Do you want to start a Restaurant Business? While India has always been a food-loving country with each region having its special cuisine. There has been a rapid growth of food industries over the last 10 years in India. In studies, it has been found that restaurants are growing 10-15% per annum. So there is a great space in the field of restaurants to start a new restaurant. A lot of people didn’t know how they can start a profitable Restaurant business. Every year a lot of restaurants also close due to lack of Marketing. So in this blog, we will learn how you can start a profitable restaurant business and successful marketing plan
What’s In It For Me
1. How To Start Restaurant Business
When starting a restaurant, it is important to have a clear concept. It includes the unique service style of the same restaurant, the food served, and the ambiance of the restaurant, which creates the brand of the restaurant. Keep the unique name for your restaurant, which will create a unique image of the restaurant. You do some creativity with the fonts to look unique font of the restaurant name.
i. Financial Planning For Restaurant
Financial planning in any business plays a significant role in their success. So back calculation and planning of all finances are an essential part of the restaurant business before starting. In the restaurant business you have to keep one thing in mind, the restaurant business takes 9-10 months for break-even, so please keep your financial planning as you can survive well for a year. Here are the costs involved in a restaurant business described :
Primary Costs-It is the cost of ingredients and raw materials which are the raw products of the dishes. Ideally, the food cost should be around 15-30% of the menu price.
Secondary Costs– It is the other cost except for the cost of the salary of employees and food. Here are the secondary cost elements described below :
Rent- The rent of a restaurant is a major burden on the budget and it varies as per the location. One should plan the location for the restaurant whose rent should not be more than 10% of the budget.
Interiors–Interiors of a restaurant should be theme-based and our budget. If you like any theme you can design the interior of the restaurant accordingly. The unique theme also attracts the audience. E.g – Pubg base theme, Pind Balluchi theme
Kitchen equipment- For preparing quality and tasty food with optimum utilization of electrical energy and fuel we should purchase good quality equipment, those may be expensive, but they conserve electric energy as well as fuel, so within 1-2 years they pay their price. It is very important to maintain the kitchen neat and clean.
License- Documents and respective licenses must be available with you to run a restaurant business and it cannot be ignored. According to the types of restaurants different licenses are provided by Govt. of India and the fee of the same varies accordingly. The Details of the restaurant license required in India have been described below.
Marketing – Marketing of a new restaurant is very essential, the location of a restaurant also plays a significant role in marketing. We must spend a minimum of 5% of our budget on the marketing of the restaurant. Marketing is essential for acquiring the market soon for new and quality restaurants.
POS- As we all know, we are in the age of technology, so there are lots of technologies introduced in the field of the restaurant to smoothen the business operation. POS software has been introduced in the field of restaurants to smoothen the operation. Its cost varies according to the functionalities of it. You can know more about the pos software at the given below link. https://limetray.com/restaurant-pos
The location of a restaurant plays a vital role in the success or failure of the restaurant. While choosing a location for a new restaurant it is a good idea to find a location where the footfall of people is high, So that the restaurant would be visible to all those who are traveling from there. While finalizing the location of the restaurant one thing should be in mind that the place where the restaurant is visible and it should be on the main road so it will be accessible. Open space available near the restaurant should be more preferable for parking. A restaurant which is located on the ground floor preferred by customers because of the ease of accessibility and visibility.
iii. Document Required For Restaurant
Trade license from the municipal corporation: This license is issued for a financial year and needs to be renewed every financial year in March. The fee of the license depends upon the size of the restaurant, it varies the range 10 thousand to 1 lakh. However, the actual license fee for a small restaurant is 5000-10000 rupees.
FSSAI: There is a requirement license from FSSAI for a restaurant business. The cost of a license depends on the capacity, turnover, size, location, and type of the restaurant. The cost of FSSAI may be between 5000 to 10000. For further details, you can go through the FSSAI link given below.
Documents required for Registration:
Documents of identity proof e.g Rashan card, Aadhar card, Voter id card, Pan card, Passport, Driving License, Senior citizen card.
NOC- Noc from the municipality in the town area, Noc from Panchayat in the village area.
Eligibility criteria for documents detail given here
GST Registration: In India, for ease of business there is a need for GSTIN number for a registered firm. So a restaurant is required to register under GST to get their GSTIN number. GST is state-specific, so we have to register our GST according to the rules of the state in which we are planning to open a restaurant.
For more detail, about GST you can go through the link provided herehttp://www.gstcouncil.gov.in/state-government-gst-website
Professional Tax Licenses: We need a professional tax license for employing salaried staff. It applies to those staff who earn more than 10000 monthly.
Firm Registration: We need to register our business under a partnership firm or Solo firm. Against the name of a firm, we need to file our GST every financial year.
iv. Recruitment of Staff
For the restaurant business, the attrition rate of employees is very high, it is challenging to retain the right employee with us after recruitment. Nowadays there are so many social platforms available like Facebook, Instagram, Linkedin e.t.c from where we can hire employees.
These are the following required staff for the restaurant :
Management Staff: Manager, Cashier, Storekeeper
Kitchen Staff: Chef, Cook, Food preparation staff, Support staff
Service staff: Waiter, Housekeeping staff, busboy
Note: We need to train all the staff according to our business, all staff must train about soft skills and communication skills.
v. Menu Design
The design of the menu plays a very significant role. A restaurant menu card is like a chef’s dish. It should be designed in a presentable manner, otherwise, the customer would make a wrong perception about the restaurant without even tasting the dishes. The design of menu cards plays a crucial role in shaping a customer’s perspective towards a restaurant. To make an excellent first impression on customers there must be a spectacular menu card on the dining table. According to the research on the psychology of menu design, it has been said that green color on menu items shows it fresh and organic, orange color stimulates appetite, yellow attracts the reader’s attention since it is a happy color and so on.
High margin dishes should be highlighted in bold letters so it attracts as much attention as they can. It improves the profitability of the restaurant. If the prices are written alphabetically the customer would less notice on high price dishes. The text in the menu is the ultimate weapon. Incorporating appealing font in the menu card and highlighting the necessary words will make a huge difference. We should write stories against the dishes in which the reason should be written for the addition of dishes on the menu. It must be informative because people love to read about the food they eat . Menu design is not a one time job, it has to be updated regularly with an influx of new culture & trends.
vi. Raw material supplier and vendors
Deciding a raw material vendor is like choosing a restaurant lifeline. The success of a restaurant pretty much depends on the vendor as the taste of food depends on the quality of raw material if the same, as well as the cost of the food, directly depends on the cost of the raw material. Thus it is necessary to choose the reliable and honest food raw material supplier for the restaurant.
We need to contract with local raw material suppliers(more than 2 for emergencies) for the restaurant, which will be easily available near the local areas, they will provide fresh raw material at the cheapest rate. We have to create a very healthy environment with our vendors or suppliers so we smoothly operate our restaurant with the help of them. And we can focus further on improving the efficiency of restaurants. We have to deploy an effective and efficient employee there to manage all inventory. Because the cost of raw material inventory plays a major role in the total expenditure of the restaurant. While selecting a raw material or food supplier, given below essential point have to be considered:
Quality: Quality of the raw material or food must be the priority while selecting the vendor. It should not be compromised with the cost of it.
Punctuality: The vendor should have to be punctual with his deliveries or else it will directly affect the operation of the restaurant.
Cost of Raw material: For optimizing the cost we have to compare the rates of at least 4-5 suppliers.
Credit Period: The credit period offered must be reasonable and negotiable. So the cost of raw material will not be the burden on the pocket of the owner while starting a new restaurant.
Restaurants Business Model
The restaurant industry is one of the largest employers in the world. If we talk about the business model, the operations of a restaurant include-
- Hiring of the right staff
- Procurement of raw materials
- Offerings of various delicious cuisines
- Pleasing interior and ambience
- Extraordinary customer service
The restaurant business is a very profitable business. The cost of food preparation includes the ingredients, fuel, chef, and the electricity cost of the appliances required to prepare a dish. You should consider the variable cost of a few raw materials.
There are various categories of restaurants that provide different food. Some of them offer fast food, some provide multicuisine, and some focus on food from any particular region or culture. You can also plan to open a theme-based restaurant which becomes more popular nowadays.
Another business model of restaurants is organizing parties and events. People book a space in the restaurants for their birthday, anniversary or any other celebrations. The restaurants handle all the preparations and make the events memorable for the customers. The price and profit depend on the number of services and negotiations.
The core of your brand is the taste of your dishes. You can charge customers a fair amount of money for the experience you provide. The additional source of revenue is take away parcel and online food delivery. Your restaurant may have a limited space to serve a fixed number of people at a time. But, you can get more orders per day by providing the parcel facility to the customers.
2. Types of a restaurant in India
Ethenic restaurant – Ethenic restaurant is specialized in the ethnic or national cuisine.
Fast Food – By the name of it is clear that fast-food restaurants stand on the speed of service. Operations range from small scale street vendors with food carts to multi-billion corporations like McDonald, KFC, Burger king e.t.c.
Casual Dining – A casual dining restaurant (sit down restaurant) is a restaurant that serves moderately-priced food in a casual atmosphere. Except for buffet type restaurants, casual dining typically provides table service.
Family style restaurant – It is a type of restaurant in which food is generally served on plates.
3. Branding For Restaurant
Branding is an important part of success in any business. Branding includes Brand name, Brand logo and Brand Logo. Your Branding strategy describes how your brand will establish in the Market. So you have to formulate a good brand strategy for Your Restaurant Business so you can Market your business well. Choose a Good Band Name, Logo, Tagline and define your audience to Create a Strong Branding strategy for your Restaurant.
4. Offline Marketing For Restaurant
1. Advertisement on Print media: Offline marketing is a tried and tested method of reaching out to customers. Securing a place in the newspaper, setting up an ad on a billboard, although expensive is a sure method of grabbing the eyeballs. The size of the place in the newspaper or ad depends on your budget.
2. Advertisement on Air: Radio mentions are comparatively cheaper and work wonders especially in the local market. If we host an event, new dishes or menu or special discount advertisement through radio it delivers excellent results.
3. Hosting an event: Hosting an event is a great way to give an edge over other restaurants. Customers love new and exciting experiences. Inviting a band, DJ or a celebrity always attracts not only the customer but also the followers of them. Standup comedy is a low budget event. Hosting events is one of the popular marketing strategies.
4. Participating in a food festival: In a food festival, there is a huge audience footfall, if they will like your food there they will come again to your restaurant.
5. Distributing Pamphlets: Distributing pamphlets is one of the cheapest marketing strategies. These are low in cost and easily distributed to potential customers.
5. Digital Marketing For Restaurant Business
1. Website Creation For Restaurant
A website provides a platform where the service provider and customer can interact with each other without physically meeting. It provides interaction between both where the customer can share their experience with the taste of dishes and services. It plays a significant role in digital marketing. With small training, anyone can create their website or you can consult any digital marketer in this regard. On your website, you can provide the pics of your dishes, any discount or offers of a restaurant. On the website, you can share the address, map and contact details.
2. Local SEO
The best online strategy to grow the local business is local SEO. List your Restaurant on Google My Busines Business and all other directories. Ask your customer to leave a review on your listing. For More details about Local SEO Watch this video.
3. Instagram Marketing
Instagram Marketing is the best platform for a restaurant to build a loyal audience. Make an optimized Business profile with all details. Post regularly and consistent content. Conduct competitive research and hashtag research. Here are the ideas for posting content Regarding Restaurants.
1. Share Best Customer Review
2. Share Behind the scenes of your kitchen
3. Share Restaurant’ best Features
4. Share your Menu
5. Share Upcoming Promotions
6. Share Some memes and quotes
7. Share A recipe
8. Put up Sheaf Profiles
9. Promote Your Friendly options
Facebook Ads For Restaurant
Facebook is the best platform to run digital ads. Alway target local area while running ads for Your Restaurant. You can run the following ads for your Restaurant.
1. Run Special Season Ad
2. Run Menu Ads
3. Run Offers Ad
4. Promote Your Dish
6. Marketing Ideas For Restaurant
1. Invite Food Bloggers at restaurants: We can invite local food bloggers at our restaurant to eat the delicious dishes of the restaurant, and ask them if they like the food write a blog on it.
2. Local YouTuber: We can ask the local YouTuber of the area where the restaurant is situated to have lunch in the restaurant and if they like the food, create a YouTube video of the same and share it on his YouTube channel. It may be that they will charge you for the same.
3. Facebook Business Page: Create a business page on Facebook to make a presence on Facebook. It will attract the local audience. You can regularly post the pic of events organized by you or your new offers or discounts regularly.
4. Partnership with delivery Delivery Services: Nowadays people are very much busy with their regular job and work, so they don’t have enough time to visit restaurants, so they love to order food which could be delivered at home. There are lots of service providers available, who deliver food to customers from restaurants. So it is a good idea to do a partnership with food delivery service providers, like Zomato, Swiggy e.t.c.
5. Discounts and offers Coupons: It is a surefire way to increase the footfall of customers by providing discounts or offering coupons.
6. Festive offers: On any popular regional occasion to increase the footfall of the audience always provide discounts as much as you can afford.
7. Marketing Funnel For Restaurant
A marketing funnel is an important part of my Business. A marketing funnel is a pipeline that describes how you will get sales through marketing. It is the way which can user suffer means the process of generating new customers for your restaurant. So here is the Marketing funnel for Restaurant.
Attract- The First stage of the marketing funnel for the restaurant attracts. In the Attract phase, you will use different marketing channels to promote your Restaurant. For attracts more, you can use Instagram, Facebook & other platforms to attract many customers.
Capture- The Next Phase of the Marketing funnel is to capture customers from already attracted Customers. You can run ads on different Social Media Platforms, showcase your Menu and run different types of promo and coupons to capture customers.
Remarketing- Remarket the customers you have already attracted by showing them ad again and again. You can retarget all the audience you’re build with your online and offline marketing.
When you start your restaurant business ,first you need to Financial planning, unique brand name, unique service style, location, best slogan to attract customers, etc.
Trade License From The Municipal Corporation
Professional Tax Licenses
Documents of identity proof e.g Rashan card, Aadhar card, Voter id card, Pan card, Passport, Driving License, Senior citizen card.
Invite food blogger at restaurant
Page business page
Partnership with delivery service
Discount and offer Coupons
A marketing funnel is an important part of my Business. A marketing funnel is a pipeline that describes how you will get sales through marketing. It is the way which can user suffer means the process of generating new customers for your restaurant.
Attract – For attracting more, you can use Instagram, Facebook & other platforms to attract many customers.
Capture – You can run ads on different Social Media Platforms, showcase your Menu and run different types of promo and coupons to capture customers.
Remarketing – You can retarget all the audience you’re building with your online and offline marketing.