How to start Restaurant in India?
Starting a restaurant or coffee shop can be very fulfilling. However, these types of businesses can be difficult to maintain. About 30% of independent restaurants fail within the first year, although the longer you can stay in business, the less likely your restaurant is to collapse.
As with starting any business, you will need to take many things into consideration throughout the process of establishing your restaurant. Do you need a loan? How much money will you need? Where will the business be? How is it going to attract customers from other businesses like yours? These are some of the considerations that should help you gather your plans and begin to form them into a business.
Now, let us take a look at the 12 steps to start a restaurant successfully in India:
1. Decide the type of restaurant type and budget
Restaurants can be classified into various formats like fine dining, resto-bar, QSR, café, takeaway joints, and food carts. What format you are looking at and how much funds you can raise for your new venture are important questions to answer. Source of funding could be your own savings, or help from friends and family if the size of venture is small. However, for a bigger project, you can approach banks, non-banking financial institutions, venture capitalists or angel investors where you need a professional presentation to justify project feasibility.
2. Calculate startup cost (Setup and operational)
It is always better to make a business report that gives a clear picture of overheads you are going to encounter. Expenses involved to start a restaurant are renting a location, buying kitchen equipment, doing interiors, and setting up POS. License, food, electricity, gas, manpower, advertisement and marketing are other overheads you need to consider while making restaurant business plan.
3. Get all the licenses you need
To start a restaurant in India, you need many licenses from different departments. It may take some months or a year to get all licenses in place, so start the process early. FSSAI does food licensing and registration in India. Other licenses and formalities include GST registration, eating house license, liquor license, professional tax license, fire safety license, pollution control certificate, lift license (for eateries using elevators), music/video license, insurance, signage license etc.
4. Finding the right location
Choosing the right location is extremely important for restaurant success. Visibility, accessibility, and target customer base in the area are crucial factors to consider while looking for a place. Study the competition in the area; find out what kind of eateries are doing well. Eateries on ground floor tend to be more visible than upper floors. Make sure you have enough parking area around to avoid inconvenience to customers.
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5. Hire right people to help you success.
An experienced and ingenious master chef is the backbone of your restaurant that leads and trains others. Look for the right talent through references, newspaper ads, and hiring agencies. Other kitchen staffs include cooks and food preparation staff. Service staff including waiters, housekeeping, and busboys should be well-trained to face the customer. Besides that, you need a restaurant manager, store manager, and cashier.
6. Menu, logo, branding and interior design
Menu and logo design plays an important role in restaurant success and requires due diligence. For menu content, seek the help of chef in naming dishes. Include items that can be prepared easily with readily available ingredients. Price of dishes should be based on competition in the area. Approach a logo designer who can help you with menu design as well. Consider branding package for staff uniform, tableware, and paper napkins. Hire interior designer for restaurant theme along with furniture, seating arrangement, and lighting.
7. Find best food vendors
Have a tie-up with two to three food suppliers who are reliable and able to meet your food supply requirement. Even if you use one vendor, have a backup in place for contingencies. Your vendor must be a registered business with a TIN number. Do a daily quality and quantity check to ensure you are not deceived in any form. Make a legal agreement with the vendor for safeguarding your interests.
8. Invest in restaurant technology
POS (Point of Sale) systems form an integral part of restaurant business plan and in 2018 you just can’t function without them. There are many POS systems out there that help you to manage orders, billing, and delivery along with many other features. If you plan to run a loyalty program, use technology to connect it your POS. For advanced technology implementation, you can consider predictive order management software to forecast demand and minimize wastage. Restaurant management software can also be used to accept payment via smartphones, e-wallets etc. Please remember to factor in the cost of licensing POS tools and restaurant management software while you are estimating your investment budget.
9. Advertisement and marketing
Advertisement is essential when you start a restaurant to get your name out in the market. Distribute menu pamphlets, advertise in local papers. Use social media like Facebook and Instagram to promote your business. Have a website and write blogs. Blogs are very useful in spreading positive word of mouth. Hire writers or ask customers to write a blog post in exchange for a free meal. Do a tie-up with food delivery apps like FoodPanda, Zomato etc if you plan to deliver food in your area.
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10. Understand local tastes and culture
Another question you need to ask before starting a restaurant is if you understand the local culture well. It is important to understand what people want, what their food tastes are, and how denizens of a city prefer to eat out before owning a restaurant business. It doesn’t make a sense to start a steakhouse in Delhi NCR, where certain meat products may be banned. Similarly, getting alcohol licenses is improbable in a city like Ahmedabad. Understand the rules and regulations of each state before searching for best restaurant concepts.
11. Begin a social media campaign even before starting your restaurant
Do not underestimate the importance of social media, and the power it holds today over people. Even before you throw the doors of your restaurant or bar open, make sure that you run a social media campaign to get the word out there. It always helps to hire a digital marketing agency that specializes in creating buzz around a product that is yet to be launched. After all, your restaurant will be discussed on social media sites like Zomato, Facebook, Twitter, etc. It only makes sense to make optimum utilization of social tools if you are wondering how to open a restaurant in India.
12. Study successful restaurant concepts
Before you decide on a concept, consider search for best restaurant concepts that have been tried and tested in each city. Each city has a different vibe to it, and what works in one city will not work in another. Going through restaurant case studies will help you to decide on a concept that is better suited for your own venture. After all, a restaurant idea for business in India is no simple matter. It is as complex and diverse as the country is.
Run a successful restaurant business in India
Running a restaurant is a dream for many people. However, not many people are able to realize it considering the challenges posed by it. All you need is conviction, determination and adequate funds. Have a vision on how to expand. Understanding of food and palates is important.
Focus on learning more about food from your cooks. Get tricks of the trade from food suppliers. Don’t expect quick returns instead focus on serving the best food irrespective of your business size. Most importantly, follow this restaurant business guide to understand how to run a restaurant in India.
Article Credit: RanceLab