“The best way to reach someone’s heart is through their stomach”. So if you are looking for how to open a restaurant in India, you are on the right path to reach your niche.
Steps to Open a Restaurant in India
1. Decide the Type of your Restaurant Business
Restaurants can be of various types, for example,
- Fine Dining
- Restaurant with Bars
- Quick-Service Restaurants
- Cafes
- Roof-Top
- Poolside Restaurants
- Pure-veg/Non-Veg Restaurant
- Vegan Restaurant
- Chinese Restaurant
- Cusine Special Restaurant
- Dhabas
- Theme Based (Retro, Forest, Vintage etc)
- Bistro
- Foodcourts
- Drive-in/Takeaway
The list is never-ending. As soon as you add a pinch of uniqueness, it becomes a different type. Also, this could be a way to attract people.
Therefore, the first step of an entrepreneur towards looking how to open a restaurant in India is to decide what type of restaurant he wants to open.
After that, make a business plan.
It should include the restaurant name, logo design, theme, interior design, investment, future planning and everything crucial.
2. Estimate and Manage Funds
Estimating the cost involved in starting a restaurant business is crucial. That is because only after assessing it the entrepreneur can do successful capital planning.
With this in mind, the entrepreneur may need to estimate the following costs for opening a restaurant:
- Food Cost
Food cost in the restaurant business is funding that the entrepreneur has to spend in buying raw materials like flour, pulses, rice, spices, meat, etc.
Generally, the food cost involved in making a dish is 30%-40% of the total cost of that dish.
- Fixed costs or Overheads
Fixed costs or overheads are those expenses that are different from raw material or labour costs.
Here is a list of some overheads:
- Transport Expenses: It may vary depending on the location and city. But an ideal fare should not exceed 10% of the total revenue of the restaurant.
- Interior of the Restaurant
- Kitchen Equipment: Purchasing kitchen equipment suitable for a restaurant can loosen the pocket of an entrepreneur.
- License and Company Registration Fees
- Marketing: It is also necessary for business. For this purpose, the entrepreneur running a restaurant needs to spend about 1%-5% of his total earnings in marketing.
- Hidden Expenses
Some restaurant businesses fail to survive because they require more investment than the potential of the entrepreneur.
Hence managing funds and investment is an essential factor for opening a restaurant.
Also, it is crucial to arrange the investments for almost two years until the business starts generating profits.
Although, it can be difficult to get investors for funding in the initial phase.
However, if you have a potential business plan for the restaurant business, you can look for Venture Capital or Angel Investor.
3. Select Location for Your Restaurant
When looking for how to open a restaurant in India, choosing a location for business is very complex.
While choosing a spot, analyse your competitors in the area. Judge the progress of the competitor and understand their business model.
Identify what type of food the competitors are providing to their customers, like fine dining, casual, etc.
That will help you understand the customer base, for example, their spending capacity, preferences, favourite food, etc.
Keep in mind that for the restaurant business, it is essential to choose a location where customers can easily see and reach.
Generally, the ground floor is suitable for the restaurant.
Apart from this, the location should be where the immediate neighbours do not hesitate to give the No Objection Certificate as it may be required for starting the business.
4. Get License and Permission for Restaurant Business
You may need to obtain the following license to open a restaurant in India:
- Trade License: Acquiring this license depends on the state. Confirm this from the local municipal authority. Also, the fee is around five to ten thousand rupees. This license is valid for one year.
- FSSAI License: The entrepreneur also needs to get a food license from the food safety authority. You can also apply online for this.
- GST registration
- TAN & Professional Tax: The entrepreneur may also need this for deducting tax of his employees.
- Liquor License (Optional): If you want to arrange a bar in a restaurant, you will also need a liquor license. Since it takes some time to get it, you should apply for it well in advance.
- Company Registration: You can register your business under Proprietorship, Partnership, Private Limited Company, One Person Company etc.
- Udyog Aadhaar/MSME
- Fire safety License and Pollution License
- Music License
- Trademark Registration: While registering for the trademark of your logo and company name to protect your brand identity, it is crucial to know the food trademark class. It will help you with registering it without any objection, opposition or rejection.
5. Hire Employees
Hiring the right talent and retaining them for a long time is a huge challenge in the restaurant business.
You can either hire by referral from close relatives and family members.
Also, in the initial phase, you can recruit the employees through traditional methods. For example, you can call the candidates for an interview by advertising in the local newspaper, advertising on Facebook and LinkedIn.
For the restaurant business, you mainly need three kinds of staff which are as follows.
The kitchen staff:
- Cook
- Food preparation Staff
- Assistants/Interns
- Unskilled Labour for Cleaning and other stuff
The service staff:
- Waiters
- Housekeeping staff
- Security
Management Staff:
- Restaurant Manager
- HR Manager
- Cashier
- Receptionist
- Other staff they have to look after the overall management.
6. Identify Vendors and Suppliers for Your Business
A good business relationship with vendors and suppliers is essential for the success of the restaurant business.
You should have at least two to three vendors options.
It will help to compare the prices. Also, if there is some problem with one, you can use the other as a backup.
Above all, it is advisable to prefer local suppliers for removing extra logistic expenses. Also, it will benefit in the emergency stock end situation.
7. Design Menu for Restaurant Business
Design a menu according to the theme. You can use several online software for designing the menu.
Include items in the menu that can quickly be provided. Also, the ingredients used to make them are available and easy to store.
Focus on menu items that are prepared from ingredients preferred by the customers in your city.
Design it in a way that encourages the customer to spend more. For this purpose, you can take the help of an expert.
Also, include a column as CHEF’S SPECIAL that has the famous items of your kitchen. It could help customers who are unable to decide or prefer something special.
That’s it!
GRAND OPENING
After all the above tasks are fulfilled step by step, you can now open your restaurant on a good day and plan a grand event.
You can also offer some discounts or an extra dish at the opening.
Also, you can have any of the following events on the opening to attract customers and make people aware of your restaurant.
- Live Music Band
- Match Screening
- Poetry Night
- Contests
- Alcohol Tasting (if opening a restaurant with bar)
- Gigs
- Pool Party (if you have a pool)
- Folk Music Day/Night
- Exhibition
You can always come up with something new by brainstorming.
Although if seen, successfully running a restaurant is a very challenging task. But still, the idea of opening a restaurant in India is an excellent idea. I hope we have answered your question about how to open a restaurant in India. We wish you all luck for success.
Author Name
Geeteshree Singh Panwar
