Why to start a restaurant business

Easy to set up

Starting a restaurant is relatively easy. The effort and investment required to open a restaurant depends on the scale of the business you want to set up. You can easily establish a small food service business with a few months of preparation and moderate investment.

The probability of profits

Restaurants are extremely popular. Customers are always present in a good restaurant. If everything goes well, you can make crores of rupees from a single place. There is a good likelihood of making profits with moderate investment if you are opening a restaurant business.

Bringing employment

A restaurant is a labour-intensive business. You need cooks, servers, cleaners, cashiers, accountants, people who source raw materials from the market, and so on. Managing a restaurant gives you the opportunity to employ people and serve the community in your own little way.

An outlet for creativity

A restaurant can be a great outlet for creativity. Whether it is planning the decor or finalising the food menu for your restaurant, you can use your creativity to make the site a warm and inviting place for guests. You can also plan creative campaigns to promote your restaurant business.

How to start a restaurant business in India

Step 01: Select the restaurant concept

The first step to starting a restaurant business in India is to decide which business model to adopt. There are many restaurant business ideas to choose from such as:

  • Fine-dining restaurants
  • Quick service restaurants
  • Cafes/coffee shops
  • Food trucks and pop-ups
  • Bars and pubs

Your choice will depend on multiple factors including your preferences and budget. Apart from the concept, you must also decide what type of cuisine to specialise in. This is important for planning your restaurant business. When it comes to cuisine, some of the popular options include North Indian, South Indian, Chinese, Italian, fast food, multicuisine, local/regional cuisine, and so on.

Step 02: Raise funding

The amount of capital you need to open a restaurant depends on multiple factors like concept, scale and location. For example, setting up a coffee shop will require less capital investment than a fine dining restaurant. Once you have calculated how much money you need for your restaurant business, you can start a fund-raising campaign. The three most popular sources of business funding include:

  • Bootstrapping or self-funding
  • Loans from banks or NBFCs
  • Raising venture capital

Step 03: Find the right location

Your location can have a large impact on the outcome of your restaurant business. Your restaurant business model will play a key role in determining the location of your restaurant. For instance, a fine dining restaurant should be located in a posh colony, while a food truck is best stationed in a busy marketplace or office area where it can attract customers.

When scouting for a location to open a restaurant, it is a good idea to identify your competitors in the area and analyse their business model. The competition must be evaluated both in terms of the concept—casual dining, fine dining, quick service restaurant (QSR) and so on—and also the type of cuisine they serve. Evaluating the competition will help you understand whether there’s space for another eatery in the area while throwing light on the customer profile, their spending habits etc.

Step 04: Build an effective team

Hiring and retaining staff is one of the most difficult challenges of managing a restaurant. As you are new in the business, you would need an experienced team to help you establish the venture.

As a first-time restaurant owner, you can hire employees by placing ads on job boards or approach placement agencies. Using referrals from friends and employees is a great way of hiring as people hired through this method are usually a good fit for the job and also tend to stick around longer.

Step 05: Create the menu

One of the most important aspects of opening a restaurant is to create a suitable menu. A well-designed menu can help in attracting the right customers and also reduce operation costs.

Items on the menu should be quick to prepare and use local or readily-available ingredients. It is best to include those dishes that you can do best which are compatible with your restaurant business model. It is a good idea to divide your menu into parts (soups, appetisers, main course, cereals etc) for the convenience of your customers. Highlighting certain items with tags like “must try” or “chef’s special” could help in increasing their sales. Don’t forget to add a beverage section to the list!

Step 06: Get the necessary approvals

A key part of opening a restaurant is to get the necessary approvals from the government/authorities. Some of the licences and approvals that are needed to start a restaurant business in India are listed below.

  • FSSAI licence
  • Health/trade licence
  • Eating house licence
  • Shop and establishment licence
  • Fire safety licence
  • Lift clearance
  • Environmental clearance
  • Signage licence
  • GST registration, and so on

Not having the proper licences and approvals for your restaurant business can get you into trouble with the authorities including fines and imprisonment. It is best to consult a lawyer regarding the licensing requirements for your business.

Step 07: Do up the decor

Creating the right ambience is key to launching a successful restaurant business. It is important to ensure that your restaurant decor is compatible with the cuisine as well as the concept.

You could do the decor yourself or hire a professional interior designer to do it up for you. Pay special attention to things like the signage, storefront/entrance, the theme, seating arrangement and layout, comfortable tables and chairs, the colour scheme, and the restrooms.

Step 08: Start marketing

You can start your marketing activities a few days prior to the launch. You may want to focus on online, offline or hybrid marketing channels depending on your needs. Creating a successful online marketing strategy for your restaurant business starts with a good business website.

Your website should give the reader some background about your restaurant, showcase your menu, display customer testimonials, and spread awareness about your USPs and campaigns. It should be e-commerce enabled so that your customers can place home delivery orders by visiting the site. Apart from your website, you can also use social media, business listings like Google My Business, and food delivery platforms to promote your restaurant business and increase your sales.

Step 09: Launch and after

Depending on your budget and marketing strategy, you could opt for a quiet launch or drum up an aggressive campaign to attract the attention of customers.

Once the restaurant business is launched, it is critical to ensure that you maintain the quality of food and service so that your customers leave the restaurant satisfied. It may take a few months or more to recover your investment and start making profits. Keep an eye on important business metrics like revenue and profit so that you can make adjustments to the business strategy if required.

Why does a restaurant need a website?

Build business credibility

Having a website gives your business more credibility. Generally speaking, customers trust businesses that have a website more than those that do not.

Reach out to people

A website can help potential customers find your business online. You can also use your website to run social media and search engine ad campaigns.

Communicate with customers

You can communicate with your customers through blogs and updates. Your customers can also reach out to you through the enquiry widget on your site.

Showcase the restaurant

A website can provide information about your restaurant through descriptions and images so that your customers know what to expect when they visit.

Accept online orders

Online orders and home delivery is a common restaurant business model nowadays. You can use your website to take online orders and increase your sales.

Impress customers

A detailed and well-designed restaurant business website can create a positive first impression on customers and convince them to try out your food.

Why choose Boost 360 to create your restaurant website

Create your website within minutes

Tell your brand story

Create a digital menu

Take online orders

Collect digital payments

Enable table reservations

Communicate with your customers

Sync your website with social media

Frequently Asked Questions

What do I need to know about the restaurant industry?

The Indian food service industry is expected to reach a market size of around USD 80 million by 2028 as per a report. The annual spend of middle class households in Tier II and Tier III cities on quick service restaurants has grown by 108% in two years according to the same report.

It depends on the type of restaurant you wish to set up. Generally speaking, opening a restaurant costs anywhere between Rs 5 lakh and Rs 2 crore depending on factors like quality and location.

You can use good accounting software to manage your payments. Boost 360 users can collect digital payments for their online orders through a secure payment gateway on the website.

If your restaurant can deliver quality food and service at a competitive rate, you will have an advantage over your rivals. You can also try to differentiate yourself by offering food or services that are distinct from the competition. Marketing (both online and offline) is crucial for promoting your restaurant business and can help you increase your market share.

Quality food and service, a strong brand identity, hiring the right talent, running your business efficiently, controlling costs, and following a good marketing strategy are some of the key elements to focus on while trying to ensure the success of your restaurant business.

Boost 360 can help you to grow your restaurant business by creating a strong brand identity through SEO, social media marketing and other digital channels. Apart from this it can also help you improve your sales by enabling your customers to place online orders through your website.