Opening a small business is challenging, and one of the most difficult parts of the start-up process is getting all of your permits in place before opening. Below is a list of necessary permits for opening a restaurant, but several apply to any brick and mortar business. I recently wrote a related post on small business taxes in Tennessee: http://taylorberger.com/smallbusinesstax/.

  • Business License: To operate, you will likely need a business license from the county government.  For example, if your business is located in Shelby County you have to get one of a business license, which serves the dual purpose of permitting you to operate and registering you for business tax collection. While the Tennessee Department of Revenue is responsible for collecting municipal and county business taxes, you’ll initially have to go to the county clerk’s office at 150 Washington Ave. to obtain the license. If you’re operating in Memphis, you have to get a combined Memphis and Shelby County license, which is $30. If you’re outside an incorporated municipality, you may need a county license.  The county license in Tennessee is $15. If you are in Arlington, Bartlett, Collierville, Germantown, Lakeland or Millington you will need to go to their city or town hall to obtain your license. More general information for Tennessee restaurants is available at http://www.tn.gov/revenue/tntaxes/business.shtml.  I recommend you check with your state department of revenue to get a list of how to get your business license.

  • Certificate of Use & Occupancy: If your business operates in a commercial area, then you will need a certificate of Use & Occupancy. In Memphis and/or Shelby County you must obtain this certificate. You can check with your local construction code enforcement office to determine what is needed.  In Memphis, certificate of use & occumpancy is obtained from the Shelby County Construction Code Enforcement Office (http://shelbycountytn.gov/index.aspx?NID=390), which is responsible for ensuring that building construction conforms to local zoning regulations and safety standards. Be sure to check with your contractor if you are making improvements in excess of $25,000 to real property.  In Tennessee, the work must be completed by someone holding a State of Tennessee General Contractors license. Your contractor will generally “pull this permit” before construction commences and will work with the Code office through construction until you are cleared to obtain your certificate ($69 fee).

  • Health Department Permit: If you sell food or beverages to the public you will need to obtain a permit from the county health department.  In Memphis, we are required to get a permit from the Shelby County Health Department.  (A complete list of requirements is available at the Health Department Office. In Memphis they are located on the 4th floor of 814 Jefferson Ave.)  Generally if you are a new or remodelled restaurant you must submit a copy of your floor plan showing location sinks, drains, etc. and get their approval before beginning construction or improvements. Upon completion of construction you or your contractor will have to call them to inspect and sign off.  Once sign off has been achieved, you’ll need to pay your annual $300 permit fee and return it to the health department with completed application signed by your health inspector. Following successful permitting the health department will make at least one unannounced visit to your establishment every six months to inspect for health code violations, at which time you will be given a score on a 0-100 scale.

  • Mobile Food Vending Permit: If your food business is mobile (i.e., a “food truck”) then special rules apply.  Because food trucks are a recent phenomenon, very little consistent regulation exists at the state and local level.  Since most municipalities have a local food truck association, we recommend you check with them regarding permitting needs.  If you are in Memphis, you can find complete details at http://memphisfoodtruckers.org/.

  • Weights & Measures: If your business involves weighing or measuring things for sale you will need to register with the city bureau of weights and measures.  The City of Memphis Weights and Measures Bureau is located at 590 Washington Ave…the phone number is (901) 528-2904.  To register, you must pay a $15 annual fee. They will come out and test your equipment and issue you a sticker of compliance. http://www.memphistn.gov/Government/GeneralServices/WeightsMeasuresandMVIB/WeightsandMeasures.aspx

  • Beer Permit: If you want to sell beer you must obtain a permit from the county or municipal beer board. If your business is located in Memphis you have to obtain the permit application from their offices at 2714 Union Ext. STE 100. It is available online here. You can fill out the application and hire a survey firm to provide the information requested, but cannot submit the application until you have a Business License and Certificate of Use and Occupancy. Once the application is submitted, and you’ve advertised in the newspaper and posted the sign, the process generally takes about a month. You must appear before the beer board when it meets the first and third Wednesday of each month. You can obtain a temporary permit after you apply for your permanent permit but before you are granted it by appearing before the beer board and requesting one. The fee for your permit is $300 annually. The temporary permit is $100.

 

  • Liquor License: If you want to sell liquor-by-the-drink (containing more than 5% alcohol by weight) in Tennessee you have to apply to the Tennessee Alcoholic Beverage Commission.  While there are detailed instructions and forms online about how to apply, it is best to skip that and go straight to your local state TABC office. In Memphis you call Jacquelyn D. Harris at (901) 543-7284 and set up an appointment at One Commerce Square . She will sit down with you and go over the forms (several of which are not online) and even give you a “cheat-sheet” checklist. Once completed you will return these forms to her (and mail the relevant Tennessee Department of Revenue forms to Nashville). Once your restaurant is ready to open (meaning everything including furniture and equipment is in place) you can schedule an ABC officer site visit with Ms. Harris, the final step to your application.

Fees depend on number of seats and may be viewed here: http://www.tn.gov/abc/licence%20-%20LBD%20fee%20information%20for%20restaurants.shtml. Another cost is obtaining a $10,000 liquor bond from your insurance agent for the Tennessee Department of Revenue, which depending on the credit of the owners usually does not exceed $300.

  • Signage: If you want a sign, you’re going to have to apply for a permit. Even if you’re moving into an existing space and are just changing the name on the sign you’ve got to apply. While your signage contractor will handle this for you, if you choose to go it alone start with the Sign Ordinance website at the county level.  The Shelby County ordinance is locate at http://shelbycountytn.gov/index.aspx?NID=540. Fees for sign permits is $0.75 per square foot of the sign, including billboards, with a $16 minimum and $20 copy change. You can download permit application and application for inspections on the website.