Fast Food Restaurant Business Plan – How To Start, Profits & Opportunities in India

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fast food and chinese reataurant business plan

Reasons to start fast food restaurant business

Have you ever come across a child who shuns fast food eateries and abhors the sight of candies? This is not even imaginable. With the growth of students pursuing higher studies and others being engrossed in their nine to five schedules, there is hardly any time left to cook. So what can be a better means of earning than serving quality foods to these fellows? Though the idea may appear difficult and challenging enough to overwhelm you, it can be very rewarding if executed properly right from the beginning. After all, people enjoy eating out with family and friends and fast foods are easily accessible, available and most importantly, affordable. So, if you can get it right, either through a well-known franchise or starting your own fast food restaurant business from scratch, you can expect people from all strata of the society to taste your food.

Fast food restaurant business is primarily a customer-driven market and you can take liberties in entering this market and choose your own level of competition! But, the purchasing power of the consumers is extremely high which implies that you can make huge profits if you can get your cards right. This industry is developing at an annual rate of 40 percent in India and there are numerous local and globally known entities who are trying to accumulate as much share as possible.

Segregating target consumers

Though you may think that people love fast food and they would come to try you out, the reality is that the switching power of the consumers is as high as purchasing power, meaning if you are not able to offer cent percent customer friendly foods and services, you can fall out of track. This is not meant to discourage you from your business aspirations but to warn you of the complexities of a seemingly simple market.

There are several niches in the fast food market and therefore you will have to choose the one that people in your locale would be interested in buying. If you are looking to establish a franchise of a well-known food brand, then your main responsibility would be to look for suitable suppliers. But if you are planning to build a brand of your own, then you shall have to decide your niche first: whether you would establish a Chinese restaurant or a Moghlai eatery, a roadside café selling delicious coleslaws and tempting smoothies or a warm and cozy nook offering mouthwatering momos and thukpas. The choice are endless and it is advised to decide your comfort zone first instead of trying to prepare and produce food of various sorts altogether.

Also Read : How To Start A Food Truck Business In India

Build your own business

When you have decided to take up on a franchise, you will have to follow the regulations implemented by the owner party. For instance, if you choose to take up a franchise for a leading pizza shop, you will have to use up their name, design the interior of the outlet in their chosen way and implement their terms and conditions in your business in terms of deciding the menu, price of different items and following the recipes.

Plus, you are expected to earn a share of the profit that you will have to make through the business. But this scene is completely different when you opt to build your own restaurant. You will have to choose a location that can potentially increase the exposure of your business and help you to reach out a wider circle of consumers and where your target groups of users are quite dense.

Your next consideration would be to make it attractive to kids and plausible for their parents. It should be a place where kids would want to take their parents and on the other hand, the parents should also be willing to buy food for their kids from your establishments. Though starting up a fast food restaurant business in India is not very easy, the attraction along with the high return on investment make it a perfect choice to begin with.

Register your shop

If your establishment is a small roadside restaurant then you would not require to register it with the governing authorities. But if you are looking up for something big that would incorporate a huge business plan, you are required to get it registered with the Food Operator License that works under the Food Safety and Standards Authority of India. This is a state-level license that is valid for 12 months and you will have to apply for the license again after a year. This is the time when you will have to arrange for funds and get the finance right.

A fast food restaurant would not be able to run successfully without a few necessary expenses like mortgage payments, building rents, condiments and raw materials supply, salaries for staffs and employees, insurance and advertising and marketing. So, this is the time when you should decide how you can raise the money for startup. If you are unable to put in all the money you need, you can seek aid of the various financial institutions, banks and government programs.

Rent an outlet

For starting a mid-range fast food restaurant, you will require an area of at least 350 square feet regardless of its location. And when it comes to choosing the location, factors like traffic volume, local law and customs, accessibility of the consumers, parking availabilities, lease terms and sales projections come to play. This is the time when you will need to have a solid business plan that would detail about how many employees you would need for cooking, serving and maintaining the restaurant, whether you will keep a provision for a washroom, whether you will allow your customers to see what’s cooking and how many tables your chosen space area can accommodate.

The minimum investment for a small scale restaurant would be about 15 lacs and in case you want something elaborate, then a fund of about 30 lacs should be ready to be invested. A viable alternative to this is to take the place on lease to tone down investment costs. The lease is normally renewed after every 5 years in India and if you are willing to get a faster and higher return on investment, you can consider obtaining a bank loan and pay back through any of the EMI schemes you are comfortable with.

Get the right equipment and hire staff

Once you have got the place right, your next step towards success is hiring professional chefs, waiters and attendants along with getting the needful tools, appliances, utensils for cooking, cutlery sets and design plates and bowls for serving. Your human resource should be dense in production and serving areas and you should handle the accounting and administrative part all by yourself. This is the time when you need to get hold of a responsible supplier to obtain your daily supply of needful ingredients, raw items and condiments in wholesale price.

Train your managers and other staffs and determine their pay scale and also take into consideration aspects like staff training, bonus and incentives and career opportunities of potential employees. If you are not willing to invest such a huge capital right at the start you can ask your friends and family to help you with the cooking, managing and serving. This will not only help you to save on costs, but your well-wishers would also be able to add their personal touch in all their works.

Coming to the needful equipment and utensils, it can be said that you will definitely need a refrigerator for storing cooked and processed food along with fruits and vegetables, a freezer to keep meat and fish, special ovens that should be custom-made to prepare the type of cuisine you sell, microwave oven, kneading machine, mixer grinder and soda and coffee machine if you want. The cooking utensils should be chosen in line with the niche you operate on and when it comes to choosing the serving plates and bowls, it’s better to be moderate instead of buying large plates that would make room for a splurge of food.

Market your business

You are set to be tasted now and this is when you should advertise your service to people far and wide so that they can get to know about it. One of the petty things to start with is to post some flyers in the locality and in high traffic zones so that you get noticed by your neighbours as well as those who pass-by your restaurant every day.  And you can even distribute handbills and brochures to people and offer some discounts or a free appetizer or a discounted combo meal to all those who come to participate in your grand opening. Though the cost of developing flyers and handbills is quite very low, their impacts in marketing a business are definitely laudable. But you will also have to consider the power of print media, television and internet-based marketing.

The competition among restaurant owners is fierce and you cannot afford to see your efforts sink down at this stage. One of the most effective means of marketing your restaurant online is by posting some in-focus snaps of lip-smacking foods in your social media page and it would surely draw the attention of some hungry eyes. You can also partner with the online food apps and get your Google+ and Geo targeted ads right and constantly monitor your presence in social media.

Profit margin

A recently published report by the National Restaurant Association reveals that the Indian restaurant industry is worth a huge amount of Rs 43 thousand crore and it is growing at a pace of 5 to 6 percent every year. Every big city in India is witnessing a new restaurant open each month though the bad news is that similar number of eateries close down every year as according to estimates 9 out of 10 eateries of the country shut down within a year of opening. So it is important to understand that running a fast food restaurant is quite like running any other business which puts special significance on accounting right from the beginning. The cost of overheads deems to be the fine line between the success and failure of your business.

Most entrepreneurs feel that they are losing out money inspite of getting enough sales owing to their inabilities of plugging in overhead costs of foods and employee salary. But if your restaurant is successful, you can keep up to 40 percent profit margins every month which shows that owning a restaurant business is comparatively more lucrative than real estate property investment which can give a profit margin of about 25 percent at the most.  Though you would not be able to see an accountable profit margin initially, you would have to aim your customer base and you can expect about 15 percent return on investment for the first few months which would rise slowly as per your efforts and determination.

Understand the weaknesses

Given all the positivity and advantage of running a fast food business in India, some people are lured into believing that restaurants serve to be a cool gathering place to enjoy with friends and family. But there are some grim realities that you would have to face once you get busy with your venture. The first downside is that you will have to forget quality times with your loved ones and you can hardly take the time out for a trip or participate in a social gathering with your family members. Then there are some people who think that if they start a restaurant, they would immediately start drawing cheques and this notion is completely baseless. Your staffs and employees are a transient group who would serve you today and look for prospects for a better tomorrow. And if stealing starts, it can spread as an epidemic till you face devastating economic consequences. With cash along with inventory going on a miss, your suspicion would turn the whole atmosphere bleak and blurry.

Exploit the scope and opportunities

Once you get a feel that your business is running well, you can consider to broaden the scope of your fast food restaurant. You may think of opening up a restaurant chain in the city first and then look to spread in areas outside the city. Now it is the decisive moment for some new ventures as you already have a support of a strong customer base that is ready to follow wherever you go and ready to try whatever you launch.

You can create some signature dishes and promote them to your loyal customers. You can start an online service as well so that you can reach out to those who are not able to reach you. You may even consider renovating the existing restaurant or open a new restaurant to a more posh area where you will cater to the needs of a different customer group. It is crucial to mention here that you must get yourself registered with the government as they would definitely notice your growth and you may head up for undesirable troubles and tension.

Threats your business is liable to face

With the rising number of people becoming aware of the harmful effects of fast food can lead to a time when there will be no one looking for fast foods that can be gulped in within a short while. Many are already aware of the trans-fat and monosodium glutamate content of the fast food which can lead to increased blood pressure and cholesterol levels and develop a risk of different kinds of cardiovascular diseases. People are slowly starting to understand that though no food is bad, but when something contributes to add up more calories than healthy nutrients, the issue of empty calories in contrast with nutrition becomes a serious problem.

As a result, many are looking for healthy substitutes, some are eating fast foods once in a while and others are carrying ready-to-eat healthy snacks and completely abstaining from unhealthy, junk foods. In such a scenario, if you don’t have something unique, something healthy to offer, you are heading for a sure doom though it would take quite q few decades. So, it’s better to stay ahead of time and mould your consumers by offering something healthily delicious within a price point that all can afford.

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