Starting your own food business company, is an alluring prospect for a foodie. Since India is a legacy with a rich culture and people with diverse taste buds, the thought of establishing a food company in India will never be depleted. The cultural heritage of India is reflected in the food of various styles, and the people here enjoy the treat. According to research, the food business sector is expanding at an exponential rate. The reported growth rate by 2024 is phenomenal, and the market is expected to reach $4.2 trillion.
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Step Wise Process To Start A Food Company In India?
Starting a food company is not a tough challenge, but it does necessitate assistance, as many food businesses fail due to poor planning and implementation. Setindiabiz’s refined team will assist you in any way possible to elevate your dreams and company to the next level. If you’re a restauranteur or want to be one, we’ve put up a 10-step guide to help you establish a food business and make your journey better.
Plan for Your Food Business
Develop a business plan and create strategies for the company. Conduct thorough research on any industry before investing in it. Determine your target customers, competitors, investors, food market dynamics, packaging, transportation, and so on. The four Cs that make any organization profitable should be eliminated: customer, consumer, channel, and channel. A food company’s plan should also include the following recommendations:
- Target Customer: Specify who your target customer is, such as children, toddlers, seniors, and so on. Learn about their preferences and how they behave in the market.
- Food business concept: Describe your business models, such as a full-service restaurant, food truck, bar, bakery, or coffee shop. Each of these business models has a distinct market approach and customer base. As a result, make sure to select a concept and develop strategies around it.
- Logo and Name: Create a logo and a name for your company so that customers can identify your brand.
- Define your USP. Describe how you differ from your competitors in the market. What distinguishes your company from others and affirms your point of competitive differentiation?
- Choose your menu: Choose your menu and food items with care, as they will define your brand. Discover the most recent menu trends based on your target market.
- Define your brand: Creating a brand name and logo is insufficient. To make your brand stand out, you must select images, music, and staff attire. It establishes the tone for your brand and allows customers to connect with you.
- Choose Location: Decide the preferred location for your business. Do some brainstorming and choose an appropriate location based on your target customers, competitors, accessibility to potential customers, and visibility.
Select Appropriate Business Structure
Select the business entity for your brand after establishing your strategic plan. Based on your scenario, there are a few different business entities from which to choose.
- Sole Proprietorship: A sole proprietorship is the most basic type of business, with one owner responsible for both the financial and legal aspects of the company. Your company does not need to be registered with the state as a sole proprietorship. You must also obtain the applicable licenses and permits. It involves less paperwork, is easy to start, and has no corporate business taxes. Further, a sole proprietorship can be a risky form of business as there is no liability protection. The proprietor liability to the business is unlimited, and hence we do not recommend a proprietorship firm; instead, for a single owner, a One-Person Company (OPC) is a better choice.
- Partnership: A partnership is a legal entity with two or more owners that operates jointly as a firm with joint and severe liability. This is like instead of one proprietor, there are two, and because they share capital/profits of the firm, they are commonly referred to as the Partners. We do not recommend a partnership firm for the poultry business, and instead, as an alternative, you may consider an LLP or a Private Limited Company..
- Limited Liability Partnership: LLP is an abbreviation for Limited Liability Partnership. It is considered a hassle-free sort of business and easy to carry out day-to-day operations. An entrepreneur can avail of many benefits if he/she chooses LLP to incorporate business. Like, such as lower registration costs, lower compliance burden, partners’ participation in business, and so on. We highly recommend the LLP if you are starting a poultry farming business.
- One Person Company: OPC is an abbreviation for One Person Company. One-person company is highly advisable for sole owners in comparison to going for proprietorship. OPC will offer you a business entity and limited liability. We will help you to make an OPC and provide all the legal compliance.
- PVT Limited Company: PVT Limited Company is undoubtedly the best form to start a business. It offers limited liability, separate legal entity, flexible, easy maintenance, etc. We highly recommend PVT Limited Company as it provides many legal benefits to the owner to protect the business.
Decide on the source of funding
It will take months for the company to become profitable. A business, on the other hand, requires a specific amount of money to begin with to survive and profit in the future. On the other hand, banks are cautious about lending to first-time borrowers. Furthermore, aside from banks, there are alternative funding options.
- Equipment Loans: These loans are simple to obtain and are useful if you need to purchase heavy equipment for your food business, such as a food truck. Equipment loans work on a simple principle: you get a loan to acquire the equipment, and the equipment serves as security. Simply put, if you don’t pay back the loan, the equipment can be retaken as payment.
- Loans from Friends and Family: Asking for a loan from your friends, family, or relatives is the safest alternative. Remember to write down and follow through on a loan agreement with your lender.
- Line of Credit: For a business that is experiencing a cash crunch for a short period, this is the best option for acquiring funds. If you use a line of credit, you will have access to a pool of funds. As and when needed, you can borrow from that fund up to the amount of that fund.
Purchasing equipment for your company will be the most expensive venture capital expense. You must either buy or rent this equipment, such as an oven, microwave, countertops, glassware, delivery supplies, steam table, dining arrangement, and so on, depending on your needs.
Design the Layout of the Unit
Creating a venue and working on its layout, as well as designing all aspects of it, is essential for your business. Divide your venue’s space into the dining area, kitchen area, storage area, restroom, office space, and reception. Create a layout that flows smoothly from one to the next. Create an appropriate ambience and interiors so that customers feel enlightened and embraced.
Set up your POS system
POS system seamlessly integrates with online food ordering and pickup. POS plays a vital role in online order management like print tickets, split checks, customizing table layouts, payment options, etc. However, the POS system will have different features and functions depending on your needs. For example, for a full-service restaurant, you need a different POS system than a bar.
Get License and Permit
All businesses require a license and authorization to operate. However, because you’re operating with something that people will eat, food licensing is extremely rigorous. Here are some of the permits and licenses you’ll need to establish a food business.
- Incorporate your Company or LLP. The basic thing to start is to set up a legal entity for your business; the best choice is to start a Private Limited Company or a Limited Liability Partnership. Setindiabiz helps entrepreneurs to register a company or LLP faster and in a very affordable manner.
- FSSAI “Food Safety and Standards Authority of India” Registration or License as per applicability is mandatory to start a food business.
- Local registration of units either as factory under the Factories Act or for smaller units under the shops and establishment act is necessary.
- If the unit hires over 10 employees, then the registration under the Labour Law is applicable, such as PFO, ESIC.
- GST: the goods and services tax is applicable on every supply of goods and services; hence the first thing is to get the GST Registration for the unit.
- There are other legal requirements as well, request you to consult us, and we will advise on the same.
Fix MRP for the Food Products
You now have all of the necessary business tactics and legalities. Set a price for your food products as the next step. Setting a price is crucial since it will help you make revenue. You should conduct thorough market research of your competitors’ offerings, including the amount of the part they serve in that pricing range. Also, figure out how much your product will cost by estimating the cost of the ingredients you’ll be using, such as oils, seasonings, and so on. It will help you figure out how much to charge for each food item. You can, however, change the pricing range to suit your needs.
The labour and staffing requirements vary depending on the business concept. A food truck, for example, may only require two people, whereas a full-service restaurant will require a cook, manager, waiter, watchman, kitchen staff, and waitstaff to clean up after them.
Marketing and Advertising
Employ a variety of marketing tools to promote your food business, such as a website, brochures, social media, a newspaper ad, and special discounts. Remember that word of mouth is the most effective form of advertising. So, wow your customers with your cuisine, dining, and hospitality.
How Setindiabiz can help?
Setindiabiz was formed with the vision of providing end-to-end compliance solutions for businesses. Thousands of customers rely on our assistance. We have qualified specialists on staff who can provide a broad spectrum of services to meet your needs. The consultants here will aid you with proper follow-ups to comprehend every issue related to starting your food company to avoid inaccuracy and ensure a smooth procedure. Contact us if you have any queries or need expert guidance.