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Founder guide · Worked example: Austin, Texas

How to open a coffee shopStep-by-step, with a printable checklist

Six steps from idea to opening day: the business plan, the paperwork with the IRS and the state, the city permits for your space, the health permit, your team and your menu. Each step names the office you deal with and what it costs, where the office says so.

Get the printable checklist

Free, no signup. Rules as of October 2026.

Your route

From idea to opening day in six steps

Do them roughly in this order: the zoning check comes before the lease, and the health plan review comes before the remodel. Tap a step to jump to it.

Step 1 of 6

Plan the concept and the cost of opening

Before you look at a single storefront, decide what kind of coffee shop you want to run. It changes almost everything after it.

An espresso bar that only sells drinks and pre-packaged pastries is simpler to build and permit than a café that cooks breakfast. Cooking means more equipment, a bigger kitchen, and in Austin usually a grease interceptor. Seating changes the space you need, and alcohol adds a state permit and a city review.

Write it down as a business plan. The U.S. Small Business Administration (SBA) explains two formats: a traditional plan with all the detail a bank wants to read, and a lean one-page plan that the SBA says can take as little as an hour. Either way, it should answer who your guests are, what you sell, what it costs you, and how many cups a day you need to sell to pay rent and wages.

For the money, list every cost in the worksheet and fill in the estimates from real quotes: your landlord, a contractor, an equipment dealer, an insurance agent. Savings, partners, a bank loan or an SBA-backed loan (the SBA's microloans go up to $50,000) are the usual sources. Keep a cash reserve: the first months rarely pay for themselves.

Price each drink from what goes into the cup (beans, milk, cup, lid) with our free menu price calculator, so your menu covers your costs from day one.

Ask the landlord early who pays for what in the build-out. Plumbing, a grease interceptor and electrical work for an espresso machine can be the biggest surprise in the budget.

Startup budget worksheet

No made-up numbers: fill in your own quotes. The same sheet prints on page 2 of the checklist.

CategoryEstimateActual
Lease deposit + first month's rent$$
Build-out and remodel$$
Espresso machine, grinder, equipment$$
Furniture, signs and decor$$
Permits, licenses and fees$$
Opening stock (coffee, milk, cups)$$
Register, software and internet$$
Insurance$$
Staff and training before opening$$
Cash reserve for the first months$$
Total$$

Step 2 of 6

Register the business and get your tax IDs

This is the paperwork that makes your coffee shop a business. In Texas it runs through three offices: the Secretary of State, the IRS and the Comptroller. Do it in this order, because each one asks for the result of the one before.

  1. 1

    Pick a structure and file it

    Most small cafés are a sole proprietorship or an LLC. An LLC keeps business debts apart from your own money; an accountant can tell you what fits your taxes. To form a Texas LLC, you file a Certificate of Formation (Form 205) with the Secretary of State, online through its filing site (SOSDirect / SOSPortal).

    Where
    Texas Secretary of State
    Cost:
    $300 filing fee for an LLC (Form 205)
    Other states:
    every state has its own form and fee: search for your Secretary of State's business filings.
  2. 2

    Register your shop's name (DBA)

    If the name on your sign is not the legal name of your company or yourself, you file an assumed name certificate. An LLC or corporation files it with the Secretary of State (Form 503). A sole proprietor files it with the county clerk of each county where the shop is.

    Where
    Texas Secretary of State or your county clerk
    Cost:
    $25 at the Secretary of State (Form 503); county fees vary
    Other states:
    the name is often called a DBA or fictitious business name and is filed with the state or the county.
  3. 3

    Get an EIN from the IRS

    The Employer Identification Number is your business's tax ID. You need it once you have employees, and banks ask for it when you open a business account. Form the LLC first, then apply online: if it's approved, you get the number right away.

    Where
    IRS (irs.gov, online application)
    Cost:
    Free. The IRS never charges for an EIN.
  4. 4

    Get a Texas sales and use tax permit

    Anyone who sells taxable items in Texas needs this permit. Apply with the Texas Comptroller once you have your entity and EIN, and well before you open: the Comptroller says to allow 2 to 3 weeks.

    Where
    Texas Comptroller of Public Accounts
    Cost:
    No fee, but the Comptroller may ask for a security bond
    Other states:
    most states call it a seller's permit or sales tax license, issued by the state revenue department.
  5. 5

    Know that your coffee is taxable

    In Texas, prepared food is taxable, and the Comptroller lists hot drinks like coffee and tea, including to-go cups. The state rate is 6.25%, and with local taxes the combined rate is at most 8.25%. Look up the exact rate for your address in the Comptroller's rate locator and set up your register with it.

    Where
    Texas Comptroller (publications 94-117 and 96-280)

Texas also has a franchise tax for many businesses. For 2026 and 2027 no tax is due below $2,650,000 in revenue, but you may still have to file a report: ask your accountant or the Comptroller.

Step 3 of 6

Find the space and get the city permits

In Austin, the city's Development Services Department handles zoning, building permits and signs, and Austin Water checks the grease interceptor. Each pin on the plan is one check.

Check before you sign the lease. Ask the city whether a café is allowed at that address and whether the space needs a change of use. A lease you can't use, or a remodel you didn't budget, is the most expensive mistake on this list.

Step 4 of 6

Get the health permit and pass the inspection

In Austin and Travis County, Austin Public Health issues the Food Enterprise Operating Permit. It comes at the end of a path that starts before your contractor does: plans first, then the build-out, then the inspection.

  1. 1

    Plan review before you build

    New construction and remodels need a plan review. Inside the City of Austin you submit the Food Enterprise Plan Review Application with your building plans through Development Services, so the kitchen, sinks and surfaces are approved before they are built.

    Where
    Austin Public Health with Development Services
    Cost:
    $221 to $312, depending on the size of the remodel (City of Austin)
    Other states:
    your city or county health department; where there is none in Texas, the state health department (DSHS).
  2. 2

    Pre-opening inspection, then the operating permit

    Every new place, remodel and change of owner gets a pre-opening inspection. Once it is approved, you get the operating permit. It must be renewed every year.

    Where
    Austin Public Health
    Cost:
    Inspection $178. Permit from $309 a year, by annual sales (and by risk class under the fee schedule effective November 1, 2026)
  3. 3

    A certified food manager during all opening hours

    Texas food rules say a certified food protection manager must be present during all hours of operation. You can take the exam yourself. The original certificate must hang where guests can see it.

    Where
    Texas Food Establishment Rules (DSHS)
  4. 4

    Food handler training for your staff

    Every food employee who is not the certified manager needs an accredited food handler course within 30 days of starting the job. Pick one from the DSHS list of accredited programs. Courses are short and online.

    Where
    Texas DSHS (accredited course providers)
    Other states:
    food handler rules differ a lot by state: some require a card, some don't.

Our own self-check for the week before, not an official form. Ask Austin Public Health what they look at.

Start your fridge checks on day one with a free temperature log sheet and cleaning plan to print.

Step 5 of 6

Hire your team, get insured, license your music

The day you hire your first barista, you become an employer with a few federal and Texas duties. Insurance and music licensing apply even if you work alone.

Form I-9 and W-4

Every new hire fills out Form I-9 (you check their documents within 3 business days of the first day of work) and Form W-4, so you withhold the right federal income tax.

USCIS · IRS

Report new hires

Texas employers report new hires and rehires within 20 calendar days of the day they start earning wages.

Texas Attorney General, Child Support Division

State unemployment tax

Most employers register with the Texas Workforce Commission and pay state unemployment tax. Check with the TWC when your business must register.

Texas Workforce Commission

Workers' compensation

In Texas, most private employers may choose whether to carry workers' comp. If you don't, you must tell your employees and the state's Division of Workers' Compensation.

Texas Department of Insurance

Business insurance

General liability and property insurance protect you against a slip at the counter or a broken espresso machine. Your lease often says which policies you need: read it before you call an agent.

Your insurance agent · your lease

Music licenses

Playing recorded or streamed music in your café is a public performance. Licenses come from the performing rights organizations (ASCAP, BMI, SESAC, GMR). The radio exemption only covers broadcast radio or TV in food places under 3,750 square feet, not your playlist.

ASCAP · BMI · SESAC · GMR

In other states, the federal rows (I-9, W-4) are the same; new-hire reporting, unemployment tax and workers' comp rules come from your state.

Step 6 of 6

Write the menu and plan opening day

Your menu is the last piece of paperwork and the first thing guests see. Know which rules apply to it, then get it on paper, on the tables and on the wall.

Menu rules: required or just a good idea?

Allergens on the menu: recommended, not required in Texas
No federal or Texas law requires allergen statements on a café menu. What Texas does require is an allergen awareness poster where your food staff can see it. The FDA's newest model Food Code (2022) recommends telling guests in writing which major allergens a dish contains, and guests ask about milk and nuts every day, so a clear list saves time at the counter.
Packaged grab-and-go food: labels
Federal allergen labeling applies to packaged food. If you pack and label sandwiches or cookies to sell, ask Austin Public Health which labeling rules apply before you start.
Calorie counts: only for chains
The FDA calorie labeling rule applies to restaurants that are part of a chain with 20 or more locations under the same name. An independent coffee shop doesn't have to post calories.
Prices and sales tax
Coffee and other prepared food are taxable in Texas. Set the tax rate for your address in your register before the first sale.

The FDA's nine major food allergens (the Big 9)

  • Milk
  • Eggs
  • Fish
  • Crustacean shellfish
  • Tree nuts
  • Peanuts
  • Wheat
  • Soybeans
  • Sesame

Make a Big 9 allergen chart for your drinks and pastries for free and keep it at the register.

Free tools for the menu

Plan a soft opening before the big day: a few hours for friends, family and neighbors. You find out where the line gets stuck, which drink takes too long and what's missing on the menu, while it's still easy to fix.

Free tool

Coffee shop opening checklist (printable)

Every step of this guide as one list. Check off what's done, add your shop's name and opening day, then print it or save it as a PDF. Two pages, US Letter or A4. Nothing is sent anywhere: your checkmarks stay in this browser.

0 of 38 done

1. Plan & budget
2. Company & tax IDs
3. Location & city permits
4. Health permit
5. Team & insurance
6. Menu & opening day

Saved in this browser only.

Paper

Sources

Every rule and fee on this page comes from the agency's own page or the rule itself. We checked each one on October 15, 2026.

Not legal advice

This guide is general information for coffee shops in Austin, Texas, not legal, tax or insurance advice. Rules, fees and forms change, and your space or menu may need more. Check with each office before you file or sign.

Rules as of October 2026

  1. Form 205: Certificate of Formation, LLC (instructions)Texas Secretary of State
  2. Form 503: Assumed Name Certificate (instructions)Texas Secretary of State
  3. Business formation FAQs (assumed names, county clerk)Texas Secretary of State
  4. Apply for an EIN onlineIRS
  5. Texas sales and use tax permitTexas Comptroller
  6. Sales tax permit FAQ (no fee, security bond)Texas Comptroller
  7. Business Permits Office (no general state license)Office of the Texas Governor
  8. Publication 94-117: Restaurants and the Texas sales taxTexas Comptroller
  9. Publication 96-280: prepared food, hot drinksTexas Comptroller
  10. Sales and use tax ratesTexas Comptroller
  11. Franchise taxTexas Comptroller
  12. Zoning verificationCity of Austin, Development Services
  13. Small business permitting (change of use)City of Austin, Development Services
  14. Types of permits (building, sign, sidewalk café)City of Austin, Development Services
  15. Pretreatment FAQ (grease interceptors)Austin Water
  16. Fixed food establishments (permit steps and fees)Austin Public Health
  17. Permit fee schedule (effective November 1, 2026)Austin Public Health
  18. 25 TAC § 228.31: certified food protection managerTexas Food Establishment Rules (Texas Secretary of State)
  19. 25 TAC § 228.33: allergen awareness posterTexas Food Establishment Rules (Texas Secretary of State)
  20. Food handler training programs (30 days)Texas DSHS
  21. Retail food establishments FAQ (who issues permits)Texas DSHS
  22. License and permit typesTexas Alcoholic Beverage Commission
  23. Alcoholic beverage permits (city certification)City of Austin
  24. Austin Fire permits (public assembly)Austin Fire Department
  25. Form I-9USCIS
  26. About Form W-4IRS
  27. New hire reportingTexas Attorney General
  28. Workers' compensation coverage for employersTexas Department of Insurance
  29. 17 U.S.C. § 110(5): the radio and TV exemptionU.S. Copyright Office (Title 17)
  30. Copyright and the Music Marketplace (PRO licenses)U.S. Copyright Office
  31. Food allergies: the major food allergensFDA
  32. Food Code 2022 (allergen notice, ¶ 3-602.12)FDA
  33. Menu labeling requirements (chains of 20+)FDA
  34. Write your business planU.S. Small Business Administration
  35. SBA loans (7(a), 504, microloans)U.S. Small Business Administration

Questions about opening a coffee shop

How much does it cost to open a coffee shop?

There is no honest single number: rent, the build-out and the espresso setup decide most of it, and they differ by city and space. The fixed fees are small and public. In Austin: $300 to form an LLC, the EIN and the sales tax permit are free, the health plan review is $221 to $312, the pre-opening inspection $178 and the operating permit from $309 a year. Fill in everything else from real quotes in the budget worksheet on page 2 of the checklist.

What licenses and permits do I need to open a coffee shop in Texas?

In Austin: an entity filing with the Secretary of State (if you form an LLC), an EIN from the IRS, a sales and use tax permit from the Comptroller, the city's zoning check, building and sign permits and, if needed, a new certificate of occupancy, Austin Water's grease interceptor approval, and Austin Public Health's food permit with plan review and pre-opening inspection. You also need a certified food manager and food handler training for staff. Beer or wine adds a TABC permit.

Do I need a business license in Austin?

Texas has no general business license: the state's Business Permits Office says your filing with the Secretary of State or the county clerk takes its place. What you do need are the permits for what you sell and where. For a coffee shop, those are the permits in this guide: zoning, building and sign permits from Development Services and the food permit from Austin Public Health.

How long does it take to open a coffee shop?

It depends most on the space and the remodel. A few steps have published times: the zoning verification letter typically takes 7 to 10 business days, and the City of Austin says its small business permitting help brings a typical change of use down to about two weeks. Plan review, the build-out and the inspection come on top. Work backward from your opening day with the checklist.

Can I start a coffee shop with no experience?

Yes. No license or permit asks for café experience. Someone with a food manager certificate must be there during all opening hours, and you can take that exam yourself. Work a few shifts in a busy café, write a lean business plan, and price your drinks with the menu price calculator before you sign a lease.

Do I have to put allergens or calories on my menu?

In Texas, neither is required for an independent coffee shop. Calorie counts are only required for chains with 20 or more locations. For allergens, Texas requires a poster for your staff; the FDA's model Food Code recommends telling guests in writing. A Big 9 allergen chart at the register covers that.

Do I need a license to play music in my coffee shop?

For recorded or streamed music, yes: licenses come from the performing rights organizations (ASCAP, BMI, SESAC, GMR). The exemption in copyright law only covers radio or TV broadcasts in food places under 3,750 square feet, or larger ones with limited speakers.

Is the coffee shop checklist free? Do I need to sign up?

It's free and needs no account. Your checkmarks, shop name and date are saved in your browser only. Print it or save it as a PDF, on US Letter or A4, with your checkmarks or as a blank copy.

I'm not in Austin. Does this guide still help?

Yes. The federal steps are the same everywhere: the EIN, Forms I-9 and W-4, the calorie rule for chains and music licensing. The state and city steps have the same shape, but different offices and fees: your Secretary of State, your state tax agency, your city's planning and building department and your local health department. Each step above says where to look.

Starting with a truck instead of a storefront? Our guide to food truck permits and licenses covers the Texas license, the commissary and the fire inspection, with a printable permit binder.

By momoscreen (JetCoders GmbH, Vienna)Updated:

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