Opening a restaurant business is a tough task. Many people consider it a glamorous enterprise. There are many challenges in starting the business. The typical tasks include creating a great menu, finding the right combination of ingredients and the perfect location for setting up a restaurant.
It is not to suggest that it is not very hard to start. On the contrary, it is a wonderful business if there is excellent planning, preparation, and research. In this write-up, I am going to provide you with complete details for opening either a small café or a large upscale restaurant. Having relevant information is essential. After the covid 19, the on-demand food Delivery App business is the fastest-growing sector.
Before going ahead, I would like you to know a bit about me. Decidedly, it is imperative that you know the information is coming from my experience and expertise. After completing my MBA, I started working for one of the top 5 oxygen plant manufacturing companies in India.
Here I served for five years. Afterward, I joined of the top chain 10 restaurant chains in India. I got the job because of my background in food science plus my marketing experience of working for the O2 gas plant manufacturing company.
Restaurant Industry in India
Indian restaurant industry is generating robust growth and jobs. The industry surveys project that the restaurant industry will grow at a rate of 9%, which is amazing. Notwithstanding the COVID-19 difficulties, starting a restaurant business in India remains a lucrative option.
The restaurant industry in India is segmented into numerous categories depending upon the target customers, prices and menu offerings. Important categories:
- Quick Service Restaurants (QSRs)
- Casual Dining Restaurants
- Fine Dining Restaurants
- Cafe and Bakeries
- Food Courts
- Home Delivery and Takeaway Services
The fastest growing segments include fine dining, casual ding, quick service restaurant and café. Besides, pubs, sports bar, lounges and clubs are also getting popular.
Requirements to Start Restaurant Business
- Must have minimum space of 800 sq. ft. – 1000 Sq. ft.
- Excellent knowledge of regional cuisines and market
- High-quality management skills
- Arrangement of chef and other staff depending upon your menu
Note: It is desirable that you conduct a feasibility study to know local taste preferences.
Choosing the Right Location
Location is a very important point for any kind of business. So always choose the right location because the growth factor of your business. Perhaps, you should visit your intended location at a different times of the day. This will help you to get an excellent idea of the area as well as the prospective competition. Following are some of the important factors to keep in mind while looking for a restaurant location:
- Close to your target customers
- Accessibility and visibility of the location
- Availability of parking and public transportation
- Rent and operating costs
- Competitors in the area
- Availability of electricity, water, and other basic amenities
Conducting a Feasibility Study
For successful launch of restaurant business, you must do an authentic feasibility study. It is important that ensure the viability of your business. This will give you an intimate understanding of the market, competition in the area and the type of restaurant likely to succeed in the area.
First of all to start restaurant business in India, it is important to conduct a feasibility study to determine the viability of your business idea. This study will help you understand the demand for the type of restaurant you are planning to start, the competition in the market, and the cost of starting and running the business. Following are the important steps you must consider:
- Demand for restaurant you are looking to start
- Competition in the market
- Location of your restaurant
- Availability of raw materials and suppliers
- Capital requirements and funding options
- Operating costs and projected income
- Legal and regulatory requirements
Designing the Menu
For restaurants to succeed, it is imperative that you design an appealing menu for the customers. A well-crafted menu offers an eclectic range of delicious dishes. It will help you to stand out from your competitors and attract potential customers. However, you must consider the following factors while designing the menu:
- Type of cuisine you want to offer
- Target audience and their preferences
- Availability of ingredients and raw materials
- Menu pricing
- Seasonal offerings
- Food presentation and plating
Note: You must consider dietary preferences of customers including vegan, non-veg, gluten-free, etc.
Documents & License Required
For starting a restaurant in India, it is important that you get the following documents and licenses:
FSSAI (Food Safety and Standards Authority of India) License
It is imperative for all types of food businesses to obtain an FSSAI license to ensure quality of food served meets the standard requirements.
This type of license can obtain from the local Municipal Corporation of Municipality.It is important for starting a business in a particular location.
Health Trade License
Local health department issues health trade license to ensure that restaurant meets health and sanitary standards.
Fire Safety Certificate
Local fire department issues fire safety certificate after ascertaining that the restaurant has installed safety arrangements.
GST (Goods and Services Tax) Registration
It is imperative for every restaurant owner to register for GST if their turnover is over INR 20 lakhs or they want to serve food online.
Shop and Establishment Act registration
This registration is compulsory to ensure compliance with state-specific labor laws and regulations.
Investment Required to Start Restaurant Business
Investment for opening a restaurant business in India would depend on many factors including the location, restaurant type, menu, business model, etc. For starting a medium range restaurant it would cost you between INR 15-55 lakhs upwards. It covers all expenses including renting space, buying raw materials & equipment, marketing and staff salaries. No require nitrogen plant for restaurant business because refrigerator and HVAC system is enough.
Space Requirements to Start Restaurant Business
Space requirements for setting up restaurant vary according to the size and type. Following are the most important factors:
- Restaurant must be in a prime location.
- Medium sized restaurant needs space around 800 sq. ft. – 1,000 sq. ft. of space.
- Kitchen must be equipped with all necessary appliances, equipment, and utensils for preparing quality food.
- Dining area must have enough space so that customers could relax comfortably.
- There should be adequate space for food storage for daily requirements.
- Also required adequate parking space for customers.