Phase I: Planning and Foundation

1. Define my business idea

2. Conduct market research

3. Write a business plan

4. Choose your legal structure

5. Address immigration status and work authorization

Define my business idea

This is one of the most important steps in starting a food service business. It helps you define what your food service business will offer, to whom, and how. Here is a detailed breakdown to guide you:

1. Choose my business type:

   1. What kind of food service do I want to open? Full-service restaurant, fast-casual, food truck, catering service, bakery, coffee shop, or meal prep/delivery.

   2. What kind of experience do I want to create? Sit-down dining with table service, grab-and-go for busy customers, delivery/takeout only.

   3. What is my style? Formal dining, family-friendly, street food, comfort food, health-focused, farm-to-table?

2. Identify my target customers:

   1. Who do I want to serve? Families, students, office workers, tourists, immigrants, specific cultural communities, health-conscious eaters.

   2. What are their needs or preference? Affordable prices, authentic flavors, healthy options, fast service, unique cultural dishes, gluten-free, fast service?

   3. Where do they live or work? Near universities (Duke, NCCU), in downtown Durham, suburban neighborhoods, business parks.

3. Choose my cuisine:

   1. Main cuisine or menu focus: Vietnamese, Mexican, Southern, BBQ, vegan, burgers, Mediterranean, baked goods, coffee/tea, smoothies, etc.

   2. Signature dishes: What will make me stand out?

      Examples: banh mi, empanadas, smoked brisket, artisanal bread, specialty coffee or smoothy, or pastries.

   3. Menu size: Keep it focused at first — too many items can overwhelm customers and increase costs.

4. Example of a defined business idea:

   • Business type: Vietnamese food truck

   • Cuisine: Traditional Vietnamese street food with vegan options

   • Service experience: Fast, healthy, affordable Vietnamese foods using local ingredients

   • Style: Takeout and catering at events

   • Target customers: College students, young professionals, festival-goers

   • Menu sample: Pho (beef, chicken, and vegan), bánh mì (grilled pork, chicken, lemongrass beefs, and tofu), spring rolls (shrimp, grilled pork, tofu), Vietnamese iced coffee, smoothies.

Conduct market research

1. Study my competitors: Look at what’s already available in Durham:

   1. Who are my main competitors? Visit local spots, study their menus, prices, strengths, and weaknesses.

   2. What can I do differently or better? Unique flavors, faster service, healthier options, more affordable prices, better atmosphere, community connection, etc.

2. Think about pricing:

   1. What price point matches my concept and customers? Budget-friendly ($), midrange ($$), or premium ($$$).

   2. Shall I offer combos, specials, or happy hours?

Write a business plan

1. What is a business plan?

   A business plan is like a map that helps you stay on track. It’s also useful when you apply for loans, licenses, or investors. A business plan is a written document that explains:

   • What your business will do

   • How it will make money

   • What you need to start

   • How you will run the business every day

2. How to write a simple business plan (step by step)

   1. Business summary: Write a short description of your business idea.

      Example: “I want to open a Vietnamese food truck in Durham, NC. I will sell pho, bánh mì, and coffee at busy locations and events. My food will be affordable and fast, with some vegan options.”

   2. Menu and services: List the foods or services you will offer.

      Example: Pho (beef, chicken, vegan), bánh mì (grilled pork, chicken), tofu spring rolls, Vietnamese iced coffee.

   3. Target customers: Who will buy your food?

      Example: College students, office workers, people at festivals, local families.

   4. Location: Where will you sell?

      Example: Downtown Durham, near Duke University, local festivals, farmers markets.

   5. Prices: What will you charge? How much do you expect to make each day?

      Example: Pho $10, Bánh mì $8, Coffee $4. Expect $500 per day in sales.

   6. Startup costs (Money to open): Write a list of what you need and how much it will cost.

      Example: Food truck: $40,000; Equipment (stove, fridge): $10,000; Permits/licenses: $2,000; Marketing: $1,000

   7. Suppliers: Where will you get your food and supplies?

      Example: Local farmers market for vegetables, wholesale store for rice noodles, bakery for bread.

   8. Staff (if needed): Who will work with you?

      Example: I will hire 1 cook and 1 cashier.

   9. Marketing: How will you tell people about your business?

      Example: Social media (Facebook, Instagram); Flyers at local schools and offices; Discounts for first-time customers

   10. Daily operations: How will your business run each day?

       Example: Open 11am–8pm, shop for supplies in the morning, prep food before lunch rush, clean truck after close.

   11. Financial goals: How much money do you need to make to cover costs and earn profit?

       Example: Daily sales goal: $500; Weekly profit goal: $1,000

3. Tips for writing:

   • Keep sentences short.

   • Use simple words.

   • Make a list or table if it helps.

   • It’s okay if it’s only 2–4 pages to start.

   • Start small. You can update and improve this plan as you go.

     
     

Choose your legal structure

Choosing a legal structure is a very important step when starting your food service business because it affects your taxes, personal liability, permits, paperwork, and ability to raise money. Here’s a brief explanation of the most common options, their pros and cons, and what they mean for you as a small business owner in Durham, NC.

1. Sole proprietorship

   1. What it is: You are the only owner, and the business is not legally separate from you.

   2. Pros:

      1. Easy and inexpensive to set up

      2. You have full control

      3. Simple taxes (profits are reported on your personal tax return)

   3. Cons:

      1. You are personally liable for business debts, lawsuits, or accidents

      2. Harder to raise money from investors

   4. Best for: Very small or part-time businesses, side businesses, or one-person operations

2. Partnership

   1. What it is: Two or more people own the business together.

   2. Types:

      1. General Partnership (GP): All partners share control and liability.

      2. Limited Partnership (LP) or Limited Liability Partnership (LLP): Some partners have limited control and liability.

   3. Pros:

      1. Easy to form, flexible

      2. Partners can share money, skills, and workload

   4. Cons:

      1. Partners are personally liable in a general partnership

      2. Disagreements can hurt the business

   5. Best for: Two or more people starting a business together who trust each other and want to share profits and responsibility

3. Limited Liability Company (LLC)

   1. What it is: A separate legal entity that protects the owner(s) from personal liability.

   2. Pros:

      1. Protects your personal assets (house, car, bank accounts) from business debts and lawsuits

      2. Flexible management

      3. Profits can “pass through” to your personal taxes, avoiding double taxation

   3. Cons:

      1. Costs a little more to set up than a sole proprietorship or partnership

      2. Annual state fees and paperwork

   4. Best for: Small to medium food businesses that want liability protection and flexibility

4. Corporation

   1. What it is: A separate legal entity owned by shareholders.

   2. Types:

      1. C Corporation (C-corp): Pays taxes on profits, and owners pay taxes on dividends

      2. S Corporation (S-corp): Passes income to shareholders’ personal tax returns (limits on number of shareholders)

   3. Pros:

      1. Strong liability protection

      2. Easier to raise money from investors

      3. Can issue shares of stock

   4. Cons:

      1. Expensive to set up

      2. More regulations, recordkeeping, and tax filings

      3. Double taxation (for C-corps)

   5. Best for: Larger businesses or those planning to raise significant investment

5. Things to consider when choosing

   • How big will your business be?

   • How many owners are involved?

   • Do you want to protect your personal assets?

   • Will you seek outside investors?

   • Are you ready for extra paperwork and fees?

   
   

   Check out Phase II and Phase III for more instructions on setting up your business bank account and register your business in Durham.

Address immigration status and work authorization

When you are an immigrant wanting to start a business in the U.S., your legal immigration status determines whether you can legally own, operate, or work in your business. Here’s what you consider doing:

1. Check your current status (Crucial step)

   • Ensure your current immigration status allows you to legally own and operate a business in the United States. Specific visa types have different rules regarding employment and self-employment.

   • Are you on a student visa? Work visa? Green card? Something else?

2. Understand the rules:

   Read the terms of your visa — but don’t rely on online summaries or advice from friends.

3. Consult an immigration attorney

   This is highly recommended to understand your specific rights and limitations based on your visa or residency status. They can advise if you need to adjust your status or obtain specific work authorization.

   • Explain if you’re allowed to own and operate a business.

   • Help you apply for a change of status or work authorization if needed.

   • Help you avoid accidental visa violations.