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Know Everything About Starting And Managing A Restaurant Business In India

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Overview: Restaurant Business

Opening a restaurant is not only fascinating but a tedious task too. It can be damn interesting but at the same time, it can be time-consuming. Has an idea of opening a restaurant ever popped into your head? If you have ever dreamt of opening a restaurant, this article is especially for you. For some, it is equivalent to working on their passion, for few it becomes a good source of income. It is often said that the best you can do for yourself is by changing your passion into your career. Don’t worry, by the end of this article, you shall have the idea and motivation to channel your idea into reality. 

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Do you know, that the food industry contributes around 3% to the GDP of India? During the last five years ending 2019-20, the food processing industry sector has been growing at an average annual growth rate of around 11.18%.  Despite the hardships and challenges faced by the restaurant owners, opening a restaurant would bring several opportunities for budding restaurant owners. Wondering how to give a start to your business, this might help you.

Read Our Article: Thinks to Remember for a restaurant startup

Decide the Concept of Your Restaurant 

The concept of your restaurant is based on your food and the ambiance you want to give it. The ambiance plays a very important role in the success of any restaurant. The amount of effort, time, and money that you put into your business is directly proportionate to how successful it will be. 

Now you need to look at what you wish to pursue. Is it going to be? 

  • Casual Dining Restaurant 
  • Cafe 
  • Food carts
  • Fine Dining Restaurant 
  • Bakeries 

Once you decide on the concept, you must ponder the theme and cuisine of your restaurant.

Prepare a Business Plan

You should prepare a business plan. Here are a few options you can refer to:

Investments in Your Restaurant Business 

Planning to open a restaurant can be tedious and worrisome, especially in the case of investments. However, there are three ways to prepare your business and take it to the next level.

  • Self-Funding: If you have the money by yourself, congratulations half of your business plan is successful already. You can even opt for partnerships as it reduces your investment risks.
  • Loan: You can opt for a loan to fulfill your dream of opening a restaurant. However, getting a loan from a bank can be difficult as they look for collateral or someone who can underwrite the loan.
  • VC/ Angel Funding: Getting investors on the board can be difficult especially if it is a first-time venture. Investors usually look for a restaurant venture’s potential growth, quality, and scalability of business model. Your first few outlets will help someone to decide whether they wish to invest in your venture. 

While You Are Opening A Restaurant There Are Additional Costs Involved.

Below are the additional costs mentioned. 

  • Food Costs: It refers to the cost of all raw materials used to prepare a dish. It should be. 30% of your menu price should be food price. 
  • Labor Costs: It is the manpower you need to start and run the restaurant. 
  • Overhead Costs: These are the additional costs exclusive of food and labor costs. These include -
  1. Rent: Rent covers a major portion of your overall costs. However, it shouldn’t exceed 10% of your revenue. 
  2. Interiors: When it comes to interiors, you need to look for the concept, theme, and budget
  3. Kitchen Equipment:.Purchasing the right quality equipment may seem heavy on your pockets. In such a case, it is very important to know various types of essential equipment without which a successful restaurant can’t be run. 

POS

It refers to Point of Sale. The benefit of modern technology POS is that it can smoothen restaurant operations.  

Marketing

You should spend 1-2% of your revenues on marketing your restaurant because marketing helps people to remember and visit your restaurant again and again. Moreover, digital marketing can do wonders for your business. It is the best marketing strategy to have an edge over others in the market.

Location

Besides this, the second most important thing to consider is location. 

  • Assess Your Competitor: Identify your competitor in the area, and gauge their process and business model. Assess them in terms of their cuisine, and the type of dining experience they are offering to their customers - casual dining, fine dining, etc. 
  • Visibility and Accessibility: Upper floor locations are generally not a good idea because their visibility is low. Even for customers, it is difficult to locate. The restaurant must be in front of the road or on the ground floor.

NOC (No Objection Certificate)

NOC is mandatory for fire departments to follow the authority’s requirements. The government of India has taken measures to ensure that every building has a secure form of NOC from the fire and pollution department. Provisional fire NOC is granted by the fire department of the respective state and then the construction begins. Every commercial or residential building more than 12 meters should have NOC from the fire department before they start their business. Before granting the NOC, the authority carries out a proper inspection to ensure that the restaurant is following the rules related to fire safety. After verifying the restaurant, the fire department issues the required NOC. 

License

A license is essential and cannot be ignored. The fee of the license depends on what sort of establishment you have.

Before starting a restaurant, you need to acquire a few licenses from the government of India.

The cost of obtaining these licenses depends on the size of your venture. 

Here is a list of significant licenses required to open a restaurant business in India:

Trade license from the municipal corporation: Depending on the size of the restaurant, the cost would be from RS. 5000 to 10,000 for a small restaurant. For the financial year, the license is issued and is supposed to be renewed every year. 

  • FSSAI: The size of your venture, turnover, installed capacity, location, etc are factors involved in obtaining an FSSAI incense and cost around 5000 to 10000. There are three types of FSSAI licenses:
  1. FSSAI Registration: It is for very small businesses with less than 12 lakhs turnover annually.
  2. State Registration: It is for small restaurants to midsize restaurants with annual turnover between 12 lakhs to 20 lakhs.
  3. Central License: For big restaurants and food chains with more than 20 crores annual.  
  • Health Trade License: You can get a health trade license from the health department or municipal authorities. Usually, you have to wait for a maximum of 60 days after form submission. It is important to renew your license every year. 
  • Eating House License: Indian Law states, that any place that offers food and beverages for public consumption is an eating house. License is issued by the Licensing Police Commissioner of the particular city where the restaurant is located.

How can you get a license for your eating house?

  1. You can register yourself on the official website of the state police.
  2. Submit your documents next. 
  3. Visit the Additional Commissioner of police 
  • GST Registration: Restaurants are required to register under GST and they get their GSTIN Number. GST Registration is state-specific so if your restaurant has outlets in different states, you need to have specific registration for each state. 
  • Liquor License: For the Restaurant business you need a liquor license. It is tricky and expensive. You can consult us through our website for a liquor license.
  • Business Registration: You need to register your business as a partnership firm or private limited company. You need to file annual returns, audit your finances, etc. 

Hiring The Right People For The Right Job Is Another Big Challenge. 

Hiring the person with the right skills is very important.  As a first-time restaurant owner, you can follow the traditional manner: set up an advertisement in the newspaper, use words like “hiring” in newspapers, and also on social media.

The different types of staff required in a restaurant: 

  • Administrator: He works with an accountant as he has to manage the capital of the establishment and ensure its use. 
  • Kitchen Staff: The kitchen staff comprises chefs, cooks, and dishwashers. In the beginning, you’ll require three cooks - two full-time and one part-time.
  • Chef: He creates his culinary masterpieces to serve. There are varied types of chefs and their salaries depend on experience and training. They create a menu that all diners will love and ensure the efficiency of the kitchen team.
  • Service Staff: The waiters including the head waiter accommodate each dinner at their table, be attentive to the needs of dines, and are also in charge of training, and the housekeeping staff is all service staff. Since their interaction with customers is regular, they need to be educated as well as experienced.
  • Management Staff: Your restaurant’s manager, chef, cashier, etc comprise the staff. They can help with duties and manage the entire staff. They need to plan and organize. It is necessary for management to prioritize guest satisfaction.
  • Front-of-the-house staff: The face of the hotel is the front-of-house staff. They need to keep interacting with guests and make sure they have a great experience. Front staff including servers, bartenders, hosts, floor managers, front desk agents, and general managers are necessary for hotel operations.
  • Arrange suppliers and vendors for your restaurant: A healthy relationship with your supplier and vendor leads to the smooth functioning of your restaurant. 

Note:

  • Make sure you always have two days' worth of stock in case of emergency Circumstances
  • The items must be checked every morning every day. 
  • Both quantity and quality checks must be done before the time of closing the restaurant. 

Marketing and promoting are the most integral parts of building an identity

Once you build solid relationships with clients and offer a remarkable dining experience that will make you stand out from everyone in the market. 

Here are a few tips for creating the perfect marketing strategy for your restaurant. 

  • Create a brand identity 
  1. Brand identity is like your voice, character, and feelings you wish to arouse in your audiences. 
  2. It is a tool to extract the audience towards you and make yourselves more prominent in the market. 
  3. Understanding your target audience will also help you to choose a theme that works with all your personas. 
  • Build a website: According to a study, 22% of customers said that if someone didn’t have a website with a menu, they won't go to the place. 
  1. One should include images of your restaurant probably displaying food, busy outlet, and staff at work. Through this, potential customers can get a vibe.
  2. Now that you are all set, it’s time to present it to the world.
  3. Don’t be anxious and believe in yourself and the time that now you are all set to present it to the world.
  • Host a soft opening: A soft opening will help you to be aware of your flaws. Before you formally introduce everything and reveal your dishes, this can be like a quick exam that will help you to take feedback into account and make the required changes. Make sure with this, you get genuine feedback and you improve on the latter. It will help you to-
  1. Create a buzz 
  2. Fix your shortcomings 
  3. Review your menu 
  4. Observe demand 
  5. Create income for you 

If You Are Interested In Running A Small Food Business, Here Are A Few Tips: 

Start with a cloud kitchen

  • Once you get established in your region then use your funds to expand your business. 
  • Make sure you don’t over-invest in kitchen equipment. 
  • Look for something simple, useful, and handy.

Strategize expenses of your business

Do market research, speak to suppliers, and create a realistic budget.

Identify your customers 

Your location is a prime factor in considering your customers.

Use a professional logo design. 

The logo is a visual identity of a business and it conveys a brand message to target audiences. 

Be professional at your work

No equipment can make magic until you know how to cook well, Even if you hire the best staff, knowing things personally is always better. You must know how to purchase, prepare and preserve food. 

Design a Stellar Menu 

  • The menu should consist of items that can be prepared quickly and the ingredients are readily available.
  • The menu should be designed in a way that lures the customer to spend more time on it.
  • The cuisine that is supposed to be served must contain items based on the audience’s demands.

You should know how to execute a business

Now it’s time to work on food preferences i.e. continental, local, heritage food successful restaurants take inspiration from cultures and trends around. 

Conclusion 

In this article, we have spoken about all the important factors to be kept in mind when it comes to opening a restaurant. There are important factors affecting your business to be kept in mind, for example, budget, licensing, promotions, concept, and marketing of your own business. It is very important to be considered especially when you are starting a business for the first time. Your business can be small too, it is all about starting something new, being fascinated by the thought, and keep moving in the right direction by keeping an eye on all the factors considered above.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.

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Author
Bhavya Ahuja
I have over 3 years of experience working as a content writer . Currently, I work as a content writer at Corpseed ITES Private Limited, where my job role is providing the best content in the field of lifestyle and entertainment . I'm deeply passionate about creating an impact in the industry with my skills and knowledge

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