How To Open a Restaurant in Canada: 11 Essential Steps

Opening your own restaurant is an exciting journey filled with creativity, passion and the chance to bring people together through great food. While opening a restaurant business takes hard work and planning, the rewards — crafting unforgettable dining experiences, building a loyal customer base and turning your vision into reality — are well worth it. 

Whether you’re a seasoned chef or a first-time entrepreneur, this step-by-step guide on how to open a restaurant will help you navigate the essentials, from concept development to opening night.

1. Define your restaurant concept

Defining your restaurant concept is the foundation of your entire venture: A well-defined concept shapes your brand, menu and customer experience and also ensures consistency in everything from pricing to marketing while helping to set you apart in a competitive industry.

Here’s how to get started: 

1. Select a cuisine type that aligns with your passion and local demand, whether it’s authentic Neapolitan pizza, modern vegan fare or upscale fusion dishes. 
2. Choose a service style, whether that’s fast-casual, fine dining, food truck or family-style, that fits your vision and audience. 
3. Nail your restaurant ambiance, be it rustic and cozy or sleek and modern. Keep in mind your restaurant’s setup and atmosphere should reflect your theme and appeal to your target market, whether that’s young professionals, families or foodies. 
4. Pinpoint what makes your restaurant unique. Maybe it’s a signature dish, a rare cuisine in your area or an immersive dining experience. 
5. Research local gaps in the market, and align your concept with both demand and your culinary strengths. 
6. Make sure your restaurant branding reflects your concept, so that your restaurant name, logo and voice establish a cohesive story that resonates with diners. A clear, compelling concept is one of the key features of starting a restaurant, as it not only guides décor, staffing and operations, but also helps attract the right customers from day one.

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2. Create a business plan for your restaurant

A well-crafted restaurant business plan is your restaurant’s roadmap to success. It will guide your decisions, help you attract investors and secure funding, and allow you to transform your vision into a structured strategy, proving your concept’s viability to lenders and partners.

Here are some key components you might want to include in your restaurant business plan:

• An executive summary to provide a brief overview of your restaurant’s vision, mission and unique selling points while also highlighting key financial projections and growth potential.
• A company overview that explains your business’s legal structure (corporation, partnership, sole proprietorship, etc.), rationale for its location, and ownership details including your restaurant’s founders, investors and partners. 
• Your restaurant concept and menu, which will describe the type of cuisine you will serve along with your service style, possibly some sample dishes and pricing strategy and an explanation of what makes your restaurant stand out from competitors. 
• A market analysis that describes your target demographic, local demand and an assessment of your competitors. 
• Your marketing plan, which will include your restaurant name and logo as well as your marketing and promotional strategies. 
• An operations plan that describes your staffing needs, suppliers you will use, how you’ll manage your inventory and what you envision for the restaurant’s daily workflow. 
• Financial projections, including how much it will cost to open your restaurant (lease, equipment, licenses and marketing), projected revenue and profit margins and a break-even analysis and funding requirements. 
• An industry overview that shows you understand current restaurant trends and how to open a restaurant business even in the face of potential economic factors that could impact your costs and revenue. 
• A SWOT analysis that describes your restaurant business’s strengths, weaknesses, opportunities and threats. 
• Information on your ownership and management team, including bios or resumes of key team members, including managers, chefs and investors. 
• The milestones and timelines you need to meet, including hiring staff, soft and/or grand openings, deadlines for each stage of development and obtaining permits and licenses, which will vary depending on where in Canada you’re opening your business. For example, obtaining a business licence in Toronto has different requirements and processes than in other cities.  
• Supporting documents that help make the case for financing, such as a sample menu, floor plans, copies of permits and licences and mockups of marketing materials.

3. Plan your restaurant funding strategy

Opening a restaurant requires significant upfront capital for space, equipment, permits, staffing and marketing. A solid funding strategy is key to getting started and staying afloat in the early months. Assess how much it will cost to open your restaurant and operate it. Be sure to calculate your break-even point, and create a cash flow analysis as well to get a better understanding of your predicted cash flow.

There are a number of potential funding options to consider for starting a restaurant:

• Canada’s Small Business Financing Program
• Square Loans
• Credit union loans
• Traditional bank loans
• Business line of credit
• Private investors
• Crowdfunding

4. Obtain the licences and permits needed to open a restaurant

Before serving your first customer, securing the right licences and permits is crucial to opening your restaurant legally and avoiding costly fines or delays. Requirements vary by location, but common essentials include the following:

• Business licence
• Register for a Business Number (BN) with the CRA for payroll and GST/HST  
• Food service licence from your local health department
• Liquor licence if you plan to serve alcohol
• Signage permits for exterior displays
• Occupancy permits to ensure your space meets safety codes.

Since approvals can take weeks or even months, start early and consider consulting local authorities (your city or province website is a great place to start) for a complete checklist tailored to your restaurant concept and location. For example, this government guide to opening a restaurant in Ontario breaks down the various requirements involved. Proper licensing provides the foundation for a smooth and compliant grand opening.

5. Register your business

One of the things you’ll need to open a restaurant is a business registration.

You’ll first need to decide on a business structure — the three most common ones are a sole proprietorship, general partnership and incorporation. Then, you’ll need to register your business name. You do this through your province or territory. 

If you choose to incorporate, you can go with a federal incorporation, which protects your name and allows you to operate across Canada, or a provincial incorporation if you only plan to operate in one province. You’ll also need to register your business with the Canada Revenue Agency (CRA) to receive your Business Number (BN), which you’ll need once you hire staff or start collecting and remitting the GST/HST sales tax. 

You might consider trademarking your restaurant’s name for extra brand protection, too.  

Register a business in Ontario 

Ontario is home to the largest share of small businesses in Canada, according to Innovation, Science and Economic Development Canada. The province has some of the lowest corporate tax rates in the country and offers resources that make it easier to start and grow your business. 

For example, ​​Ontario’s Skills Development Fund helped fund Restaurants Canada’s Pathways to Careers in Foodservice program. The initiative supports restaurant and foodservice businesses through grants, subsidies and recruitment assistance. 

To register your business in Ontario, start by picking a name. Conduct a Nuans name search to make sure it’s not already taken. Then, register online through the Ontario Business Registry. Select your business type to get started. You will be prompted to create a My Ontario Account and a ServiceOntario Account during set-up, which you’ll need to access various services. 

There are registration fees: $60 for sole proprietorships and partnerships and $300 for a corporation. You’ll be issued a nine-digit Ontario Business Identification Number (BIN) — note that it isn’t the same as the BN provided by the CRA.

6. Choose the right location for your restaurant

Choosing the right location is one of the most critical decisions you’ll make for your restaurant. Location is often the largest determinant of success or failure when you start a restaurant. The ideal spot should align with your concept, draw in your target audience and stay within budget. For example, a high-visibility area with heavy foot traffic may cost more but can drive steady customers, while a hidden gem could work for opening a small restaurant if you have a strong marketing plan.

Consider the surrounding businesses, local demographics and competition to ensure your restaurant setup fits the neighbourhood’s vibe and demand. Don’t just settle for affordability: Prioritize long-term viability because even the best food can struggle in the wrong location.

Here are some key factors to consider:

• Foot traffic and visibility: Is your restaurant easy to find with good signage potential?
• Accessibility and parking: Is your restaurant location convenient for drivers, pedestrians and public transit?
• Local competition: Are there too many similar restaurants in the area, or have you identified an untapped opportunity?
• Target market: Does the neighbourhood match your ideal customer’s income and dining habits?
• Cost and lease terms: Can you afford rent, utilities and build-out expenses? Are lease terms flexible?
• Future growth potential: Is the area developing or at risk of decline?
• Delivery and takeout viability: Is the location convenient for delivery drivers if you plan to offer takeout options?

7. Create a menu

Your menu is the centrepiece of your restaurant and should reflect your concept and brand. But it’s also a marketing tool that can help convince new customers to try your restaurant. Here are some tips for building your restaurant menu:

• Concept alignment: Ensure your dishes reflect your restaurant’s theme, cuisine and brand identity, and tailor offerings to your target audience’s preferences.
• Balance and variety: Include diverse options (vegetarian, veganand gluten-free, for example) to cater to different diets, or offer a mix of flavors, textures and portion sizes.
• Pricing strategy: Research competitor pricing and perceived value, and make sure to avoid under or overpricing. Calculate your food costs, and aim for a 25-35% food cost ratio to maintain profitability.
• Ingredient sourcing: Partner with reliable suppliers for consistent, high-quality ingredients, and consider seasonal availability and local sourcing for freshness and marketing appeal.
• Menu design: Organize logically (drinks, starters, mains desserts) for easy navigation, and use concise, enticing descriptions. Limit choices to reduce decision fatigue and kitchen complexity. If you have high-profit items, strategically place them in prime spots on the menu, highlighting them with bold fonts or icons. 
• Operational feasibility: Make sure your dishes align with kitchen size, equipment and staff skill level.
• Testing and refinement: Conduct staff tastings, gather customer feedback and set yourself up to adapt to seasonal availability as well as ingredient costs. Identify underperforming menu items and look for opportunities for specials or menu rotations.
• Perfect your menu: Remember that a great menu evolves with your customers and market! Take your efforts to the next level by using data to improve your offerings. For example, optimize your menu for takeout and delivery by identifying dishes that travel well within your top-sellers. 

8. Design an efficient restaurant layout 

A smart restaurant layout balances efficiency, safety and comfort. The front-of-house needs a logical flow from entry to dining with well-spaced seating. The back-of-house requires a streamlined kitchen workflow with designated prep, cooking and storage zones. Your key priorities should include: 

• Smooth staff movement
• Maximum seating without crowding
• Strict compliance with health, safety and accessibility codes

Before opening your restaurant, test layouts with staff walkthroughs before finalizing. Small tweaks can prevent big operational headaches later. A Kitchen Display System (KDS) can help sync front- and back-of-house processes and streamline order management and food preparation. 

9. Order restaurant equipment

When ordering restaurant equipment, start by selecting items that directly support your menu and cooking methods. Don’t waste money on unnecessary appliances. Invest in reliable, energy-efficient models to reduce long-term costs, even if the upfront price is higher. Balance your budget by mixing new and used equipment.

For example, you can buy critical items like ovens and refrigeration new for warranties and efficiency, while considering gently used prep tables or shelving to save cash. A clear equipment checklist can help guide your purchases and make sure you don’t miss any essentials. Here are some tips to help you plan: 

• Have a menu-first approach. For example, you’ll want a grill for burgers and woks for Asian cuisine.
• Buy Energy Star-rated appliances to lower utility bills.
• Take advantage of used bargains. Look for auction deals or restaurant closures.
• Pay the extra for service contracts for high-use equipment like HVAC and dishwashers.
• Rent or lease expensive specialty equipment (like pizza ovens) to test demand before buying.
• Purchase reliable and fast restaurant point-of-sale (POS) equipment. You want your customers to have an efficient and pleasant dining experience from start to finish!

10. Hire the right staff

Your staff will ultimately make or break your restaurant, so do your due diligence before you hire. Make a list of how much support you need to run your front and back of house efficiently. Once hired, make sure your employees understand what’s expected of them and that you provide an environment that will encourage retention:

• Define roles clearly (e.g., management team, kitchen staff, front-of-house staff, bar staff, etc.).
• Thoroughly train staff on service standards and safety protocols.
• Foster a positive working environment.

You’ll also need to determine if you want to leverage staff management software to help manage aspects like shift scheduling, payroll prep, and tip pooling. Restaurant payroll and operations can be complex, especially with varying state, federal, and local laws and regulations around wages and tips, so be sure you understand the rules for your city and province.

11. Promote your restaurant launch 

You’ve completed all the grunt work of your restaurant setup and are ready for opening. Make your restaurant launch unforgettable with smart pre- and post-opening hype geared toward your target audience. Here are some ideas:

• Tease your concept through social media sneak peeks and local influencer collaborations.
• Secure visibility on Google and Yelp.
• Fuel word-of-mouth by launching promotions. 
• Partner with neighbouring businesses for cross-promotion.
• Embed yourself in the community through sponsorships or charity tie-ins.
• Host a soft opening to observe your team in action and fine-tune operations before your official launch.
• Build a user-friendly professional website to help customers easily find your hours, menu and location — and even place orders online. Square makes it easy to set up online ordering and streamline your customer experience from day one. 

Be sure to track which marketing channels bring in the most customers, and then double down on what works.

How to open a restaurant FAQs

How much does it cost to start a restaurant?

Restaurant startup costs are dependent on various factors, including:

• Size of the restaurant
• Type of restaurant (see above)
• Number of staff
• Restaurant real estate

While the cost of starting a restaurant varies significantly, most new establishments will spend well into six figures to open their doors. And incorrect forecasts and budgeting are a major reason why restaurants fail. However, there are plenty of financing options for restaurant owners to help get started. 

How can I take payments at my restaurant? 

Taking payments from customers is simpler than ever before. First, you need to choose a payment processor. A payment processor handles credit, debit, and other transactions for your business. You want to look for a payment processor that accepts all major credit cards, has one consistent rate (with no hidden fees), and has quick deposit times.

An intuitive point-of-sale system lets you get started taking payments quickly, and it can also grow with your restaurant (and help it grow). An integrated restaurant point of sale not only lets you accept all types of payments — including legacy magstripe, EMV chip, and NFC (mobile payments) — but can also help you run your entire restaurant more efficiently.

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Visit our Square for Restaurants Demo page to see how we make taking payments and running a restaurant easier.

What type of restaurant should I open?

There are a wide array of restaurant types, and determining what suits your business interests will depend on your desired cuisine, audience, location and startup costs. Here are the key restaurant segments to consider:

• Food truck businesses provide an excellent opportunity for aspiring restaurateurs to break into the industry because they tend to be more affordable than a brick-and-mortar location. 
• Pop-up restaurants are another great way to test out a menu and gauge customer interest in a temporary setting.
• Quick-service restaurants (QSRs) specialize in quick preparation (many menu items can be made in less than two minutes) and counter service, with self-seating and minimal frills. 
• Fast-casual establishments are a slight step up in complexity from quick service restaurants. They’re still built on a counter service or kiosk ordering model and open dining room seating. However, their menus are more complex and customizable, with food that takes slightly longer to prepare and slightly higher prices.
• Casual dining offers a full-service restaurant experience for customers at an affordable price. 
• Fine dining restaurants provide customers with an elegant and upscale dining experience with higher price points, top-quality food and the best service the industry can provide. 

Tips from 3 restaurateurs on how to start a restaurant

We’ve tackled how to open a restaurant. Now there’s the million-dollar question every aspiring restaurant owner asks: Will my restaurant be successful?  Here are three tips from experienced owners that you can use when starting out:

1. Efficiencies matter.
   Justin Leon, co-owner of Toronto’s Lambo’s Deli, emphasizes the importance of speedy service and smooth operations: “Because we’re a quick-service restaurant with something going out the door every 30 to 45 seconds, transaction time has to be as fast as humanly possible.” 
2. Put your own spin on the menu.
   Amr Elmazariky, founder of Tut’s Egyptian Street Food, has stayed true to his roots while remaining flexible to find a winning menu formula: “We try to stay true to our Egyptian identity as much as we can, but we want to stay connected to our community. Being in North America, we have modified a little bit of the recipes to make them appealing to the general public.”
3. Create a family feel. 
   Tony Migliarese, owner of Calgary’s DOPO, has created a warm and welcoming family feel that keeps diners coming back: “[The restaurant] looks like my grandma’s basement, with the photos on the wall of our staff and our family,” says Migliarese. “Everything on the wall means something.”