How to start a food chain business
The food chain business is one of the most lucrative business with a tremendously growing market. The global food and beverage stores market size is estimated to grow at a CAGR of 9.7% to value nearly $1880 billion by 2021 from $1707.29 billion in 2020. The APAC (Asia Pacific) itself accounts for 63% of the total F&B (Food and Beverage) stores market in the world. The Indian F&B industry accounts for 3% of the GDP and is expected to grow at a CAGR of 16% by 2025 amounting ₹10,00,000 crores i.e., 2.5x since ₹4,00,000 crores in 2019.
There has been a considerable amount of growth in the food chain business as the disposable income of the people is increasing. The number of users is estimated to total to 346.9 million by 2025. With the competitive food prices, the industry wants the customers to be coming back while attracting new customers.
Even though the country faces inflation the food chain business is growing and it continues to expand providing quality food and services. The industry has been finding innovative ways to adapt to the recent changes and regain profitability. With enormous opportunities in the F&B industry you can also add up your business to one of the fastest growing industries by learning and following the steps, tips and investment approaches to plan a food chain business.
Decide the concept: To begin a business, one should decide which restaurant do they want to open and this should be decided strategically depending on the average price per customer which gives the idea of average amount that each customer will spend in their restaurant. After deciding this, one needs to make sure that the concept and the theme for the restaurant is finalised and taken action into as the theme of the restaurant helps to create a positive environment. To enable this, you need to make sure the menu designs, interior design and trays for serving are all one theme based.
Investment proposal: Investment is a necessary step to start a business as you need working capital to fund your business and purchase required machines and goods to help run the restaurant smoothly. These investments are provided by Angel funding and Venture Capital which offers a huge amount of money or a part in the business. To get an investment from these investors you need to show your business plan and prove it to them how and why your business will be successful. It is important to become successful in getting their attention as without capital business cannot be established. Loan, debt and self-funding are other ways to get investments out of which loan and debt is a common type of funding whereas self-funding is one of the hassle-free methods to establish one’s business.
Estimate all costs: It is vital to create a plan of all the costs involved in the business-like food costs, overhead costs and labour costs. Food costs are the costs of the raw materials that you have to pay to get suitable raw materials for preparing the dishes while labours costs are the amount paid to the employees in your restaurant like cooks, delivery, security and more and overhead costs are the other expenditures that are taken place like rent, water bill, technology costs and more.
Select a location: Location plays an important role in the success of the restaurant and one needs to choose it wisely as to get more crowd the restaurant should be located in a place that is easily accessible by people and is in a famous locality. It is also important to pay attention to the hygiene of the place.
Getting licenses: It is necessary to get all the required licences allotted by the India’s food business and get an NOC from your corresponding neighbours so that you can run your business legally. Licences vary from FSSAI licence, Business registration, GST registration and more. To get a licensing work done you can seek help from a CA or any other financial firm.
Find suitable vendor: Vendors play a huge role in the food businesses as they provide you with raw material required according to one’s need. It is vital to establish a heathy relationship with at least 3-4 vendors so that it would be beneficial during the time of emergency need. To find a suitable vendor you need to have relationship forming strategy.
Hire workforce: To hire workforce, you can post advertisements or seek help of online advertising to get the required employee. Manpower is important as this help to run your restaurant these include the chefs, delivery person, security, waiters and others.
Use technology: The number of audiences that one can gain to grow their business using technology is vast. Implementing technology in your business is one of the best ways to see your business grow toward success. Creating menu and websites using graphics will help your business to attract customers and help them to select dishes easily from the menu.
The food chain business can be commenced with a proper business plan. With the new technological advancements, it's important that you move along with it and not be left behind while it's also important to stick to the basics and always work towards your goal.