So, you’re thinking about opening a restaurant in India or may have already made up your mind to do so. It’s an exciting step you’re taking! But there are so many things to plan out and do first—especially in the wake of COVID-19—and it’s crucial to know exactly what you’re getting into. To help you start getting organised, we’ve developed this step-by-step guide on how to open a food business in India.
#1 Make a detailed plan
Before taking any action to open your own restaurant, it’s important to have a clear plan that covers all of your business essentials. Being successful in the F&B industry (or in any new business endeavour) is challenging, so being focused and detailed with your plan is the best way to stay on track. Your plan should detail key areas like:
2. Fiscal projections
4. Business branding
5. Marketing strategies
7. Employees and hiring policies
8. Standards and compliance
Don’t rush through this step—make sure each section is as detailed as possible with clear directions. Any ambiguity or misstep in any of these areas could have damaging effects on your food business.
#2 Secure enough capital
One thing is clear: you need money to open and operate a restaurant. Making sure that you have adequate funding in place is fundamental for getting your food business off the ground.
From a fiscal perspective, this is what you need to figure out when opening a restaurant in India:
1. The total cost of starting and operating your type of restaurant.
2. The detailed breakdown of all the costs—know the amount of money you need to pay for staff, rent, supplies, ingredients etc.
3. How you will secure the necessary capital—bank loans, self-funding, angel investors, VC etc.
The type of restaurant you wish to have in India will affect how much capital you need. For instance, the startup cost to open a ghost kitchen, also known as CloudKitchens® delivery kitchen through KitchenPlus in India is ₹10 lakhs while the startup cost for a traditional restaurant is about ₹2.5 Crore.
#3 Register your company
You must register your company in India before you start doing business. You can complete the registration process online which requires the following:
- Choose your business structure—a One Person Company, Limited Liability Partnership, Private Limited Company, or Public Limited Company.
- Choose a company name.
- Have proof of identification and address of all the company’s directors and shareholders, and a registered office address in India.
- Have a Digital Signature Certificate: digital signatures are required to file the necessary forms on the Ministry of Corporate Affairs (MCA) portal.
- Secure a Director Identification Number: this is an ID number for a director that includes their name and address proof.
- Fill and submit forms on the MCA portal.
After you’ve completed the steps and submitted the digital forms with all the mandated documents, the Registrar of Companies will examine and verify the application and issue the company’s Certificate of Incorporation.
#4 Find your location
Ask any food business owner and they’ll tell you that having the right location is critical for success. For restaurants, location alone can make or break a business. When searching for your ideal location, keep the following things in mind:
- Which neighbourhood or zone has the most potential for your type of restaurant?
- Who are you targeting as your ideal customer? What is the segment you are trying to sell to?
- How many competitors have already set up restaurants or food delivery in that area?
Business owners who decide to open a CloudKitchens® delivery kitchen don’t need to make these decisions themselves. Location research is conducted by CloudKitchens® providers like KitchenPlus and they offer locations that are vetted ahead of time to meet population and business criteria.
Saving time in this crucial step means that CloudKitchens® owners typically can get their food business up and running quicker.
#5 Hire the right staff
You may have heard the saying that a business is only as good as its employees. Considering that you rely on your employees to service clients and deliver on the promise of great food, this is very true for restaurants. Also, staffing makes up a major portion of your monthly operational costs, so choosing the right employees is something you need to take seriously. While considering staffing-related issues, ask yourself questions like:
- How many staff members do you need?
- What positions are essential to run your food business efficiently?
- What will your training processes and policies be?
Staffing is another area that’s less complicated for CloudKitchens® delivery kitchen, as they typically need a much smaller team to deliver their service. Traditional restaurants in India typically require a team of over 25 people, whereas a delivery-only kitchen consists of 4-5 core people. Smaller teams mean lower costs and less stress.
#6 Make the final preparations
All the steps so far get you much closer to being ready to open your food business. But there are several important steps left before you’re ready to be fully up and running:
- Insurance—no business (much less a restaurant) can afford to take on any unexpected liability. Having adequate insurance coverage is imperative.
- Renovations—even if you’ve found the perfect location, there are most likely many things to be done to make it fit your restaurant type and style. Renovations take time and money, so be sure to factor all that in before opening your doors.
- Equipment —you’ll need the right equipment if you expect to deliver quality food to your customers. Make sure your food business is fully-equipped with everything you need to store, cook, prepare and serve all the items on your menu.
- Suppliers—have your best suppliers lined up well in advance. Without trustworthy and timely access to the ingredients you need, your restaurant won’t get too far.
- Licenses—running a restaurant in India requires having many licenses, including:
- Food License—obtained from the FSSAI (Food Safety and Standard Authority of India), this license confirms that a restaurant aligns with India’s food safety standards
- Liquor License—if you want to make liquor available at your restaurant, you must obtain a license from the Local Excise Commissioner
- Health/Trade License—ensures that your food business clears any health concerns of the Health Department
- Eating House License—obtained from the Licensing Police Commissioner of the city where the business is located
- Shop and Establishment License—proves your establishment is registered under India’s Shop and Establishment Act
- Fire Safety License—obtained from the local fire department
- Music License—to play music of any kind at your restaurant, you need a license issued by Phonographic Performance Limited (PPL)
- Signage License—you need legal permission to display signs, posters, etc. to market your restaurant in the area. For this license, you need to submit an application to your local Municipal body.
Again, CloudKitchens® owners benefit from having their facility operators handle all of these logistics for them—which is a huge plus in terms of time, money and stress.
#7 Have strong marketing
F&B businesses are one of the fastest-growing in India and competition gets tougher every day. That’s why marketing is so crucial, as it’s the only way to stand out from the crowd and survive against your competitors. To make your mark, you’ll want to incorporate best-performing marketing techniques like:
- Have an optimal website—most customers find restaurants via search, so you must have a website that’s attractive, user-friendly, and prominently displays your menu.
- Do online marketing—in addition to regularly optimising your website, you need to attract and engage customers on social media, via mobile apps, etc.
- Include offline marketing—advertise your menu and specials locally with flyers, pamphlets, ad boards, etc.
- Plan a soft launch—let customers know you’re open for business by offering promotions, special events, food sampling, etc.
All businesses need marketing in today’s day and age in order to get customers and grow. Expansion and sales opportunities happen quicker with delivery-only kitchens because they are already in prime locations better suited to attract customers, which is another advantage they have over traditional restaurants in terms of making a profit.
Start your food business today
You can now consider yourself up to date on what you need to know about opening a restaurant in India. If you decide that becoming a CloudKitchens® delivery kitchen owner is the best way for you to kickstart your food business, fill in the form below to get in contact with us!