How to Start a restaurant In India

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Foodies are here and there and so are the food bars. Are you interested in spreading the love for food through your own restaurant? Then this article is a complete guide on how to start a Restaurant in India, check it out.

Owning a restaurant in this pandemic situation is not an easy task, but when you are confident enough to convert your dream into reality then it’ll be a lifetime experience. You will not regret it later as it will be a rewarding journey for you.

Before starting, you need to go through little homework. You should study the market, you need to work on clients’ food choices, regional food choices, price, taxes, and many more things.

So for your convenience, we are here with some helpful ideas which will lead you to a successful restaurant opening ceremony. Oh yeah! It’ll be a ceremony. It’s your dream. So you must celebrate. Right?

Without wasting any more time, dive deeper into the article to get a clear vision for your dream restaurant in India.

Get Familiar with the Restaurant Industry

The restaurant industry is the fastest-growing industry even in 2021. As per the National Restaurant Association of India (NRAI) report, India will reach nearly 6 lakh crore INR in the coming years. 

Though in this pandemic situation, running a restaurant is a little hard for the owner, it’s not impossible. Rather running your own restaurant can influence the future budding restaurant openers.

And if you are having a dream of a fine restaurant, the rapid urbanization, fastest-growing income, growing working percentage, and advanced technology will help you to rise with a new restaurant.

So go through this article.

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Best Cities To Start A Restaurant In India

The restaurant business in India is growing. People love to eat out and explore more and more eating joints and try new cuisines. Different cities have different things to offer. Some places are still growing when it comes to the number of restaurants and some cities are flourishing.

Let us look at the best cities to start a restaurant in India are as follows:

Mumbai

This is India’s largest and commercially most-important city that sees a huge footfall of people making it home every day. Mumbai is home to people from diverse cultures and backgrounds hence this is the most fertile ground for restaurants. Some of the most popular concepts of restaurants are bistros, pubs, resto-bars, cafes etc.

New Delhi

Home to not just the locals and people coming in from different cities and small towns, New Delhi also has several embassies, consultants and home to expats and foreigners, this city is definitely one of the best places to start a restaurant in India. Therefore this is one of the best places to start a restaurant in India.

Bangaluru

Home to a large number of young professionals and start-ups, Bangaluru is sure popular for its nightlife and the many restaurants that this place consists of. People tend to eat out and enjoy their meals in the many restaurants that are available.

Chennai

Synonym to art, culture and classical music, Chennai has several lovers all across the country and world. The cuisine is one big part of its culture that people wish to enjoy and experience when they are visiting this place. People are always on the lookout for new restaurants to try food whether it is traditional or English.

Kolkata

This former capital of India is another place that is popular for its food. The colonial buildings and old era charm attracts many tourists. But we must not forget that today it also houses many tech giants hence it has become home to many people. People are high on food here hence restaurants thrive on people who want to try out something new each day.

Hence all these places make for a great place to start a restaurant in India.

How to Start a Restaurant in India

Before entering the F&B industry, you must go through a proper business strategy. A proper strategy and research work can help you to stay and run this lucrative domain.

Here are a few tips that can help you to properly start a restaurant in India successfully:

  • Selection of theme of the restaurant
  • Investment in the restaurant business
  • Evaluation of restaurant costs
  • Picking up a prominent area to open the restaurant
  • Proper license to run an F&B business
  • Selection of trustworthy people with hotel management skills
  • Going for delicate and unique food items at budget-friendly prices when you are starting
  • Arranging a delivery service for your restaurant.
  • Arrangement of vendors and suppliers
  • Modern technology to be used in restaurant

Now we will discuss this in detail to help you out

Modern restaurant in india

Selection of Theme of the Restaurant

The first thing you can do is select a theme for your restaurant. There will be different price ranges for different things. You can keep the antique theme with antique pieces, you can go for some classic retro looks. You can choose your restaurant’s theme based on a specific movie also.

Whatever you will choose, keep in mind the materials which should be arranged in advance. Proper interior, an equal ratio of lighting, maintaining platters, cushion, sofa, curtains, and chairs in the same thing.

You can choose cuisine as per the theme also if you want. But you can always keep at least one theme-based soft drink or a spectacular platter.

There is one more thing to be considered when you are picking up a theme or concept- the capital that you can invest in your restaurant. 

This business needs investment first, then you can calculate the Average Price per Customer (APC). The average price per customer will decide the price that will be spent on your restaurant by each and every client. 

After picking up the final theme and concept, you must have a proper business plan so that you can cope with the future development of your own business. Also, this business plan can be presented to a potential investor who will be interested in your restaurant.

n of Theme of the Restaurant

Investment in the Restaurant Business

To start a restaurant in India, investment is one of the most crucial things. Investment is the most important thing when you are dreaming of your own restaurant. It is noticed that in some cases new business owners or restaurant owners can not see a lightning path due to a lack of proper monetary funds.

So it’s very important to prepare your investment chart. When you are fully done with your restaurant theme, then preparation of the cost chart will be the second thing you need to do. To finalize the capital that is needed to arrange everything properly for the restaurant.

When you get the ideology of capital then you can go for the below-mentioned points.

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Self-Funding

If you have enough bank balance that can handle a new business idea, then you have already crossed a bump on the pathway of your dream. If you have a partner who is also interested in opening a new restaurant then both of you can run the restaurant with both of your funds.

Loan

You can go for a loan to make your dream come true. But keep in mind that a loan can be a hassle later.

Also Read: All about Debit and Credit Notes you should know about

VC/Angel Funding

You can go for a potential investor. But in some cases, you can get a hurdle because most of the time, prominent investors look for an experienced and dedicated business owner.

But as a beginner, they will not accept it easily. So try to show some of your previous business work if possible to show off.

Evaluation of Restaurant Costs

Restaurant costs must be thought of after the above two points. It needs to be evaluated and planned with proper care. We are pointing out some of the most important costs that are included in the restaurant costs.

Food Cost

Food cost is the main cost which is included in restaurants costs. Food costs consist of the raw materials used in the preparation of dishes.

Most of the time, it will be 30% of your menu cost. You must have to finalize the proper vendors and suppliers who will arrange the raw materials in advance to prepare the dish.

food cost

Labor Cost

This is the second most important cost that you should think of in your journey to start a restaurant in India. Labour costs will be a big amount when you are thinking of a new restaurant. You have to arrange a few waiters, cashiers, chefs, and many more as per your requirement.

labor cost

Overhead Cost

The overhead cost includes the cost excluding the food-related things. Here are some of them.

  • Rent is a significant amount that should be kept in mind. Rent can differ as per your choice of location. Prior location rents will be higher than in colony-side places. Keep in mind that a maximum of 10% of the revenue will be kept for rent.
  • Interiors will take a revenue amount. If you are thinking of a theme-based restaurant, a little higher must be kept.
  • Kitchen Equipment is another huge amount for a restaurant. At first, you might have a huge cost for this one. But if you think long-term, then it will be recovered easily.
  • Restaurant Licenses will take an amount based on your establishment type. It cannot be ignored as without the proper license and permission, you can’t run a restaurant.
  • Marketing is a great thing nowadays. It can’t be ignored because marketing can help you in growing the business with ease. Both offline and online marketing is a necessity for the new restaurant.

Picking up a Prominent Area to Open the Restaurant

Location is an important factor when thinking of a new restaurant. Location can determine your success rate sometimes in the restaurant business. When you are looking for a location, identify the competitors of the same business.

Measure their progress and success rate and try to identify what you can improve in your planning. 

You can check their cuisine types, dining facilities, delivery service, appearance, and customer service. When you will assess this, you will get an idea of the customers who hover in that same region and their choices. 

Also Read: How to start a Real Estate Business in India

You must check the accessibility of the location you have picked up. The location must have a proper transport system. Also, you have to make sure that the location is visible to the foodie community.

Never forget to get a no-objection certificate from the neighbourhood of the restaurant location.

Picking up a Prominent Area to Open the Restaurant

Proper License to Start A Restaurant In India

You must have some professional government-approved licenses that will help you to run the restaurant business. These fees are dependent on your establishment size. Also, try to apply as soon as possible because this approval needs some time. 

Here is the license you need to get before starting a restaurant business:

  • Trade license from the municipal corporation
  • Food Safety and Standards Authority of India (FSSAI) to operate a food business
  • GST Registration to get the GSTIN number
  • Professional tax license for employing salaried staff
  • Liquor License Business Registration as a partnership firm or a Pvt Ltd company
  • Fire safety license Pollution control license

Selection of Trustworthy People with Hotel Management Skills

You have to hire some brilliant young energetic people who can handle the business under your guidance when you are to start a restaurant in India. You can hire people through referral because in this way you can have trustworthy people in no time.

If you don’t have any references, you can go for the advertisement that includes the details of the hiring process, qualifications, eligibility, and working shift to work in a restaurant.

You can choose three types of staff:

  • Kitchen staff including food preparing staff, food decoration staff, 
  • Service staff including waiters
  • Administration staff including cashier, manager, and storekeeper.

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Going for Delicate and Unique Food Items at Budget-Friendly Prices when you are Starting

An innovative menu item can have a great impact on your restaurant. Items should be easy to understand and easy to cook. You can serve dishes with the same ingredients on them. This can help reduce the overall cost.

The menu should consist of a starter, main course, side items, and dessert and drinks. You can choose some theme-based food items also to attract your foodie customers. In your quest to start a restaurant in India, the menu definitely needs to be of high priority as it should appeal to the masses and give them the flavours they crave for.

Budget-Friendly Prices when you are Starting

Arrangement of Vendors and Suppliers

You have to contact a few vendors and suppliers of each food category.  You have to compare the prices among the vendors to save your cost.

You should have a long-term contract with your vendors so that you can maintain a raw material supply all time.

Arrangement of Vendors and Suppliers

Modern Technology to be Used in Restaurant

You must have modern technology that can maintain the proper record of the business data. Try to use some datasheet that can help you maintain all the strategies properly.

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Maintaining Proper Hygiene in Pandemic Situations

When you are planning to start a restaurant in India in 2021, you have to maintain proper hygiene. You must acquire sanitiser at every table, at the entrance of the restaurant. Try using a face mask when you are trying to connect to a customer.

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How To Automate Your Restaurant Business

To start a restaurant business in India and run it successfully is tricky. There are a lot of tasks and jobs that you need to assign and work on. This business can be easily handled if you automate your restaurant business. Here’s how to do it:

Employee Management

With the help of business automation, you can easily manage your employee-related data and the tasks that they are assigned. You can keep a track of their work assigned and their progress. Whenever you assign a task to an employee, they can get notifications about the same so that they don’t miss it.

Point Of Sale

The sales in automation tend to grow when it comes to automation of business. When everything is automated, you do not miss an order and are able to take more and more orders coming your way and also deliver them on time. The sales would increase and help you in growing your business.

Stock Management

Integrated with POS software, inventory management is also done easily. It comes in handy when it comes to managing stock and raw materials. From shelf life to the requirement of the product and the quantity, you can manage everything. You can see how long the available product is going to last and reminds you to place the order of raw materials timely.

Table Management

When you start a restaurant in India, table management is definitely one of the taxing things that can definitely hurt your business and sales if not done right. With an automated business, customers can book their tables for a selected time for ‘n‘ a number of people. Table reservations can also be done by one of your employees on the automation app for people who come to your restaurant while there is a waiting going on.

Online Billing

Automating business also helps greatly with online billing. No manually entering the data of each table and everything directly gets updated on the system whenever a certain table orders something and the bill keeps getting updated. This way there is no scope of error of any kind.

Restaurant Vs Cloud Kitchen

If you have decided to start a restaurant in India then you must know each and every aspect of this business. One of the most popular things today about this business is a cloud kitchen. This is a new phenomenon that everybody is talking about. So let us look at some differences between restaurant and cloud kitchen.

Tracking

When it comes to tracking, an order from a cloud kitchen is easier to track as compared to a restaurant. You just need to be on a food delivery website and those apps would let the customers track their orders. Whereas if start a restaurant in India, you don’t just have to track the orders placed online for food delivery but also the people seated in-house.

Investment

A cloud kitchen requires less investment as compared to a restaurant with a physical outlet. In a restaurant, you need to have a seating space, decor, crockery and cutlery, in-house waiters, electrical charges, a place on lease and so much more. In a cloud kitchen, all you need is a kitchen and a few staff members who would be working on the menu.

Business Expansion

It is easier to expand business in a cloud kitchen than in a restaurant. There is not much investment and other formalities and one can easily decide to deliver or open a kitchen in various outlets and not even spend a lot of money as compared to a physical restaurant.

Experimental

In a cloud kitchen, you can easily experiment with a lot of things. You can try the menu and how you run the business. You can basically work on the hit and trial move. This is slightly difficult in a restaurant business.

Customer Relation

In a cloud kitchen, building and then maintaining a customer relationship is difficult for obvious reasons. Whereas in a restaurant you meet your customers and cater to them personally, you get to know them, and their likes and dislikes which help you in building and then growing your relationship with them.

Audience

If you are running a cloud kitchen, your customers would only be the ones who are technology savvy. On the other hand, if you have a restaurant, your audience would be of all kinds, people who are tech savvy and the ones who are absolutely not.

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How Lio Can Help

When starting a business in Mumbai, expect a lot of lists, numbers, contact details, cash transactions, and other such things to become your life. You would need to track these and have them with you at all times. So how do you do that?

You can’t carry all this or have them with you at all times, right? Wrong. You can have all this information and much more and carry it in your pocket at all times. Thanks to Lio.

Lio is that one app where you can store and organise all kinds of data. No matter what information you want to save, you can do it over here. It is here to put your life in order in the most hassle-free way.

There are several features of Lio and all make the use of the application very easy and helpful. You can add photographs, download your documents and folders, dedicate one folder to each information, collaborate and share with others and lock the information.

Lio is definitely for the win and using it for your business is only going to make your journey smooth and easy to track.

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Step 2: Create your account using your Phone Number or Email Id.

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How Lio Automation Can Help You Business Process

Automation surely does make a difference in running a business whether small or large. It can be tricky and overwhelming at first to switch all the business processes to automation but not with Lio. 

Lio Automation gives you many amazing features that make your work super simple and effective. There are very many features that will help you and your business in various aspects. From connecting and staying in touch with your customers, to working together as a team, and everything in between, Lio Automation will truly make your business run smoothly and make it reach new heights of success.

If you are using Lio Automation for your business processes consider all your data safe and secure all the time. Not only is the data saved in the cloud, but it also offers a data versioning feature in which you can actually see the many changes the document or file has gone through and who has made those changes. You can save the version of the file as required by you. 

Since customers are a big part of any business and staying in touch with them is a crucial job, Lio automation gives you the ability to automate Whatsapp communications. Automating WhatsApp communication is another popular trend that businesses can benefit from. With the help of this, you would be able to save a lot of time, boost your customer retentions and renewals, save a lot of money, have lower operating costs and much more.

Another great feature that Lio Automation offers is colour formatting the sheet. Colour formatting can help bring information and more clarity to the audience. Applying colours to different parts of any data will let you narrate a more effective story that easily catches one’s attention as well.

You can share invoices and receipts with your customers while also sharing the payment links with them to make the whole transaction process smoother and absolutely hassle-free for everyone.

Not just this, Team management and work allocation are made super easy with Lio Automation. You can also work with teams in real-time and see all the changes happening.

There are several other amazing Lio automation features that are made so that you and your business can benefit from them. Excited to know more about it? Click here to start with your Lio automation process for your brand and start your journey to success. 

Frequently Asked Questions (FAQs)

How can I start Investing in my Restaurant?

You can go for your personal monetary fund to start your business. Also, you can enlist your business with loans and investors to get huge profits. You can also check for some investors.

How can my Business Restaurant Work?

You have to maintain proper research on this restaurant’s business. You must assess your competitors to understand the market of the business and customers’ choices.

How many Teammates do I need to Start my Business?

You have to hire huge manpower in this business such as kitchen staff, administrative staff, vendors and suppliers.

How Much Time do I need to Stand my Business Properly?

It’s fully dependent on your dedication and passion for the business. You should plan a proper business strategy to get a successful future in business.

Do I need any Skills to be Successful in Business?

It’s mandatory to have the business skills to maintain a business-like F&B with great success.

Conclusion

Hope you get the ideology to fulfil your dream from this article written by me. To start a restaurant in India, you need to be mindful of all the things mentioned above. You have to be well aware and have confidence in all your decisions made.

Be mindful and take all the things into account and make your business successful.

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About the author

Surabhi Guleria

6 comments

  • Each and every piece of information provided in this blog turned out to be very helpful to me. Thank you so much for this kind of informative article. Will love to read more about how to maintain the brand of a restaurant after launching it.

    • Hi Ramia,
      thankyou for the query.
      With a coherent structure and specific job advertisements, the hiring process becomes unchallenging.
      Find support for recruiting , determine the roles to be filled, always prepare a set of relevant interview questions, check every candidate’s references thoroughly and provide a realistic job preview.