Starting a burger business is an exciting venture that combines culinary creativity with smart business sense. The market for burgers is a multi-billion dollar industry, with a steady demand from families, office workers, and late-night diners.
This guide will take you through the practical steps of validating your concept, securing funding, obtaining necessary licenses, and selecting the right location to help you launch a successful burger business in the U.S.
Step 1: Plan your business and validate your concept
Research your local market
First, get a feel for your target neighborhood. Spend a few days observing foot traffic patterns near potential locations. You can also create a simple survey using Google Forms to ask 20-30 locals about their price sensitivity and what they want in a burger joint.
Speaking of what people want, check Google Trends for local search interest in terms like "smash burger" or "vegan burger". Also, use Yelp for Business to analyze nearby competitors. A frequent mistake is to only read reviews instead of visiting them to see their operations firsthand.
Estimate your startup costs
Understanding the financial side is a big step. Initial costs for a burger business can range from $30,000 to over $130,000, depending on your city and the scale of your operation. A detailed budget is your best friend here. Here is a typical breakdown.
- Kitchen Equipment: $20,000 - $100,000
- Initial Food Inventory: $5,000 - $10,000
- Licenses and Permits: $1,000 - $5,000
- Lease Security Deposit: $5,000 - $15,000
These figures give you a starting point for your business plan. Securing a location and purchasing equipment represent a considerable investment, so thorough financial planning from day one will set you up for success.
Here are 3 immediate steps to take:
- Visit three direct competitors during their lunch and dinner rushes.
- Draft a short survey for potential customers in your target area.
- Create a spreadsheet to budget for your top five startup expenses.
Step 2: Establish your legal structure and get licensed
Choose your business entity
You might want to consider forming a Limited Liability Company (LLC). This structure protects your personal assets if the business faces debt or lawsuits. Profits and losses pass through to your personal income, which simplifies tax filing compared to a corporation.
Secure your permits and licenses
At the federal level, you will need an Employer Identification Number (EIN) from the IRS. You can apply for this online for free. It’s like a Social Security number for your business and is necessary for hiring employees and filing taxes.
Your state and city have their own set of rules. Key documents include a business license, a food handler’s permit for you and your staff, and a health department permit. These can cost between $100 and $1,000 and take several weeks to process.
When you apply for your business license, also get your seller's permit from your state's tax agency. Many new owners overlook this, which is needed to collect sales tax. Forgetting this step can create significant issues with your state's department of revenue later on.
Here are 3 immediate steps to take:
- Decide if an LLC is the right structure for your business and file the paperwork with your state.
- Apply for a free Employer Identification Number (EIN) on the IRS website.
- Contact your local health department to request the application for a food establishment permit.
Step 3: Secure your insurance and manage risk
Get the right insurance coverage
Protecting your business from day one is non-negotiable. For a burger restaurant, specific risks like grease fires or foodborne illness claims mean you need tailored coverage. A standard policy might not be enough.
You will want to look into a few key policies. Here is what a typical insurance package includes:
- General Liability: This covers customer injuries, like a slip and fall. Aim for at least $1 million in coverage. Annual premiums often run from $600 to $2,500.
- Commercial Property: This protects your building and equipment. A frequent oversight is underinsuring the kitchen, so ensure your policy covers the full replacement cost of grills and fryers.
- Product Liability: This is your defense against claims of food poisoning or allergic reactions. It is often bundled with general liability.
- Workers’ Compensation: If you have employees, most states require this. It covers medical costs and lost wages for on-the-job injuries.
Instead of a general agent, consider providers that specialize in restaurants. Companies like The Hartford, Next Insurance, or the Food Liability Insurance Program (FLIP) understand your specific needs and can often provide better rates.
Here are 3 immediate steps to take:
- Request quotes from three insurance providers that specialize in restaurants.
- Ask potential insurers if they bundle general and product liability coverage.
- Check your state’s website to confirm its workers' compensation laws.
Step 4: Select your location and buy equipment
A typical burger spot needs 1,200 to 2,500 square feet. When you scout locations, confirm they have commercial zoning that permits restaurant operations. This information is available from your city’s planning department. Good visibility and foot traffic are key.
When you talk to landlords, ask about a Tenant Improvement (TI) allowance to help pay for the build-out. You can also negotiate an exclusivity clause. This stops the landlord from leasing space to another burger restaurant in the same building or complex.
Purchase your kitchen equipment
Your kitchen is the heart of the operation. You can buy new or used, but some items are worth the investment. A frequent mistake is to underestimate ventilation costs, so get quotes for your hood system early. It can easily cost over $10,000.
- Commercial Griddle (36-48 inch): $2,000 - $7,000
- Deep Fryers (2): $1,500 - $4,000
- Type 1 Hood Vent System: $7,000 - $20,000+
- Refrigeration (Walk-in or Reach-in): $5,000 - $15,000
For equipment and initial inventory, check out a supplier like Restaurant Depot. They cater to independent owners and usually do not have high minimum order quantities for most items, which helps manage cash flow at the start.
Here are 3 immediate steps to take:
- Identify three potential locations with the correct commercial zoning.
- Ask landlords about a Tenant Improvement (TI) allowance during initial talks.
- Get at least two quotes for a Type 1 hood vent installation.
Step 5: Set up your payment processing
Choose a payment solution
Most customers expect to pay with cards or digital wallets, so you need a reliable point-of-sale (POS) system. Many new owners get surprised by hidden fees or long-term contracts. Look for transparent pricing, as typical processing rates from other providers range from 2.5% to 3.5% plus monthly hardware costs.
For burger businesses that need to accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit and digital wallets directly through your smartphone - just tap and done.
At just 1.99% per transaction with no hidden costs or extra hardware needed, it's particularly useful for food trucks, pop-up events, or for line-busting during a busy lunch rush.
How JIM works
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers.
Here are 3 immediate steps to take:
- Compare the transaction fees and contract terms of two traditional POS providers.
- Download the JIM app to explore its interface and features.
- Decide if a mobile-first payment solution fits your business model.
Step 6: Secure your funding and manage finances
Explore funding options
SBA 7(a) loans are a common path for restaurant startups. Lenders typically want to see a credit score over 680 and a down payment of 10-20%. Loan amounts can range from $50,000 to $350,000, with interest rates often set at the Prime Rate plus 2-5%.
You might also look into equipment financing. This type of loan is secured by the equipment itself, which can make it easier to qualify for. Also, check with your local Small Business Development Center (SBDC) for information on regional grants or microloan programs under $50,000.
Calculate your working capital
Many new owners focus on startup costs but forget about day-to-day expenses. You need enough cash, or working capital, to cover at least your first six months of operations. This includes rent, payroll, utilities, and marketing before your business becomes profitable.
For a small burger shop, this could be anywhere from $50,000 to over $150,000. A detailed operating budget is the only way to know for sure. Underestimating this figure is a frequent reason why new restaurants fail within their first year, so map out your monthly cash needs carefully.
Here are 3 immediate steps to take:
- Review the requirements for an SBA 7(a) loan on the official SBA website.
- Create a six-month operating budget to estimate your working capital needs.
- Schedule a free consultation with your local Small Business Development Center (SBDC).
Step 7: Hire your team and set up operations
Your team brings your burger concept to life. For a small shop, you will likely need two or three core positions to start. A good team is the difference between a smooth service and a chaotic one.
Define your key roles
- Grill Cook: This person is the star of the show. They handle all cooking and plating. Expect to pay $16-$22 per hour for someone with experience.
- Cashier/Front of House: This role takes orders, manages payments, and keeps the dining area clean. Pay typically ranges from $14-$18 per hour.
- Prep Cook/Dishwasher: This person supports the grill cook and keeps the kitchen clean. This is often an entry-level position starting around minimum wage.
All employees must have a valid Food Handler’s Permit, as required by your local health department. Beyond that, train them on your specific recipes and your brand's story. A well-informed team provides better customer service and maintains quality.
To manage schedules and team communication, you might want to use a platform like Homebase or 7shifts. These applications help you build schedules, track hours, and send updates to your staff's phones, which avoids confusion over text messages or paper schedules.
Aim to keep your labor costs between 25-35% of your revenue. Many new owners make the mistake of overstaffing during slow periods, which can quickly eat into profits. Use your first few weeks of sales data to adjust schedules and optimize staffing levels.
Here are 3 immediate steps to take:
- Write job descriptions for a Grill Cook and a Cashier.
- Check your local health department’s website for Food Handler’s Permit requirements.
- Explore the features of a scheduling software like Homebase or 7shifts.
Step 8: Market your business and acquire customers
Build your digital storefront
Your online presence is your new front door. You should claim and fully complete your Google Business Profile. Add at least 10 high-quality photos of your food and space. This is often the first interaction a potential customer has with your brand.
Next, create an Instagram account dedicated to your food. Focus on mouth-watering photos and short videos of your burgers on the grill. A common mistake is to chase followers instead of engaging with local accounts and hashtags to build a community.
Launch with local buzz
A grand opening special can create immediate traffic. Consider an offer like "free fries with any burger" for your first week. This encourages trial and gets people talking. You can also partner with local food bloggers for a pre-opening tasting event.
To encourage repeat visits, implement a simple loyalty program. A physical "buy nine, get the tenth free" punch card is inexpensive and effective. Your goal should be to see 20-30% of your opening week customers return within the first month.
Here are 3 immediate steps to take:
- Claim and complete your Google Business Profile with at least 10 photos.
- Identify three local food influencers and draft an invitation for a complimentary meal.
- Design a simple "buy nine, get one free" punch card for your launch.
Step 9: Price your menu for profit
Calculate your food cost percentage
The most direct way to price your menu is the cost-plus model. First, calculate the exact cost of ingredients for one burger. Aim for a food cost percentage between 28-35%. Many new owners guess this number, which hurts profitability from day one.
To find your menu price, use this formula: Ingredient Cost / Target Food Cost % = Price. For example, if your signature burger costs $3.50 to make and your target is 30%, you would price it around $11.99 ($3.50 / 0.30 = $11.67).
Analyze competitor pricing
With your costs calculated, look at what your competitors charge. Review the menus of three nearby burger spots. You do not need to be the cheapest, but you must understand your position in the market. Pricing too low can signal poor quality to customers.
Consider a tiered strategy. You could offer a simple, high-margin classic burger for $10 and a specialty burger with premium toppings for $15. High-profit add-ons like bacon or avocado for an extra $2 can significantly boost your average check size.
Here are 3 immediate steps to take:
- Calculate the exact ingredient cost for your signature burger.
- Set a target food cost percentage for your business, ideally between 28-35%.
- Analyze the menus and pricing of three direct competitors in your area.
Step 10: Maintain quality and scale your operations
Establish your quality standards
Your kitchen needs clear standards. You might want to have your lead cook get ServSafe certified. Create a daily checklist for cooks to verify patty weight, internal temperature, and assembly time. Many new owners skip written checklists, which leads to inconsistency.
For service, track customer complaints and online reviews. A good target is a 4.5-star average on Google or Yelp. Responding to all reviews within 24 hours shows you care and helps manage your reputation. This simple habit can turn a bad experience around.
Know when to grow
Once you have six months of consistent profitability and regular wait times during peak hours, you can consider expansion. This could mean a second location or a food truck. Before you expand, make sure your operations are documented so you can replicate your success.
As you grow, inventory management becomes more complex. Software like MarketMan can help you track food costs and supplier pricing. This helps you maintain your target food cost percentage, even with higher volume. It also helps you spot waste before it hurts your bottom line.
Here are 3 immediate steps to take:
- Create a daily quality control checklist for your kitchen staff.
- Set a goal to respond to all new online reviews within 24 hours.
- Analyze your labor cost percentage from the last three months to assess staffing.
Starting a burger business is a journey of details. Remember that consistency is your secret ingredient, from the patty's weight to the customer's smile. You have the roadmap, now it is time to take that first, exciting step and build your dream.
As you build, keep your operations simple. For payments, a solution like JIM lets you accept cards on your phone for a flat 1.99% fee, with no extra hardware. It keeps things easy so you can focus on the food. Download JIM to get started.
