Get Started – Restaurant Business in India

Restaurant Business sounds exciting but it’s equally challenging to survive in the industry. Most of the restaurants fail within the first year either due to lack of planning or not keeping up with industry trends.
The restaurant is a very rewarding business only if it is when planned well. Once you chalk down the entire business plan in advance then only 50% of the battle will be left to fight.

We have come up with a list of essential ingredients for you to consider before executing an idea/dream of opening your restaurant in India. Here’s a great piece of motivation before we list down these ingredients.

Indian food and beverage industry are worth $400 billion. The sector has been identified as one of the priority sectors under “Make In India” initiative. Consumer spending in India is expected to touch $3.6 trillion by 2020 and it is expected that India will be the 5th largest consumer market by 2030. Factors like increase in per capita income, changing consumer tastes, favorable demographics, demand for nutritious and healthy food will aid in the growth of the F & B industry.”

Restaurant Business plan can be divided into the below broad categories:

Business Plan

Define Uniqueness of your restaurant offerings is it serving, service styles, food etc.

Choose the format of your restaurant business which could be Fine Dine, Resto Bar, QSR, Food Court, Cafe etc.

Brand or Logo
Even if you have not finalized, keep Logo in mind because that’s every business requirement. You can ask help from designers to design logo basis the concept and theme of your restaurant.

Interior Design
Restaurant’s Interiors and exteriors are to be considered an important aspect as it not only a branding exercise but also brings back customers next time. The ambiance of your restaurant also acts as an experience to the customer.

Sample Menu
The menu represents your brand and the audience you are targeting. Your sample Menu should also include prices based on cost analysis and market competition.

Service type
This is specifically for Fine Dine restaurants where the service is depending on the flow and service levels that would be offered to customers.

Target Market
The concept, design, menu, and Location are decided based on the audience you are targeting. This is one of the most important aspects as it impacts the overall business plan and ongoing trends. Choose it wisely after doing market research specifically in your targeted location.

Location plays a major role in your overall Operational Cost and Business expectation from your targeted audience.

Once the Format and Menu are fairly chalked down then list down the equipment or machinery you need to install in your restaurant keeping in mind the targeted audience and the quality of service levels you will be providing them.

Human Resources
Attrition rates in the restaurant business are very high therefore this department needs to be very strongly planned, hired, trained and retained. A single person’s nonavailability can affect business.

Restaurant Start-Up Costs
There is no specific answer to the amount you will need to spend to open a Restaurant Business as the cost varies depending on many factors listed below:

Real Estate and Outlet Designing costs
Equipment’s and Initial Raw Materials
Marketing Expenses
Initial Level of Employees
Technology Implementation

Raise Funds

One of the major challenges for restaurateurs’ is arranging funds. A business plan helps you to evaluate the required funds to start your Restaurant and using the same one can also tweak plans based on the availability of funds. In a restaurant business, one does not expect to reach a break-even point in the first 6 months, it may even go beyond 6 months depending on format and the amount of investment one has made. Depending on the concept of restaurant you must finalize funds for capital and following few months operational investments. Your personal Savings, Bank Loan or Government Policies or VC/Angel funding are the ways to raise money for your restaurant.

Required Licenses

To start any restaurant in India, you need to acquire licenses from the government for which the cost varies, depending on the size and concept of your venture. You need to apply them as early as possible because as we all know government things takes its own sweet time for approvals.
To Start with;

Company Registration:
Register your business as a private, partner or proprietor firm. For this, you can take the help of a CA.

Liquor License:
Basis your restaurant concepts such as Fine Dine or Resto Bar etc, Apply for this license early as it takes a lot of time and effort for approval.

GST Registration:
Register your business for GST and get GSTIN Number. GST registration is specific to State, if you have outlets in different states then you’re required to take separate registrations.

Trade License:
Price Range Rs.5000 to Rs. 10000 for a small restaurant but incurred cost may go up to 1 lakh.

FSSAI (Food Safety and Standards Authority of India):
FSSAI license is required to operate a food business in India. Factors which are considered to acquire this license are Size of business, turnover, location etc. FSSAI license would cost you around Rs.10000.

Professional Tax license:
This license is required for employing salaried employees.

Management of Restaurant Business

• Restaurant Operations
• Defining Processes
• Use of Technology (Softwares) to automate the process with the least chances of errors.

Manage Employees

Your employees are the faces of your brand as they fight in front lines to keep the customers happy and they are the ones who work towards achieving the dreams of the Founder of a business.
It is crucial to monitor and invest in employees. Here are some of the key points in managing your staff:
• Employee shift management
• Performance measurements
• Employee Training
• Employee motivation
Above mentioned successful parameters can be hard to manage manually and on a daily basis, therefore, invest in Technology to improve the overall efficiency of employees.

• Manage Finances

Optimization of resources and maintaining cash flows are an extremely important and critical task in successfully running a business. Hence, the use of technology can help you optimize and monitor investments for various needs.

• Menu Management

Keeping yourself updated with latest trends in the menu or introducing add-ons to the menu along with their prices will help you retain customers as well as help you attract more audience.

• Vendors / Suppliers
Suppliers are the major contributor to the service levels in the restaurant business. Therefore it is mandatory to choose right partners than to choose partners who are not in sync with the parameters to the brand.

• Marketing
Rigorous online and offline marketing efforts are required to create a brand presence and also help in the brand recall to your existing client base. It is important to keep our customers engaged or connected with the brand.

• Customer Service
Great customer service is essential to your success. Pay genuine attention to your diners as satisfied customers create great value for your business model. Few of the points that will help you in better customer service are:
1. Etiquette Matters 2. Fix Problems Immediately 3. Use Customer Comment Cards 4.Incorporate Technology
Plan investment for improving the service levels which will also enable growth in business.

• Cloud-based Technology Software
It has been observed that restauranteur’s do not consider software as an integral part of the system rather they believe it is just for billing. However, Cloud-based Software helps you automate operations, instantly provides required business information, acts as automated support for customer service, marketing and even assists you in decision making for your business and operations.

Starting a restaurant may be overwhelming. Immense effort and endless amount of time go into crafting the right strategies for your restaurant. But your job doesn’t end once your restaurant has opened its doors. Learning how to sustain your restaurant plays an important part in the success of your restaurant!
Wish you Good Luck to kick start your business.

1 Comment

  1. Great article. Thank you so much for sharing good stuff with us. I enjoyed reading it.

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