How to start a cafe in Mumbai?

. 6 min read
How to start a cafe in Mumbai?

A Megacity like Mumbai does not have a dearth of restaurants and cafes. And if you are a budding entrepreneur who wants to start a cafe in Mumbai and wants to know how to open a cafe, then you have to be unique for standing out in the crowd. Mumbai is currently overwhelmed with a series of cafe chains that not only includes the top cafe brands like CCD or Cafe Coffee Day, Starbucks, Barista Lavazza, Costa Coffee, and so on; but several other local cafes display an amazing theme and could be found in various corners of the city.

The “Mumbaikars” are extremely fond of food and due to their busy lifestyle, they prefer having food from the nearby cafes and restaurants or ordering it online rather than preparing it on their own after a stressful, tiring day. That is the reason why the restaurant ecosystem in Mumbai is always under the common people's budget and is financially running well due to their extraordinary menu, budget, theme, and, most importantly, location.

How to open a cafe in Mumbai?

If you want to know how to start a cafe in Mumbai, then you need to follow a few strategies. Here are some of the steps that you can follow if you wish to initiate a cafe launch in Mumbai:

1. Plan your cafe concept first

The very first thing that you need to do is come up with new business ideas and concepts for your cafe. A restaurant without a particular concept won't be a successful one. The average price of a customer provides you a fair idea about the average amount that a common customer would pay in your restaurant.

Once you have decided on the concept, start thinking about the type of cuisine or theme that you would like to incorporate in your cafe. Remember, whatever theme you are planning for your cafe should be synced with the interiors. Also, you can take to a particular niche or can offer a mixture of various cuisines. It is up to you and your culinary team what kind of cuisine they would be able to handle and prepare daily.

Dice with word FUNDS and coins on wooden background

2. Get funds for your business

The next important step is to get finance for your business. If you already have a good amount of capital in your hand, then you are good to go. Still, you would be requiring additional capital in case you have to spend extra or in emergency cases. If you are falling short of budget for funding your cafe business, you can raise money for your dream cafe through a loan or else from angel investors who are interested in your startup. Also, the expenditure of your cafe mainly depends on its concept or theme.

There are several things to be considered when it comes to collecting funds for your business, like providing salaries to your employees, chefs, building a theme-based restaurant, and the expenditure on various food products. Currently, most of the small businesses in Mumbai run through loans from various financial institutions or through Angel investors who look for your cafe venture's growth potential and scalability of your cafe’s business model.

3. Cost estimation

The cost estimation factor is something that you need to brainstorm before you plan to start a cafe. You need to evaluate all the costs that would be involved in running a cafe shop. The food cost, for example, is the first and foremost thing that you should consider while opening your Cafe business. This could include the cost of all the raw materials that we use for dish preparation. It should be ideal around 30% of the particular menu. Next, you need to finalise the vendors who can provide all the raw materials for ensuring a smoother supply of stock.

The next big thing is the labor cost and the manpower that is required to run your business. And the last decisive cost estimation factor is the overhead cost. This includes daily rent, interior designing expenditure, license, kitchen equipment and tools, PoS technology, and marketing (including offline and digital marketing). All these expenses would incur a huge cost for initiating your cafe business.

4. Choose a buzzing location

Location is a crucial factor to consider when it comes to initiating a small business. This is another major factor that determines your restaurant or cafe's success. First of all, you need to keep in mind the population of that area, your competitors, the type of people and their income scale, and so on. You will have competitions around but for making your business a successful one you also need to come up with other business strategies so that you can perform and provide services better to your customers. Assess your nearby competitors by the type of dining experience they are offering, along with the prices. All of these factors will help you to understand if you can open a cafe in your chosen area.

5. Get hold of your license

For running any type of business, you would require a license from the government. Depending on the size of your cafe venture, the cost for obtaining the license would vary. It is always advisable to get your permit earlier as it takes quite a lot of time for approval. Here are some of the licenses that you would need to require for opening a cafe business:

  • Get the trade license from Mumbai Municipal Corporation. Depending on the type of your business, the cost would vary from Rs 10000 to 100000.
  • Next, you need to get the FSSAI or the Food Safety and Standards Authority of India. This would cost you around 5,000 to 10000 rupees.
  • You would require a professional tax license if you are employing salaried staff. This would be payable on behalf of all the restaurant or Cafe employees who are earning more than Rs10000.
  • Every small business in Mumbai should get registered under GST. Once your business gets registered, you will be getting your GSTIN number.
  • The next license is obtaining a pretty expensive liquor license. The Liquor license takes a lot of time, and it is always advisable to apply for it early.
  • The last step is to get your business registered as a private limited company or a partnership firm. For that, you will need to file the annual returns and keep auditing your finances.

6. Recruit cafe staff

For a business like a restaurant or Cafe, you would be requiring the right manpower. Being a first-time restaurateur, you need to go for traditionally hiring staff; for example, print media. You would be requiring kitchen staff, service staff, and management staff. Also, it would be better if you can hire experienced employees so that they can help you run a proper business. You can use apps like OkStaff for staff management.

coffee shop interior daytime with wooden design counter red brick wall in background

7. Design a menu

Before you design a menu card, you need to first decide the type of food that you would be offering. Most importantly, your menu should include items that you can prepare quickly and are readily available in the nearby market. Design your menu in such a manner so that it entices or lures the customer to try out and spend more.

8. Digitise your business

Technology plays an important role in the success of any business. Once you are done setting up your business, plan to automate it as well. For instance, in this current situation, you won't be having many people coming up to your restaurant physically. They would rather prefer an online food delivery from your restaurant. Therefore, get your business digitised by merging with the top food delivery businesses through the “Aggregator model”. You must keep the payment system easier so that the customer can maintain easy and hassle-free cashless payments both online and offline.

Also Read:

1) How to Open a Cafe in Delhi?
2) How to start a book house?
3) How to Start Event Planning Services?
4) How to Start Cooking Classes at Home?

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Q. How do I market my cafe business?

Ans. You can either do it through print media or announcing it on social media. Both are equally effective.

Q. What is the cost of opening a cafe in Mumbai?

Ans. The cost would mainly depend on the location, type of customers, type of food, and other factors.

Q. What can I sell in my cafe?

Ans. Always go for selling handy and sustainable food items like sandwiches, cakes, croissants, wraps, yogurts, ice cream, coffee, tea. Rest depends on your creativity and ideas.