How to start a food chain business in India?

Investment, Tips, Steps & more

Owning a food chain is one of the most profitable businesses in India despite the risks and challenges associated with it. According to a market study conducted by the National Restaurant Association of India, the Indian restaurant and food chain market is growing and expected to touch the INR 5.99 lakh crore mark by 2023. It makes the restaurant business a very lucrative career option for entrepreneurs and food-lovers. You must be aware that there are multiple food shops and restaurants available in almost all neighbourhoods of our cities, even with many of them being within walking distance of 5 minutes.

The substantial growth rate of the restaurant industry is attributed to the growth of the population and people having more disposable income in their hands. The food prices are very competitive as they want to attract new customers as well as retain the existing ones. Even though the Indian economy is passing through inflation every year, the restaurant market continues to expand its operation as new restaurant chains are emerging from different parts of India. Even the premier restaurant chains that focus on providing high-quality and hygienic food at higher rates are filled with customers. They use automation softwares like OKCredit to manage their finance books. Due to higher disposable income and rapid urbanisation, people are learning to spend quality time with their families and friends, and restaurants are a major attraction to it.

With such a huge opportunity in the Indian F&B market, you can also start your small food chain business in India. Suppose you have a question of how to start a food chain business in India. In that case, we provide you with some tips related to the food chain business plan and how to market it well.

1. Finalise the concept: Before starting a food business, you need to decide which restaurant will be based on. One such metric is the average price per customer that gives us an idea of the average amount that any customer will spend in the restaurant. Once it is decided, you need to frame a theme and cuisine of the restaurant. The theme helps you in syncing the environment to it. the interior design, the menu designs and the serving trays should be aligned with the restaurant theme. Once these things are finalised, you can start with your business plan for the restaurant that will help you in projecting your business with future goals and missions.

2. Investment approach: The next part is to get the investment to start your business. It is a necessary step because without it the business will not start. You need a working capital to fund the business and get goods and machines necessary for the running. In India, people get investment through various steps as mentioned below.

3. VC/ Angel Funding: This is given by people who have a huge pool of money or collectively invest in businesses. To get the funding from here, you need to show them a business plan and prove to them that this business will be successful. Until you don’t satisfy them that this business will bring return in coming years, it would be hard to get their funding.

4. Loan/ Debt: It is a common type of funding where you can approach any bank or institution for getting credit that you promise to pay after a certain time with an interest. Many banks give loans to entrepreneurs to start their business at a good interest rate.

5. Self-funding: It is the safest and hassle-free method to fund your business. You take your own money and put it into the business making it complete under your control business. But you need to make sure that the business idea runs well so you can get a return of your investment.

6. Evaluate all costs: Before starting the building process, make sure to lay out a plan of all the costs that would be involved with this business. There are many types of costs in the food chain business that you will have to bear. They are explained below.

7. Food costs: The cost of raw materials that would be used for preparing the dishes in your restaurant. Generally, restaurant owners keep the food price at 30% of the menu cost.

8. Labour costs: It is the expense of the persons who would be preparing the dishes as you will need manpower to run the business. Not just the cooks, there can be another form of labour costs too like security, delivery and more.

9. Overhead costs: These are the additional costs other than the fixed costs and are as follows: electricity, rent, water bills, license, POS, technology costs.

10. Decide location: Location is an important factor as the nearer the shop is to the crowd, the more customers you get. It is necessary to put down your shop in an accessible part of the city and in a populous place. It should be seen from a distance and should be clean for people.

11. Get the mandatory licenses: Before starting a business, you need to procure the necessary licenses given to India's food businesses. It is also important to get an NOC from your neighbours so that you can legally work well in that place. The licenses are of different types like trade license, FSSAI license, GST registration, professional tax license, liquor registration, business registration and more. You can take the help of a CA or any financial firm to get your licensing done in India.

12. Hire the manpower: After all is set, you can start hiring the manpower required for your business. They will include the chefs, waiters, security, delivery person, management and more. You can publish an advertisement or take the help of the online hiring software to get the desired candidate.

13. Graphics/ menu & website: After all is set, you can start with the marketing part by making flashy menus and eye-catching graphics. These can be published in the newspapers and online mediums like your website and social media handles. The menu should be designed to attract the customers and make them order your best dish.

14. Arrange the vendors: Vendors are responsible for providing you the raw materials on a daily basis. These raw materials would be used to make your food and hence you should always try to get 3-4 vendors as in emergency conditions some vendors may not supply. It also tests your relationship forming strategy with the suppliers and vendors. Try to inculcate a good relationship with your vendors and customers.

15. Install technology: Use technology and leverage the huge amount of online audiences to grow your business. You can make a restaurant application where people can order directly or partnered with third-party apps. With more robust technology now in place, it becomes essential that you don’t get left behind. Use technology in the best way and see your business grow.

Conclusion

Food chain business is one of the hot new business ideas that comes to our mind when we think of a profitable business. It can be started with a business plan that covers all the basics of location, financing methods, discounts, food items, workers and time parameters. You can even automatise the financial calculations via software like OKCredit that provides a hassle-free financial management experience.

Also Read:

1) How to Start an Organic Food Business?
2) How to Start an Online Plant Business?
3) How to Start a Food Business in Mumbai?
4) How To Start a Borewell Business?

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FAQs

Q. What are some unique business ideas in India?

Ans. Some of India's unique and proven business ideas are opening a food chain business, trying for grocery or retail business, manufacturing some products, and selling them in the market. There are some best businesses to start in India.

Q. What are some good food chain business plans?

Ans. To start a food chain business in India, you first need to decide the type of food you want to sell. Then you can start formulating a business plan and trying to arrange for funds. After the funds are in place, get the necessary licenses and places where you will operate. Then hire the workers and start your business.

Q. Is technology important for the food chain business?

Ans. Yes, technology plays a crucial role in running the food chain business. It helps you in streamlining your business and manages it efficiently. The online booking system will help you take online orders, which will increase the bookings and revenues. You can use the digital bahi khata to maintain the record of the transactions. These will be used for tax filing purposes.