How to Start Restaurant Business in India : A Complete Guide
To Start restaurant business can be a challenging task, especially in a country as diverse and dynamic as India. From sourcing the right ingredients and finding the perfect location to getting the right licenses and creating an appealing menu, there are a lot of things to consider when starting a restaurant business in India.
However, with proper planning, research, and preparation, starting a restaurant business in India can also be a rewarding experience. Whether you are looking to start a small cafe or a large upscale restaurant, this guide will provide you with the essential information you need to get started on your entrepreneurial journey.
Restaurant Industry in India:
The Indian restaurant industry sector is one of the fastest growing markets in the world. According to a survey by the National Restaurant Association of India (NRAI), the restaurant industry in India is predicted to grow at a compound annual growth rate of 9%. 5.99 lakh crore by 2022-23. Despite the constraints and problems restaurant owners have faced as a result of the COVID-19 pandemic, opening a restaurant will present new opportunities for aspiring restaurant owners.
In India, the restaurant industry is classified into various segments based on their menu offerings, prices, and target audience. Some of the popular segments include:
- Quick Service Restaurants (QSRs)
- Casual Dining Restaurants
- Fine Dining Restaurants
- Cafe and Bakeries
- Food Courts
- Home Delivery and Takeaway Services
The highest growing restaurant segments in India are casual dining, quick service restaurant, fine dining, and cafe. Apart from these the bar, pub, sports bar, lounges and clubs are also getting popular these days.
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Requirements to start restaurant business:
- Should have proper Space of minimum 800 sq. ft – 1000 Sq. ft
- Should have good understanding about Regional Taste & Market.
- Should have good skill of Management
- As per Menu, you have to arrange Chef, waiter, cleaner.
Note: First survey your area for taste
Choosing the Right Location:
The location of your restaurant is one of the most important factors that will determine the success of your business. Hence it is advised to visit the place at different times of the day to get an idea of the area, to understand the footfall and to determine the level of competition around. Here are some important points to keep in mind while selecting the location for your restaurant:
- Getting closer 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
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.
Some of the key factors to consider when conducting a feasibility study to start restaurant business in India include:
- Market demand for the type of restaurant you are planning 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
Deciding the menu of your restaurant is one of the most important thing of your business. A well designed menu that offers a unique and appealing range of dishes can help you stand out from the competition and attract customers. When designing the menu for your restaurant in India, it is important to consider the following factors:
- 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
It is also important to consider the dietary restrictions and preferences of your customers, such as vegetarian, vegan, gluten-free, and others
Documents & License Required:
To start restaurant business in India, you need to obtain the following documents and licenses:
- FSSAI (Food Safety and Standards Authority of India) License: This is a mandatory license that every food business operator must obtain. It ensures that the food being served is safe and of good quality.
- Trade license: A trade license is obtained from the local Municipal Corporation or Municipality. It is a permit to start a business in a particular location.
- Health trade license: This license is obtained from the local health department and certifies that the restaurant premises meet the required health and sanitation standards.
- Fire safety certificate: This certificate is obtained from the local fire department and ensures that the restaurant has adequate fire safety arrangements in place.
- GST (Goods and Services Tax) registration: If your restaurant’s turnover is above 20 lakhs or you want to sell through online then, it is mandatory to register for GST.
- Shop and Establishment Act registration: This registration is required to comply with the state-specific labor laws and regulations.
- Udhyam Registration.
- Kitchen Insurance (If required)*
Investment Required to Start Restaurant Business:
The investment required to start restaurant business in India can vary depending on several factors such as the type of restaurant, location, menu, and operating model. On average, starting a medium-sized restaurant can cost anywhere from INR 10-50 lakhs and up. This includes all expenses such as leasing a space, purchasing equipment and raw material, marketing, and staff salaries as I’ve mentioned in the table below:
|Name of Particulars
|Area Security Deposits for 800 sq ft (if rented)
|Space Area Rent (1st Month rent)
|Raw Material (Food Inventory, Ice-cream, Coldrinks & Mineral Water)
|Marketing & Promotions
|Human Resource Management
|Total Capital Required
Manpower Required to Start Restaurant Business:
|Number of Manpower
|Cook (As per cuisine, cook required)
|25,000 – 30,000 per cook
|3 & 4
|Sweeper (Part Time)
|Employer EPF & Contribution (If required)
|Lodging Facility (If cook is from outside)
Space Requirements to start restaurant business:
The space requirements to start restaurant business in India vary depending on the type and size of the restaurant. Here are some of the key considerations:
- Your restaurant should be in prime location and in highly populated area.
- The size of the restaurant will depend on the number of seats, kitchen and storage requirements, and other operational needs. On average, a medium-sized restaurant may require around 800 sq. ft. – 1,000 sq. ft. of space.
- The kitchen should be equipped with all the necessary appliances, equipment, and utensils for preparing and serving food. So, minimum 150sqft required.
- The dining area should have enough space (minimum 600 sq. ft.) for customers to comfortably sit and dine, with proper seating arrangements.
- Also must have adequate storage space for food and other supplies for a restaurant’s daily operations.
- Make sure there is enough parking space for customers which is important, especially if the restaurant is located in a busy area.
Restaurant Business Revenue Calculation:
- Total Table set with 4 Chair= 8 Nos.
- Total Customer seating capacity is = 32 nos.
- In whole Day 3 times full occupancy= 3 X 32
So, Total customer with full occupancy per day = 96 Customers
Now let see, Food Ticket Size of Per Customer Food Ticket size of per customer (Example)
- Panner Masala = Rs 180 (Full Plate)
- Butter Naan (40 per Naan) 2 ps = Rs 80
- Mineral Water (1 bottle) = Rs 20
Total Customer’s food Billing = Rs 280
As we know that, Total number of customers per day = 96 Nos.
- Revenue per day from Restaurant = Per Customer food ticket size X No. of Customer Revenue per day= 280 X 96 = 26,880 (Consider Rs 27,000)
- Revenue per day from Restaurant = Rs 27,000 (Sitting)
Now, we will talk about Revenue from Zomato & Swiggy (Online Orders)
- Online delivery food Order per day = 20 Customer of food ticket size Rs 250 Average online order per day= Rs 5000
Total Revenue from Restaurant per day= Offline + Online
Total Revenue per day from Restaurant= 27000 + 5000 = Rs 32000 /- Revenue per Month from Restaurant= Revenue per day X no. of days = 32000 x 30
Revenue per month from Restaurant = 9,60,000
Note: Birthday Parts & Events Booking is extra part of Revenue.
- Salary of Staff with all benefits = 1,92,000
- Electricity Bill= 10,000
- Cylinder Gas filling = 15,000
- Space Area rent = 40,000
- Raw Material= 1,00,000
- Diesel for DG set= 10000
- Miscellaneous = 10,000
Now lets calculate the total expenditure.
Total Expenditure per Months = 3,77,000 /-
Net Profit per month from Restaurant
= Total revenue – Monthly Expenditure
= 9,60,000 – 3,77,000
= Rs 5,83,000
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Steps to Start Restaurant Business in India:
Here are the some steps to start a restaurant business in India:
- Fisrt of all decide on the type of restaurant you want to open, the menu, and the target customer base.
- Analyze the local market to determine the demand the type of restaurant and identify your competitors.
- After that make a business plan for your restaurant business which include a detailed description of your restaurant concept, target market, and financial projections.
- Estimate the investment need to start restaurant business and consider options such as loans, investors, or crowdfunding(if required).
- Select a proper location that is accessible to your target customer base and has the necessary infrastructure for a restaurant.
- Obtain all necessary licenses and permits to start restaurant business, including food service and liquor licenses.
- Purchase all the equipment, hire staff, and set up the kitchen and dining area.
- Now its time to plan how you will promote your restaurant, such as through advertising, social media, or events.
- Then launch your restaurant with a grand opening ceremony and continue to monitor its performance to make adjustments as needed.
Starting a restaurant business in India can be a challenging but if you will run you business by taking some experience, choosing the right location, and designing a attractive menu, you can increase your chances of success in the competitive restaurant industry. It is important to have a strong marketing and branding strategy, a well-trained and motivated staff, and a commitment to providing exceptional customer service. BUt remember one thing that starting a restaurant business in India requires hard work and dedication, but with the right planning, preparation, and execution, you can turn your restaurant business into a successful business.
FAQ(Frequently Asked Question):
Q. What are the steps involved to start restaurant business in India ?
Ans: To start restaurant business in India you have to take some steps like Conduct market research, create a business plan, secure funding, choose a location, obtain necessary licenses and permits, and build a strong team.
Q. What type of restaurant should I open ?
Ans: If you want to start restaurant business then the type of restaurant depends on your budget, experience and your plan. Consider the type of cuisine you want to serve, your target market, and the concept you want to convey.
Q. What are the investment to start restaurant business in India?
Ans: The cost of starting a restaurant in India depends on various factors such as the size and location of your restaurant, the type of cuisine you want to serve, and the equipment and facilities you need. On an average, it is estimated that your minimum cost to start a restaurant in India could be as low as INR 5-10 Lakhs.
Q. What are the things to be kept in mind while choosing a place for a restaurant ?
Ans: When choosing a location for a restaurant, there are many things to consider, including accessibility, visibility, parking, and the local competition. It is also important to consider the city’s population, particularly the people’s ages and economic backgrounds.
Q. How can you design an attracting and unique menu for a restaurant?
Ans: When designing a menu for your restaurant, it is important to consider your target market, the type of cuisine you want to serve, and the availability of ingredients. It is also important to consider the pricing of your menu items and to offer a variety of options for different dietary requirements.
Q. How do I create a menu for my restaurant ?
Ans: First of all do a proper research on popular dishes and ingredients, as well as the tastes and preferences of your targeted customers. Consider the cost and availability of ingredients, and the labor and time required to prepare dishes. You can also test menu items with a focus group before launching your restaurant.
Q. How can I attract customers to my restaurant?
Ans: If you start restaurant business, then it is more important to attract more and more customers to your restaurant. So there are many ways to attract customers to your restaurant, such as advertising, social media marketing and word of mouth. Along with offering promotions and discounts, it is also important to provide excellent customer service to retain more customers and encourage repeat business.
Q. How do I train my staff and ensure excellent customer service?
Ans: To ensure excellent customer service, it is important to provide your staff with comprehensive training on the menu, service standards, and customer service techniques. You should also encourage your staff to be friendly and approachable, and to always put the customer first.
Q. How do I hire and train staff for a restaurant ?
Ans: Advertise job openings, conduct interviews, and check references to find the right staff. Provide training on restaurant policies, customer service, and food preparation to ensure consistent quality and efficiency.
Q. What are the key factors to ensure the success of my restaurant business ?
Ans: Offer high-quality food and exceptional customer service, maintain consistent operations, regularly review and adjust your menu, market effectively, and continuously strive to improve your business. Building a strong brand and creating a loyal customer base are also crucial for success.
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