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How to start a restaurant business in India in 7 steps

  • Published on : 12/10/2017


Starting a restaurant of your own can be daunting, especially if it’s a first time venture. However, there are a list of things you should keep in mind to ensure your restaurant adventure moves as smoothly as possible.


Initial Investment

The first question any new restaurateur would ask himself is of where he will procure the funds to start his restaurant. A lucky few have enough money stowed away and can self fund their restaurant dream. However, if this is not possible, taking a bank loan would be your next best bet. This might mean that you will need to write the loan against some other collateral. One the other hand, there is always the possibility of an angel investor or venture capitalist. However, this is more common if you are opening a new franchise to an already existing restaurant, as investors prefer to see past performance and potential of scalability before investing in a new venture.



Once you have gotten your initial investment in order, the next step is to determine the location of your restaurant. Would you prefer a residential neighborhood or one in the professional and office areas? Location would determine the cost of the restaurant property or rent as well as the type of patrons that frequent your eatery, so choose carefully!



Restaurants are one of the most difficult businesses to run as you are dealing with a lot of perishable material, namely food. If not rationed properly, this can mean severe losses for the business. Better to account for the logistics now than be disillusioned later. In addition to daily food provisions, do not forget the monthly rent at your location. On top of this, while setting up the restaurant in terms of décor and furniture, it is equally mandatory to furnish the kitchen with all the latest equipment, to keep you at the top of your game. Your employees are the oil that grease your restaurant machine, and hiring waiters, chefs, busboys, etc. is also a part of your planning process.



There are a host of licenses you must sort out before your restaurant can be up and running. The cost of each license will vary depending on the size of your business. All the mandatory licenses are:


Trade license from the municipal corporation

These licenses can cost anywhere between INR 10,000 to 1,00,000. They are issued per financial year and must be renewed every March.



If you are an owner of a food business, you need a license from the Food Safety and Standards Authority of India (FSSAI). There are a variety of factors that determine the cost and can range from INR 5000 to 10000.


Professional Tax license  

In order to employ staff on a salary, your business would require a professional tax license. This will be payable monthly for staff earning over INR 10,000.


Liquor License

The trickiest of all licenses, liquor licenses tend to be expensive and take a great deal of time, so do apply early.


Business Registration

You must register your business as a partnership firm or Private Limited Company. Hire a chartered accountant to help with filing returns, auditing finance, etc.



Now comes the fun part – figuring out a concept. What sort of cuisine would you serve? What’s the price range? Is there a theme? How would this reflect in the décor and staff uniforms? A strong concept can work wonders, especially if the location of the restaurant is conducive to it. It is important to make sure that the location of your restaurant and concept go hand-in-hand.



An important step in the scheme of your restaurant is manpower. The difference between a good restaurant and a great restaurant is the nature of the staff. Well-trained waiters and servers who have an understanding of the menu and are good, friendly communicators make all the difference to the dining experience of your customers. In addition to this, skilled and experienced chefs are prized at any restaurants – it is advisable not to compromise when hiring the chef as this would directly reflect on the quality of food. Finally, reliable vendors are important for the smooth running of any restaurant.

Last but certainly not least, you must employ the latest technology to tie all the above points together. A restaurant management software like Torqus Systems would do well to augment all the above points into working in tandem to make your restaurant the best that it can be. With features such as inventory management, point-of-sale security, employee management, security control, credit and debit card processing, statistics, reporting and more, your restaurant will be running efficiently and you will be able to ease into your new business.



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