How To Start Small Restaurant Business in India?

Last Updated on March 31, 2022 by My Rasoi

The food industry as a small restaurant business in India is growing at a rapid rate. More and more, people are opening their own restaurants. Many of these restaurants may not be much more than a table and a chair. Others may provide a huge menu. Many of these restaurants are small operations, catering for a family or a group of friends.

Your business can soar high if you are able to manage the restaurant in a proper way. So, if you’re planning to start a small restaurant business in India, must follow the blog till the end. Thus, it will be an utmost guide to help people start a successful venture.

Estimating the Expenditure in Opening a Small Restaurant Business in India

Starting a small restaurant business in India involves deciding on a concept to work with. Before deciding on a concept, there are many things to consider. The most important one is the amount of capital available. You can estimate the amount of money that a customer is likely to spend. So, you can calculate on average at your restaurant by looking at the Average Price per Customer (APC). Go through the below pointers to know more.

1. Cost of food: All the raw materials used to prepare a dish include the food cost. Food costs should be around 30% of the menu price. So, you should select the vendors for sourcing raw materials beforehand. Thus, this will ensure the smooth stock of raw materials.
   
2. Cost of labor: The second most important restaurant outlay is labor. This cost adds up to the spending when opening a restaurant.
   
3. Equipment for the kitchen: Purchasing quality equipment can be costly. But they always pay for themselves in the long run. Thus, investing in equipment that will help run the business is as important.
   
4. License cost: Restaurant licenses are a chief expense of your restaurant. So, based on your establishment type, the license fee varies.
   
5. Marketing cost: Marketing your restaurant should consume between 1-2% of your revenues. So, both offline and online marketing should combine to achieve the best results. So, your restaurant can enjoy word-of-mouth marketing as well as digital marketing.

Procedure And Documents To Start A Small Restaurant Business in India

If you want to open a restaurant business in India, you’ll need to get the proper licenses from the government. Your venture’s size determines the cost of obtaining these licenses. Obtaining the grants early is advisable, since they may take a long time to process.

The following is a list of the important licenses required to open a restaurant business in India:

1. FSSAI License: A food business must be licensed by the Food Safety and Standards Authority of India (FSSAI). An FSSAI license costs approximately ₹5000 to ₹10000 depending on your turnover, etc.
   
2. Trade License: You can get this by the municipal corporation. The cost incurred depends on the size of the restaurant. Small restaurants, but, pay between ₹5000 and ₹10,000 rupees for their license. Each license is valid for one year and people renew in March every year.
   
3. GST Registration: A GSTIN number is required of all restaurants in order to register under GST. So, GST registration is state-specific. And, if your restaurant has outlets in different states, you’ll need a separate registration for each.
   
4. Liquor License: A liquor license is essential if you serve liquor in your restaurant. You can get them from the local excise commissioner. And, the forms are available on their own state government websites. Without this license, you can incur a large penalty. Also, chances will be to close the business if you intend to sell liquor.
   
5. Business Registration: Your business must be registered as a union firm or a private limited company. You will then file for annual returns, financial audits, etc. Also, you can hire a CA for managing the finance of your business. 

Focus On A Good Menu Design 

The next step to starting a restaurant is making a menu. Menu design can have a significant impact on your restaurant’s food costs.   A menu can double as a sales and marketing tool for the foodservice operation.

You should offer items that are easy to prepare and that use local or available ingredients. To reduce your food costs and waste, it is advisable to serve similar dishes. This will ease the reduction of food waste.

Moreover, the menu needs to be designed so that customers are lured to spend more. Thus, choosing a cuisine and selecting menu items according to what your audience wants is a good idea.

Associate with Online Food Aggregators 

Join your restaurant for online food services will prove gainful. You can get exposure by listing with food aggregators like Swiggy, Zomato, etc.

These platforms also run funded campaigns to increase the visibility of your outlet. To preserve the taste of food, invest in quality packaging.

Equip Your Restaurant With Latest Technology

Technology plays an overlooked yet the main role in the management of a restaurant. Installing a digital menu for your restaurant will ease managing your business. And will also bring customers. For food businesses, My Rasoi can help you build a beautiful digital menu.

The India Digital Signage Market size will grow at a CAGR of 15.1% during 2019–25. Increasing demand for digital promotions of products and services handles the market growth. In the years following COVID, dinner outings increased from 55% to 63%.

Conclusion 

Having a restaurant of your own is an excellent idea. It is, yet, a colossal task to start a restaurant from scratch and run it. We hope you found this article informative. This article will assist you in opening a business in no time.