Yes, today, youngsters are very clear to innovate new things in society, and many want to become entrepreneurs. One particular industry which is sprouting now is the restaurant business. Post-Covid, the rise of the restaurant business is significant worldwide as most firmly believe it is an evergreen business. As your preferred restaurant management application brand, we have to guide you from starting your restaurant business and work with you every second to help you win daily. Every business has challenges to overcome, and one needs to make sure about the plans. Opening a restaurant is not simple as making a piece of cake. Beforehand, the groundwork will make the task easy to accomplish. This blog is for you if you want to open a restaurant.
- Why Restaurant Business
- Create a Business Idea
- Generate a Business Plan
- Select a location
- Business Investment
- Bank loans
- Venture Capital Funding
- Loans under government schemes
- Planning for a menu
- Focusing on licenses
- Equipment and accessories
- Revenue generation
- Grand Opening
1) Why Restaurant Business?
Restaurants are always an attractive place for people. The business allows entrepreneurs not only to profit and makes them try new ideas. This develops team-building skills, a service mind, getting to know people’s individuality, and an opportunity to have different food daily.
Many fear that restaurant businesses need more investment. It is not so. Minimum areas and minimal financing with proper blueprints will make it come with a bang.
We are here to mentor you with a Checklist for Starting a Restaurant that will guide you throughout the process.
2) Create a Business Idea:-
Don’t worry; you are a start-up owner and need lakhs to make it. A perfect and unique proposal with a minimum amount makes your business reach heights.
Our foremost goal is to choose the customers we will target. Whether it’s for children, bachelors, or family members, we can get an idea of their frequent visits.
Then give a thorough market survey about the customer’s favourite cuisines and their convenient dining space. The locality might be bored with the local dishes, and they want to try new ones. Don’t miss out on in-field business owner feedback. Their positive and negative comments will guide you to enrich your ideas.
The concept you are choosing should be unique, and keep in mind not to try already flopped plans by restauranters. Sometimes the idea won’t get clicked in every area. It depends upon the population. The customer’s most attractive menu with marketing strategies makes them visit the restaurant often.
Always be mindful to cope with the trend; they change often and push you into trouble. Think wisely and create a design that makes the brand last for years.
3) Generate a Business Plan:-
You may think about why it is a need to create a plan for the restaurant business. Without proper planning, it is impossible to make the vision progress. Sketching out every feature on paper or print is so important. Since the master plan acts as a prescription and gives access to follow the protocol daily. Always keep in mind that if you are new to this field, structure it for a long-term run.
As mentioned earlier, a detailed project summary should be scripted effectively.
· Summary of Executive
· How restaurants should be designed,
· Demographics of customers,
· The investors
· Analyzing stakeholders
· Selection of cuisines in the menu card
· Price for each dish
· Cost of furniture, cutlery, Interior Design
· Selecting employees and their package
· Market Exploration
· Legal Formalities
· Short term goals
· Long-term goals
· Current trends
· Unique strategies to sell the product
· Digital Marketing Strategies
· Working hours
Moreover, a confidentiality agreement should be prepared if it has collaborated with local markets and partnerships. The executive summary will do better if there is a franchise plan. It will contain an overview, goals, business analysis, products, services, target market, management system, and financial outlook.
Mostly the goals should be based on their dining method, loyalty program, high-quality customer satisfaction, and good profit without compromising food quality.
It might look rigid and slothful to sketch on paper. But if every bulletin is documented and tracked down frequently, the brand would go for a long run.
4) Select a location:-
Searching for a location is an essential part to be taken into consideration.
· Before probing into the location, the foremost point to notice is the target customer: whether it is college students or bachelors or family.
· Researching the target audience’s demographics will help plan the type of investment and location, be it costly or subtle.
· Confirm that your budget meets the location requirements, as it varies if you are looking for a mob gathering destination. The price will be sky-scarping so make sure you sign the legal agreement if it’s a rental space.
· The luminosity of the customers means the restaurant should be easily accessible to the audience. Youngers, elders, and travellers will mostly access the city centre or a highly trafficked place. So always choose this destination if it is a deserted area; dining at night might not work out for aged people and women.
· Everyone has cars, so parking places should be mandatorily considered. It should be near the restaurant to reach through. Also, transportation facilities ought to be available nearby. Make sure disabled people can readily enter without much fuss.
· Before signing up for the space, check whether the square feet of the kitchen and dining space match the business requirements. For this reason, the restaurant kitchen needs to be 1,051 square feet on average. So, based on the concept structure, choose the location.
5) Business Investment:-
Opening a dream restaurant with an investment isn’t a walk in the park. Before generating the revenue, there will be expenses to be taken into account
1. Building rent
2. Interior and furniture
3. Cookery and Cutlery Equipment
5. Purchase of Ingredients
6. Marketing and Advertising
7. food costs
8. labor costs
9. Employee Payments
10. Electricity expenses
These are the expenses that we can’t avoid and sometimes the capital amount will not be enough to run the program.
Here are some more pathways to do finance in a proper setup. Let’s look at the pointers in detail.
An entrepreneur can drive in this boat safely if the plan is generated properly and executed well with his/her savings without undertaking loans. Once flourished and well known for business tactics, you can elaborate with the loans.
When choosing a partner, always choose a close acquisition, mostly a friend. Usually, it takes both ends to have the same wavelength to keep the business on track. Yes, it’s true everyone’s thinking differs but it should be adjusted and the bonus is that investment and profit are shared equally.
It is such a hectic job, as many legal formalities and paperwork must be done. The important fact is that the business plan should convince the bank authorities. Interest rates could be high on private banks, reaching up to 15 percent of the principal amount.
Venture Capital Funding
This funding is done by investors when one gives profitable growth to a business with stability. For start-ups, it will be hard to see when you sustain yourself in this business and show a profit, and angel investors will approach you.
The ideas used here will generate money, meaning investors and clients will be ready to fund if the idea has profit in the future. Good research must be done before generating a business plan for attracting crowdfunding.
Loans under government schemes-
For food and beverage businesses, the government offered different types of loans. They are- Term loans, working capital loans, and Asset-based loans.
· Term loans are large loan amounts held for up to 10 years.
· A working capital loan is for a short-term purchase of day-to-day groceries and vegetables.
· Asset-based loans are long-term loans used to buy property or equipment. until the loan amount is finished, the property or equipment will be pledged to the bank.
6) Planning for a menu:-
In running a profitable restaurant, a perfectly-curated menu plays a vital role. The menu is not only about the dishes; its prices and description also matter the most.
· Before planning a menu, consider the location and the freshly available ingredients. Proximity can have fish and seafood, which would be readily available so that the menu can have many seafood varieties.
· Ensure the recipe on the menu is readily prepared when the customer orders. Don’t add recipes that take more time. Complexity in preparing food will harm the customers. Sauting, grilling, and barbeque should be easy to prepare on the spot. Also, add similar ingredients for more recipes to avoid food wastage, like creating a base curry that can be used in many dishes.
· Always make the names of the menu easily readable for the customers. If you add too many items to the menu, the client will get confused about what to order. Mostly it should take them 10 to 15 sec to finalize their order. If the menu has cuisines from other countries, don’t write in a non-native language. It might look like jargon to customers.
· Exhibit the menu with creativity and uniqueness. Make sure the menu font is easily readable and add the description of each dish so that they would get to know the ingredients and how it’s prepared.
· Setting price is an essential category in preparing the menu. The affordable price with quality taste will make the restaurant get fame. Don’t make the mistake of increasing the cost, it will make them search for a low-cost dish. you should know how to balance the ingredients charged and the food cost, so the balance to run the business comes.
· Always follow the trend and change the food menu according to your customer’s changes. Frequent changes will confuse the client and structure the menu card accordingly.
7) Focusing on licenses:-
Opening a restaurant and looking for a profit is the main task however, there are mandatory legal procedures to be done. Yes, we all have to follow government rules and regulations and so does the license. Getting all the licenses for restaurants isn’t a walk in the park. We need to have all the legal papers signed so one can easily safeguard them from future hazards.
Don’t panic, we are here to help you, and below are the important licenses listed for starting a restaurant business.
· FSSAI License:- FSSAI stands for Food Safety and Standard Authority of India. It is the foremost and most important food license that permits the opening of a restaurant. This qualification gives customers satisfaction and confidence to enter a restaurant.
Based on the category, the application fee differs into three types.
1. FSSAI Registration – Food Business -> turnover of up to Rs.12 lakhs per year.
2. State License – Food Business -> turnover between Rs.12 lakhs and Rs.20 crore per year.
3. Central License – Food Business ->turnover of Rs.20 crore and above per year.
Documents Required to apply:-
· FSSAI form duly filled and signed by the Restaurant Owner
· Valid Email ID, Contact Number, and ID Proof
· Address Proof is given by the government
· Partnership Deed / Affidavit of Proprietorship
· Main stakeholder identity proof
· Declaration of Food Safety Management Plan
· Proof of possession of the location/premise
· Local Municipal Corporation’s no objection certificate
· Kitchen Layout Plan
· List of Food Category
· ISI-certified Organization’s Water Testing Report
· Employees medical certificate
· Types of equipment
· Shop and Establishment Act:- This act is brought to all food-related businesses, eateries, amusement parks, and theatres. This license is necessary to run a business in a particular state to regulate working hours, wages, and terms of services.
Documents required to apply:-
· Pan Card
· Identity Proof
· Proprietor’s address proof
· Details of the employees
· Collaborator with the company
· Business Registration:- This license is done if a person is about to start a business. Registration will be held by registering the company, sole proprietorship, or partnership registration.
· GST Registration:- Every business in India mandatorily has to register for GST. Businesses with Rs 40 lakh turnover essentially have to apply GST.
Requirements to apply:-
· Proprietor pan card
· Partnership Deed
· Mail ID and Contact No.
· Aadhar Card
· A passport-size photo
· Bank Statement (Name, Address, and IFSC Code)
· List of Items to be traded and purchased.
· Digital Signatures of authorized partners
· Possession letter from Authority
· Registered lease deed.
· Authority Letter
· Eating house License:- This license is provided by the License police commissioner of the particular locality to start a restaurant that serves public eateries. This shows that every restaurant that serves food and beverages compulsorily has an Eating house license.
Documents required to apply:-
· Documents for Eating House license and if it’s a lease, NOC from the landlord.
· Site Plan for the details of Eating House dimensions.
· Eating House Photographs which are perfectly ready to use
· Photocopy of Valid NDMC/MCD/DCB/Airport Authority of India trade license and free receipt.
· Residence proof of the applicant
· Notary Public attestation with the affidavit of Rs 10 stamp paper
· Fire NOC is needed if 50 or more seating is done
· Undertaken about amusement activities
· Undertaking regarding the installation of CCTV Cameras with a 30-day recording facility
· Health trade License:- This license is done for the sake of public health. According to the municipal corporation, the license is issued by the health department or municipal corporation.
Documents to apply:-
· Sanctions and Completion (Includes Ownership proof, Rent Agreement, or NOC from landlord)
· Site plan and layout of 3 photocopies.
· Indemnity bond for Rs. 100
· Structural Stability Certificate
· Power and Water paid Bill
· Sewer Connection Proof
· Water Testing Reports
· Plan for the Premises
· Medical Certificates of Employees
· Property Tax proof
· Medical Fitness Certificate for Workers
· Insurance:- It is always safe to ensure that the restaurant is insured. Safeguarding buildings, public and private holdings, and fire policy insurance is a must.
· Environmental clearance license:- To safeguard the environment from pollution, a restaurant should prove to the government it won’t harm the ecology by applying for an environmental clearance license. This license is provided by the Ministry of Environment and Forests.
Documents required to apply:-
· Letter of intent from the Ministry of Industry
· NOCs from the State Pollution Control Board
· Music license:- To play music in a restaurant license should be applied and it is provided by Phonographic performance limited. If the restaurant took it for granted and played the music they will have to pay the legal penalty.
· Signage License:- This license is provided by the municipal corporation. This license is required for the restaurant to legally promote through posters, paintings, and graphics to advertise in local areas
· Liquor License:- Every restaurant won’t provide liquor if the restaurant has a plan to serve liquor have to get a license from the local exercise commissioner. Be sure to get the correct license as it differs for hotels, restaurants, and bars.
· Types of Liquor License:-
· L- 1 Licence
L-1 License is granted to the company, society, partnership, or proprietorship firm running a manufacturing unit. State Excise department issues public notices inviting applications for the same in leading newspapers and official websites.
· L-3 Licence
An l-3 License is required for distilleries and bottling plants. The government issues tenders for granting this type of license.
· L-6 Licence
This license is for retail vendors of Indian liquor. The state government grants such licenses only to selected undertakings.
· L-9 Licence
This license is granted for the retail sale of liquor to foreign brands. This can only be available for an L-1 License holder who wants to get a foreign liquor license.
· L-10 Licence
If one wants to get a license for the retail sale of Indian and foreign brands’ liquor, they get it under an L-10 License.
· P-13 Licence
The license is granted to hotels, restaurants, and clubs to permit them to serve foreign liquor on their premises for hosting a specific function on a particular day.
· P-10 Licence
This license is granted by the government to serve liquor at a specific function on particular premises anywhere in the city except in public parks.
Documents required to apply:-
· Restaurant address proof
· Legal status proof regarding whether it is a company, partnership firm, or any other setup
· Business details copy
· Original application form
· MOA and AOA if the applicant is a company
· Fire service and municipal corporation’s NOC
· Legal possession of the plot
· List of all directors of the company
· Photographs of the applicant
· latest IT returns photocopies
· Income Tax Assessment Documents
· Proof of no criminal activity involvement
· Lift License:- If the restaurant is located in a high-rise building electrical inspector issues the license for the lift, based on how well the installation is done and the safety measures are made ready.
· Fire safety License:- Customer safety is the utmost priority as the restaurant deals with gas, fuel, oil, and other food ingredients they should get a No Objection Certificate NOC from the Fire Service Department to run a safe restaurant.
One thing to clarify, license specifications differ between cities and states. Always seeking a professional who is good at handling License work will be easier to complete the entire checklist.
8) Equipment and accessories:-
Dealing with the initial costs of restaurants is a tremendous task. In particular, purchasing equipment with an estimated amount is like pins and needles. We need to make a listing based on the service and what one is about to serve the customers.
Confused about what to avoid and what to add to the kitchen, we are here to lessen your burden.
Below are some important gadgets and utensils you should add to your listing.
2. Ranges and ventilation
3. Food processors
6. Food prep counters
7. Freezers and refrigerators
8. Safety equipment
9. Storage racks
10. Cooking equipment
12. Storage containers
14. Kitchen Display System
15. Point of sale system
16. Steam table
17. Washing equipment
18. Sharpening stone
20. Ice maker
21. Gas or electric grill
22. Flat-top griddles
23. cutting boards
24. Deep fryers
25. Beverage machines
26. Coffee and Tea Equipment
Make sure the quality of the equipment is good, and the kitchen has enough space to accumulate. Store owners tempt customers with extraordinary setups like adding mirror work. To make it short, it should make the janitor’s work simple cleaning. Buying the product from the top brands is fine, but fancy equipment will not make sense, check whether the equipment meets your budget.
9) Revenue generation:-
Yes, I said it right, the utmost target is generating money that’s profit. There is no fixed strategy followed everyone has their own creative ideas. what you think is right sometimes might not work. So here we have some interesting strategies for improving your sales.
-> After covid, the way of dining created a major change in the customers. Hosting events is a current trend; the restaurant has to plan the event according to clients’ taste with an interior theme and unique menu card. This package will give a massive hit.
-> Promoting business through traditional and digital advertising is always a positive and easy task. However, promoting in local areas is an added value. Adding complimentary food like desserts or less in combo packs through pamphlets and banners surely will tempt customers.
-> Concentrating on prices and addon unique dishes is a critical task to deal with. frequent inventions won’t attract customers, and the price should be slightly increased. Taking the nuances you have to carefully curate a new dish.
Applications are nowadays inevitable. People are so fond of eating in their comfort zone. Have a tie-up with delivery apps, and use powerful restaurant management system like Gleeca. This is an excellent idea for both sides.
-> The last important factor is customer satisfaction. Whatever may be the situation, always give the customer excellent food and top-notch service. Automatically they visit and word of mouth will reach many.
11) Grand Opening:-
The first impression always has a great impact on the customers. Invite a big shot for the cutting ceremony and call all food bloggers to the restaurant. Prepare the chefs and other staff to give their best to satisfy the customers. Customer satisfaction on the first day will play a pivotal role in the upcoming growth. It will reach social media and create a vibe for the youngsters to dine in your restaurant.
With all positive vibes and the perfect plan, start your restaurant business. This checklist would help you to avoid the fuss and take every step effortlessly. Don’t worry about the failures it is learning, and that helps your restaurant brand shine in the mere future.