If you have always wanted to be a part of the food industry, but have been unsure of how to get started, then this article is for you. We will take you through the practical considerations and necessary steps to start your own food business in India.
Starting a food business in India can be a daunting task. It requires significant investment but also extensive knowledge on starting and running successful food businesses. In this article, we will take you through the entire process from ideation to closure. So stay with us till the very end.
Why Choose a Food Business?
This question is quite common when you start thinking of any food business.
“Why should I choose the food business industry?”
Well, the answer to this could be different for every other person. It could be answered as a way for your recipes to reach out to a mass audience if you have a passion for cooking.
If you are a business person, who seeks an opportunity in the food business in India. Then the reason for you could be the great and bright future of the food industry in India. Its growth in recent years and growth prediction for the upcoming years can definitely be a satisfying reason. Even if you have a unique way of serving/offering your food, then also you should choose to start a food business of your own.
We are sure you won’t find it difficult to find a reason for starting a food business.
Indians are always fond of tasty and delicious foods. And those businesses which are connected with food in India can never go out of business. You can even have a look at the surveys related to this. The future of the food industry size is expected to cross Rs 5 lakh Crore by 2025.
The future is really bright, it just only depends on how you are going to proceed in this particular direction.
Now we hope you have a clear reason for entering into this industry. Let’s take one more step in the direction by understanding some basic details about it.
How to Start a Food Business in India?
Starting anything new could be a very difficult task if done vaguely. But when done with a proper strategy, planning and fixed focus and dedication can be fruitful as well. Here a complete guide on how to start a food business from ground level is briefed in simple words. So even if you couldn’t grasp all this information, still you would get an idea of how things actually work in the food business. Let’s start this with a complete zero ground where you don’t have any idea related to the food business, neither you have decided where nor which business you are going to start with.
The first thing to know while deciding on the food business in India is the different types of food businesses that can be done out there. And thereafter we will see the possible best location for your business, the costing, and other relevant and important things in the list accordingly.
01. Selection of Type of Food Business
If you think that the food business only includes the typical dine-in restaurants. Then you should wake up! It is 2021, there are so many new types of food businesses out there that we can’t even cover all of them. We are only going to provide you with some of the best food business ideas that can work in 2021 for you. So without wasting any more time revolving around the types of food business, it’s time to get a dip into 7 Best Food Business Ideas in 2021.
- Home Tiffin Business
- Pastry Shop or Bakery Business
- Food Franchising Business
- Food Delivery Business
- Food Truck Business
- Open a Traditional Restaurant
- Ice-cream Parlour
Whatever type of food business you select, always keep in mind its future and current demand in the market. After selecting the type of business and having an investment for a food business, the next thing on the list is the selection of location for your business.
02. Selection of Location
Having an estimate of the investment you could use for your food business can very well help in selecting a perfect location for your business. Location selection is a very essential part for a new startup for successful settlement.
In fact, sometimes having good infrastructure, good service, and a great environment could possibly not be as beneficial for your business as a suitable location might be. Starting a business in remote areas is not very advisable as it needs a lot of marketing for your business. Indeed one can actually select a location that is surrounded by potential customers. In India, the craving for delicious food is in our blood, you just need to find a perfect place to cater to it. There are some factors that need to be check listed before finalizing the location of your food business.
- Space Size
03. Arrangement of Supplier for Food Business
The next step is to select your business’s suppliers. For example, you will need furniture, Point-Of-Sale equipment (POS systems), kitchen and restaurant appliances, as well as kitchen and restaurant machinery and tools. As a result, you’ll be dealing with a variety of suppliers. When choosing a supplier, make sure they are reputable and sell high-quality products or items. There are many suppliers out there who can provide you with reasonable prices and high-quality products for your business.
04. Evaluate Costing
After arranging the vendors and suppliers, and having a good location for your business, the next thing to consider is evaluating the cost of operation for your business. There are majorly three types of cost that contribute to this:
- Food Cost
- Labour Cost
- Overhead Cost
Food cost includes the cost of all the raw food materials used in the final dish. This helps in setting the menu price for that particular dish. The next is labor cost, which is simple to understand. Labor costs include the salary of your employee and the third one is an overhead cost. It covers quite a vast aspect. Overhead cost includes rent of the place, expenditure on kitchen equipment and furniture. All the expenses related to licenses and marketing of your business should also be counted under this.
These cost evaluations help in the proper planning of a food business and help in ease the operation also. You need to be very careful about how much you spend on each of them.
05. Obtain Licenses and Registrations
Being placed in the last position should not mean it is the least important thing for opening a Food Business in India. In Fact approval by the government should be the very first step while preparing to set up any business. It is not any different for the food business too. There are a series of legally approved licenses that one should possess before cutting the ribbon of their food business.
In India, every business must register itself as a legal entity. Choosing the proper company structure is the most critical business-related decision. Doing so would allow your business to operate smoothly and meet legal requirements. There are different types of companies that you can register in India. To know them in detail you can check our page on Company Registration.
Business Name Registration
Business name registration is as important as company incorporation. The name you will be building and operating under now should be legally protected under law as well. This can be possible by registering the logo/trademark of your business. The positive impact that a trademark/brand name can bring to your startup/business is exceptionally high.
Read also: Benefits of business name registration
The Food Standard and Safety of India (FSSAI) is the legal authority that is responsible for the regulation of food security in India. All the FBOs must get a 14-digit FSSAI registration/license number according to their business activity and turnover. It is the main requirement of the food businesses dealing in manufacturing, storage, distribution, transportation, or retailing of food products.
GST refers to Goods and Services Tax which subsumes all taxes such as Sales tax, Service tax, Excise duty, etc. into GST. GST registration is required primarily if your annual sales are more than Rs. 20 Lakh. Even if your sales are less than Rs. 20 Lakh, we suggest that you voluntarily opt for GST registration.
MSME Registration (Optional)
By having the MSME certificate, any business can apply and get many benefits and subsidies from various government departments including Electricity, and also it is very important in the tender application process. The central government, from time to time, announces schemes to benefit MSMEs, such as the credit guarantee scheme.
Every shop and establishment in India has to obtain the registration certificate within 90 days of commencement of business
After obtaining all the licenses, selecting a proper location, type of food business, costing, arranging suppliers and vendors, and setting up your business you are all set to welcome your first customer with a warm heart.
Starting a food business in India is a great idea. It gives you the chance to cater to all those people who are as passionate about food as you are. Starting a food business in a big city like Delhi or Mumbai can be much more challenging than starting a small food cooperative in your neighborhood. But always remember
“The Greater the Effort, the Sweeter the Reward”
Starting a food business is hard. It includes lots and lots of paperwork. Getting a food business license in India is a Herculean task. It takes an enormous amount of paperwork, not to mention time and energy. But with Professional Utilities, all those licenses to comply with the guidelines of the government can be obtained at very ease.