How to Open a Food Business in Alabama

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how to start a food businessAlabama is a great place to open up a food business. Some of the most popular restaurants offer wholesome home-style cooking or specialize in breakfast food. There are several steps you need to take in order to open up a food business in Alabama. The state of Alabama is a great place to open up a restaurant because of the low taxes and no minimum wage law in the state. Inventory is usually tax exempt and sales tax is about 4% in most areas within the state.

Decide which type of business you would like to start. There are several different types of food businesses in Alabama and as the business owner you will have the ability to decide which type of business to start. You can start a sole-proprietorship, corporation, limited partnership, S corporation, general partnership, non-profit corporation or a limited liability company. Alabama also has several franchise opportunities available. If you want to start a family owned food business your best bet is to probably start a sole-proprietorship. If you are not sure what type of food business to start you can take free business classes at your local Alabama Small Business Administration.

Contact the Alabama Development Office for your free packet of information. This information will help guide you as to where you need to go when applying for licenses and permits in Alabama as well as offering good information for opening up a food business in that area. You can write them at Alabama Development Office 401 Adams Avenue P.O. Box 304106 Montgomery, AL 36130-4106. Or call them directly at (334) 242-0400.

Go to your local health department to obtain a health department permit. In the state of Alabama entrepreneurs are required to carry a permit in their restaurants to prove that they know how to practice safe food handling. You will need to take a test in order to show that you know how to prepare and handle food safely.

Choose a name for your business. Make sure to choose a good name that no one else in the area has. You may want to do a search online just to find out if anyone else has the name you would like to use.

Apply for a business license. Go down to your local government office to apply for a business license and make sure you take your food permit with you. In the state of Alabama people who want to open up a food business are required to have a permit from the health department first before they will be granted a business license. Before you can open your doors you must have a business license according to State law in Alabama.

Apply for a business account. You will need to have a separate business checking account to manage all of the business transactions. You will need to show that you have a business license in order to qualify of a business checking so be sure to bring that with you. While your at the bank applying for this account you should also consider applying for a merchant account so that you can take Visa and MasterCard at your restaurant.

Develop a good business plan. A business plan is very important for people wanting to open their own restaurant in Alabama. Create your own business plan or hire a writer to write one for you using the data you have collected. You will need a good business plan in order for your company to succeed. After you have your business plan you will be able to determine if you need funding for your business.

Apply for a loan. Go to your local bank in Alabama and apply for a business loan if you find that you need funding. You will need to show the bank that your credit worthy and they will also need to see your business plan. If they feel your business will succeed and if your credit is approved you will be approved for a business loan to help jump start your business.

Find a good location. Location is very important when it comes to running a successful food business especially in Alabama. You want to choose a location that people can find easily and if at all possible you want to choose a location in a high traffic area such a busy street, near a mall or near other successful yet competing restaurants. Once you find the building you want you will need to lease it or buy it using money from a business loan, grant or capital out of your own pocket.

Hire your employees a month in advance before you open your restaurant. In order to start up a food business smoothly in Alabama you will need to hire your employees in advance especially the management team. Training and preparation should go on for at least a month before you open the doors to the public. You want to make a good first impression so that customers will continue to eat at your restaurant. In Alabama there are certain rules that are required after you have been in business for more than a year and if you have one or more employees. After this time period you are then required to pay unemployment insurance. You will need to file a Form SR-2 with the IRS after your restaurant is established. Employees are required to pay taxes right away and you will also be required to pay taxes on your business profits to both the state and the federal government.

Open your restaurant. Once you have all your ducks in a row you will be ready to open for business. Good luck!

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