How to Start Restaurant Business in India? Step by step Guide

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India, A country where food is a great obsession has numerous kinds of cuisines & ample of food varieties to be served. If you are scrolling for an opportunity to raise the amount of bucks in your account just go with the everlasting & tasty business of our country. Here is a detailed write-up about How to Give a Kick Start to Restaurant Business in India.

Restaurant Business Market in India: 

74 % of Indian population are foodies and they don’t compromise their tastes hence we can say that India has a Great Demand for Food Varieties. Restaurant Business Industry is one of the fastest growing and wealth fetching industries in India. So don’t hesitate to take the decision to start your yummy business. Here are the steps to be followed for a Delicious Restaurant Start Up.

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 Starting up a Restaurant Business in Bharat: 

Each and Every business has a set of lines to be followed to taste success. Here are ours

  • Step 1: Conceptualize the theme & type of Your Restaurant
  • Step 2: Select a feasible location
  • Step 3: Analyze & evaluate the costs & capital required
  • Step 4: Acquire the Funds Required
  • Step 5: Get all the legal permissions required for a restaurant
  • Step 6: Gather the manpower needed
  • Step 7: Decide the Palatable menu
  • Step 8: For obtaining the Raw materials, vegetables etc get some vendors, suppliers etc
  • Step 9: Selecting the right technology to be installed in the restaurant is one of the leading steps.
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  1. Conceptualising The Theme & Type Of Restaurant:  Selecting the theme and type is the leading step for this business. India is known for its diversity, we have 29 different states and each state has its own traditional food and cuisine so we have a wide range of choices to choose the best which suits for us. We have diverse options in theme like a Pure Beg Eatery, Drive-In, Take-Away, Steakhouse, Barbeque, Noshery, Lunch-Counter etc. Selecting the theme and type decides the range of the business so this is the foremost decision to be taken with all the consciousness and brilliance. It also includes the evaluation of Average Price per Customer. The Theme & Type of Restaurant influences the APC on a high rate.

Tip: India is a country where people give more value to their family, friends and relations. So go on with a restaurant theme which can assist people to happily eat and enjoy with their loved ones. This helps you to increase your turnover drastically.

  • Selecting a Feasible Location:

Each and every space you find isn’t an ideal place for establishing a successful restaurant business. The point at which the restaurant is going to be established has a prominent role in the business. So selection of the location for the restaurant is to be done very carefully by analysing all the factors that affect the turnover. The area of the restaurant influences the type of visitors, their tastes and also the amount you invest.

Before you select a Location go through the following steps:

  • Know about each & every corner of the area.
  • Get knowledge about the existing restaurants and eateries in that area.
  • Compare their price and theme with your ideology.
  • Also assess the type of dining experience, cuisine & service they are providing.
  • Make a quick analysis about the customers, their tastes and average billing along with their Pocket-Size.
  • Find a feasible and economical spot for the Restaurant business.
  • Make sure there is adequate space for parking.
  • If you are leasing a pre-constructed building find a friendly landlord, check out the construction details like wiring, drainage, and fire exits etc., because safety matters a lot in public business.
  • Be choosy and don’t take impulsive decisions.
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Tip: Find a spot which is accessible and visible to the customers easily and try to grab a location which has well established landmarks near it.

Note: After selecting the location you should also get NOC (No Objection Certificate) from at least 3 of the neighbours.

By making a clear cut analysis you can go with your Food House in your chosen location.

  • Analysing & Evaluating the Costs & Capital Required: For setting up a restaurant you need good amount of capital to meet all the requirements. After finalising the theme, type & location you should work on the amount of capital required. Analyse the Average Price per Customer based on the type & theme. There are many significant costs that include in starting an eatery. Let’s look into detail.
  • Food Costs: The amount of money each dish you are providing depends upon the raw material you obtain. Raw materials cost up to 35-45% of the menu price for an ideal business. Food costs are inclusive of all the materials you utilize in preparing the dish.

There are some other costs which are exclusive of food costs. They are called as Overhead costs.

  • Rent: The location of the building and size of the building influences the rent of the building however the rent should exceed 10-15% of the total revenues. If you have your own building this can be excluded.
  • License: There are various kinds of licenses that are to be acquired before establishing the restaurant each type of eatery has different fee amount to be paid. This cost can’t be ignored because it’s the legal aid to be paid.
  • Interior: Based on the theme you selected you can design the interior in a spectacular and pleasing way this works needs good amount of money to be spent.
  • Furniture: According to the interior you should also get the required furniture for the restrau.This furniture and its cost will be according to the theme of restaurant.
  • Kitchen Equipment: This is the foremost requirement which needs high amount of capital because only with the right equipment you can perform well and deliver delicious food. Good quality equipment is to be installed for the long run though it seems very costly while installing.
  • Marketing: Every business needs a proper publicity in its seed stage. So you should also focus on the advertising & publicity of the business both online and offline. Digital marketing has become one the prominent source of advertising businesses so mouth publicity along with digital means can get you to high ends.

Including and analysing all these costs along with some negotiable costs fix the capital that is to be required for the establishment of you dream project.

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  • Acquiring the Funds: All of have different ideas and methodologies to succeed in life but most of us step back due to lack of capital. Most of our dreams doesn’t see this world and end up in our minds due to deficiency in investment. Setting up a Restaurant also needs a huge capital to start. There are different ways through which you can finance your project.
  • Independent funding: If you are self potential to fund your business, cuddos you’ve overcome the biggest obstacle in beginning your project. Starting the business with your own capital can help you from sinking into paying interests and debts.
  • Getting a Loan: This is a little tougher task to accomplish because any bank or any financier would ask for a surety that would act as collateral for your business to fund you. But to achieve and make your dreams come true you can go with a business loan.
  • Finding Investors: Finding someone to invest for your business is not a simple task but you can find some investors who can fund and give you a hand to fulfil your dream. People invest in your business only if you have a perfect business strategy and capability to get numbers from it.
  • Partnership: Working in partnership lowers the risk of losses and it helps in sharing the responsibility. It aids in sharing the amount required for the investment. You can start your business along with someone you trust and both of you can work together for the well growing of the firm. You can have diversity in ideas and methodology which can help you to succeed together.

By selecting any of these options you can gather the capital required for your restaurant and start your work for the future.

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  • Legal Permissions: Obtaining all the licenses and certifications from various authorities is the main and prime task to be accomplished while starting a business because this is the legalisation of the business. There are nearly 10 legal certifications you need to get for opening a restaurant legally. Let’s look into them in detail. They are:
  • FSSAI License: Food Safety and Standards Authority of India (FSSAI) is the prime authority which should give clearance on a restaurant one should obtain his food license from FSSAI to run his food house. It costs around 2,000 to 10,000/year depending upon the size of food house you are going with. They need some valid documents for the license approval.

Documents needed:

  • Address & Id proofs of owners
  • Kitchen Plan
  • Design of Venture
  • Valid Email & Phone Number
  • Types of Foods offered
  • Affidavit
  • NOC(from the landlord) etc

These are the documents needed for obtaining FSSAI certificate and it just take nearly 15 days for the approval. It’s a 14digit unique number provided by the authority.

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  • Trade License: A trade license is a legal certificate issued on a particular trade for the applicant by the local authority. It’s one of the most important document needed for starting up a restaurant or any other kind of business and the applicant is not permitted to perform trade on any other thing than the particular items certified. The trade license is valid only for one year and it should be renewed in March of every year. For restaurants it is issued by health department. The Municipal Health Corporation Act (1957) has the 11th schedule as Health Trade License. It also needs some specific documents for approval. They are:
  • Ownership proof, Rent Agreement
  • Layout & Site Plan
  • Indemnity bond for Rs. 100
  • Certificate about stability of the building from Structural Engineer
  • Bills from Power & Water Dept
  • Water Report
  • Fitness & Medical Certificates of Employees etc.,

These are some important documents required to acquire Health Trade License.

  • GST Registration: Goods and Service Tax has come into force in our country from 1st July 2017.Its an indirect tax levied on most of the goods and services used for domestic consumption in our country. It is necessary to get registered and pay GST for any business. They also need some of the proofs for registration. They are:
  • Passport Photos
  • Transfer memorandum from Landlord
  • Signatures from authorised persons
  • Copy of Pan & Aadhar card of Proprietor & all partners if exist
  • Copy of Partnership Agreement
  • Mail Ids and Phone Numbers for verification
  • Latest Bank Statements
  • List of Items prepared/supplied

These are the essential papers needed for GST registration.

Professional Tax License: You need to hire good amount of salary based staff for the restaurant so you should pay professional tax and obtain the license to hire professionals for your works to be done. This tax rates vary from state to state in our country. Both GST & Professional Tax along with Income Tax fall under tax registrations. Income Tax is also to be filled and registered for such big firms.

  • Liquor License: If you are conceiving the idea of a bar & restaurant you should definitely obtain the Liquor License which is expensive and little tricky. But liquor business has low labour costs and huge margin of profits so it’s a profitable idea to start it as the alcohol consumption in India is hiking day to day.

But one needs to get permit to supply alcohol even if he decides to provide it for free. The Licensing Act (2003) is applicable all over the country and any Indian citizen should abide by it. Excise department of the corresponding state is responsible for issuing the licenses.

Getting Liquor License for Your Restaurant is a Bit expensive but can earn good fruits for you. Things you’ve to do are:

  • Get to know about the rules & regulations of your respective state about liquor license.
  • Login to your state excise department website and provide them with the required information.
  • You should have the eligible age, clear personal record and should also provide your background details for verification.
  • You should choose a location which is far from schools, religious places, hospitals etc.
  • You should also get NOC from all the neighbours in the locality.
  • If this procedure is carried perfectly the state government will review your application and you’ll be asked to pay the prescribed amount for obtaining the License.
  • Music License: We Indians are great fans of heavenly music and we believe music can heel anything and can refresh our brains. People come to a restaurant to chill so music is an ineluctable thing here. Phonographic Performance Limited (PPL) issues the license required for playing music in any of the commercial or non-commercial places under copyright act of 1957.its a legal offense if you play music without proper permissions. It’s a very simple procedure to get music license for a restaurant. You just need:
  • Personal documents
  • GST registration certificate of restaurant
  • Type of music being played
  • Type of Business you are doing

You should fill the application in prescribed format and pay the prescribed amount to obtain Music License.

  • Environmental Clearance: Life exists on Earth jus because of the favourable environment we have so it’s each and everyone’s responsible to take care and not to harm the environment. Establishing a restaurant isn’t just satisfying all the legal certifications and public health but also should ensure proper environmental safety. So it’s prior to take Environmental Clearance and it’s not a tough job to get it.

You should get NOC from state regulators and it involves evaluating, scanning, screening of the project and the impacts on the environment to issue this certificate.

  • Business Registration: Registering your business and filing the returns is a compulsory legal procedure that is to be followed by each and every businessman. So it’s a prime responsibility to get the restaurant registered. It should be registered as a Private firm or a partnership firm.
  • Labour Law Registrations: If you have to hire more than 20 people in your restaurant then it’s mandatory, you have to acquire labour law registration.
  • Contract Labour Registration
  • Employee Provident Fund Registration
  • Employee State Insurance Registration are the things to be done while hiring more than 20 people for your start-up.

Each state of India has its own formalities and laws for Labour.

  • Infrastructure License: Besides the food, labour, safety and legal licenses you should also get permission for installing high capacity technology and equipment in your restaurant this is called as Infrastructure license which is a topping for the existing licenses but provides legal aid in the long run of the project. We might require installing boilers, generators, lifts and other cookery equipment with higher capacities for running a restaurant then we should go with this particular license.
  • Fire Department Clearance: You should not only focus on the taste of food we serve but also the safety of the customer is to be ensured so you should also acquire a clearance certificate from the fire department and also should install fire extinguishers and fire exits in case of any misfortunate events.
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These are the prime and frontline legal certifications to be acquired for peaceful and legalised run of a restaurant in India.

  • Hiring Efficient Professionals: Running a restaurant isn’t a simple task and it needs efficient team work to give impeccable service. Hiring isn’t just enough you should also find the excellent talent and maintain them for long. So one should recruit professionals for cooking, maintaining and hospitality. You should also please your customers with the appearance. Hence you should also employ some organisers who can give a fresh look for your eatery day to day. You can employ people by advertising in newspapers, posters etc., you can also use Social Media for promoting your business.

You need 3 types of staff for running a successful restaurant. They are:

  1. Kitchen Staff: Those you cook and prepare delicious food are termed as Kitchen Staff. They comprise of Cooks, Preparation staff and other helpers.
  2. Maintenance Staff: The managing department comprises of the Manager, Cashier, Chefs, and Receptionists etc they should be well educated and experienced ones to serve the cause.
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  • Service Staff: Waiters,Servers,Bellboys ,House keeping Staff come under Service Staff they offer service to the customers orders will be taken and served by them. They should be good at communication skills and need to be trained properly before employing them.

Tip: You can also recruit them by reference because it’s an easy task and quick one to access people through the existing contacts.

  • Designing & Deciding the Mouth Watering Menu: Controlling the appetite is one of the toughest tasks Indian can do. This is the key for your success. Designing a menu card which can jus create cravings jus by the looks is the most important thing. This can impact the amount a customer spends on the order. Decide the dishes which can be served and prepared with same kind of raw materials so that you need not invest more for raw materials. Here are some suggestions for making an eye catchy menu card and earn good amount.
  • Be choosy while deciding the recipes.
  • Supply the recipes which can be prepared in short time and with low price
  • Don’t give a vast description about new items rather describe them in short and simple lines
  • Always keep the menu updated.
  • Select an alluring design for the card so that it looks impressive
  • Try different dishes than the regular ones so that people will have a chance to taste something new.
  • Give knowledge about each and every recipe to the waiters so that they can explain about them to the customers.

Designing a palatable menu card can help you increase the APC so, be creative and updated while designing and deciding the items do be served.

  • Gathering the vendors, suppliers: Opening a restaurant and running it successfully not only needs a good and brilliant owner but also a perfect team. A restaurant can become successful only if you have good terms with people around you. Not just a single person can perform each and every task he needs lots of support from the employees and outsiders. The raw materials that are needed for preparation of food are supplied from various persons and each one have different prices and qualities so you should choose the most economic one and also should maintain another options in case of any emergencies.
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Vegetable Vendors, Dairy Suppliers, Groceries suppliers are the most important raw material providers for the restaurant so one should gather them and should have good relationship with them.

  • Installing the Right Technology: In the fast growing world, people love to have everything instantly. Each and every task is to be accomplished within seconds and the technology has grown so rapidly. Even for the restaurants and foods this is applicable. Using the perfect technical equipment like Owens, Vegetable Cutters, Steam Boilers, Brewers, etc can help increasing the foot falling into the restaurant. So be cautious and think economically while installing any trending technology in the food house as they are highly expensive but they are worth it.
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“Doing Workout for an hour in a day is easy but controlling the things you plate up in the remaining 23 hours is a tougher task” for Indian foodies. So satisfy your money craving with the food craving of people and India we have multiple varieties to serve people and satisfy their appetite.

These are the basic frontline steps to be followed to raise a restaurant. Food business is leading the chain so doesn’t worry about the bucks you spend on it, once you start and succeed the bar will rise to an unimaginable extent. Go on with the steps & enjoy the taste of success.

All the Best & Good Luck.

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