurant payroll Canada and restaurant bookkeeping requirements. For payroll management and bookkeeping services, you can contact professional accountants at Bestax.
6. Secure Financing
Starting any business requires a certain amount of capital. Here are some options you can opt for to manage your finances:
- Restaurant Financing Canada: Many banks and financial institutions offer restaurant-specific loans, which are designed to help cover startup costs.
- Canada Small Business Financing Program (CSBFP): The CSBFP is a government-backed loan program that helps small businesses, including restaurants, secure financing.
- Investors: Consider finding investors to help fund your restaurant in exchange for equity or profits.
How to Create a Restaurant Cash Flow Forecast in Canada
Before applying for financing, create a restaurant cash flow forecast that outlines your expected revenue, expenses, and profits. This will show potential lenders or investors that you have a solid plan in place.
7. Plan for Taxes and Finances
Apart from covering your startup costs, you’ll need to keep track of ongoing expenses.
Here’s what you need to know:
- Corporate Tax for Restaurants Canada: Restaurants are subject to corporate taxes. Consult with a tax professional like Bestax to understand your tax obligations.
- Input Tax Credits (ITC): You may be eligible for input tax credits on the GST/HST you paid on business expenses.
Tip Reporting CRA: Ensure that all tips are reported to the CRA for tax purposes.
8. Focus on Menu and Kitchen Design
Your menu pricing plays a big role in your restaurant’s success. To set the right prices, figure out your food cost percentage in Canada and include other expenses like rent and utilities. Then, adjust your prices so you make a profit while staying competitive.
Also, getting your kitchen layout approved is important. It ensures your kitchen is safe, well-organized, and meets all regulations. A good layout makes your kitchen more efficient and helps reduce waste.
9. Marketing and Customer Engagement
Now that you’ve set up your restaurant, it’s time to attract customers. Here is how you can market your new business:
- Online Presence: Create a website and maintain active social media profiles to engage with customers.
- Promotions and Events: Host opening events, offer special discounts, or introduce loyalty programs.
- Franchise vs Independent Restaurant: If you’re unsure whether to open an independent restaurant or a franchise, research the pros and cons of both options before making a decision.
Restaurant Accessibility Requirements in Ontario (AODA Compliance)
In Ontario, the Accessibility for Ontarians with Disabilities Act (AODA) ensures that your restaurant is accessible to individuals with disabilities.
Make sure your restaurant meets accessibility compliance to avoid fines and improve customer satisfaction.
10. Prepare for Opening Day
Once everything is set up, it’s time to prepare for your grand opening. Time to make your dream a reality!
Make sure to:
- Stock up on inventory.
- Train your staff on customer service and operational procedures.
- Ensure that your restaurant meets all restaurant regulations in Canada.
Why Choose Bestax for Company Registration in Canada?
Bestax offers expert services to make this process easier and ensure compliance with all legal requirements.
Here’s why Bestax is a trusted partner:
1. Expert Guidance
Bestax provides professional advice on the best business structure (e.g., sole proprietorship, partnership, corporation) tailored to your restaurant’s needs.
2. Efficient Registration Process
With Bestax, you can complete the registration process smoothly and promptly, allowing you to focus on other aspects of your restaurant’s launch.
3. Comprehensive Services
Beyond registration, Bestax offers a range of services, including accounting, tax planning, and compliance, to support your restaurant’s ongoing operations.
4. Proven Track Record
Bestax has a combined experience of 10+ years in company registrations in Canada and the UAE, providing peace of mind to new entrepreneurs.
Conclusion
Starting a restaurant in Canada offers many opportunities in a growing industry. By following the steps and getting help from experts like Bestax, you can make the process easier and set your restaurant up for success.
Make sure to plan well and follow the rules to build a successful restaurant. Leave the hectic tasks for the pros.
Quick FAQs
What licenses and permits do I need to open a restaurant in Canada?
To open a restaurant in Canada, you need a municipal business license, a food safety certification, a health permit, and a liquor license if you plan to serve alcohol. Additionally, some provinces may have specific permits for food handling and operating requirements.
How much does it cost to start a restaurant in Canada?
The cost to start a restaurant in Canada depends on location, size, and concept, but generally ranges from $150,000 to $500,000 or more.
Do I need a GST/HST number for my restaurant?
Yes, if your restaurant’s annual revenue exceeds $30,000, you are required to register for a GST/HST number with the Canada Revenue Agency (CRA).
What certifications are required for food handlers in Canada/Ontario?
In Ontario, food handlers must complete a recognized food safety training course and obtain a food handler certification. This certification ensures that staff understand safe food handling practices to prevent contamination and foodborne illness.
How do I get a liquor license for my restaurant in Ontario?
To get a liquor license in Ontario, you must apply through the Alcohol and Gaming Commission of Ontario (AGCO).
Can I start a catering business from home in Canada?
Yes, you can start a catering business from home in Canada, but you must comply with local health regulations, obtain necessary permits, and ensure your home kitchen meets food safety standards. It’s important to check with your local municipality for specific requirements.
What is a HACCP plan, and do I need one?
A HACCP (Hazard Analysis Critical Control Point) plan is a food safety management system that identifies and manages risks in food production. If your restaurant prepares or handles food on-site, especially in large volumes, having a HACCP plan may be required by local health authorities.
Can I operate a ghost kitchen instead of a dine-in restaurant?
Yes, you can operate a ghost kitchen in Canada, which is a delivery-only kitchen without a physical dining space. However, you still need to comply with food safety regulations and obtain the necessary licenses, such as health permits and business registration.
What is the break-even point for a restaurant, and how do I calculate it?
The break-even point for a restaurant is the amount of revenue needed to cover all fixed and variable costs. You can calculate it by dividing your fixed costs by the difference between your average price per meal and variable cost per meal.
How do I register my restaurant with CRA for payroll and HST?
To register your restaurant with CRA for payroll and HST, you need to apply for a business number (BN) online or through a CRA representative. This allows you to remit employee deductions and collect HST from customers.
Disclaimer: The information provided in this blog is for general informational purposes only. For professional assistance and advice, please contact experts.
