Food catering business plan, license, permission, and cost involved: Food catering as a business is a profitable one but has too much competition. By following the careful steps and business plan you can get over all the competitors surrounding around you. The projected size of the catering industry is approximately 15,000-20,000 crores in India with an annual growth of 25-30%. Initiating a catering business not necessarily involves a higher initial capital which makes it money-spinning for people who are planning of starting somewhat own business.
To start with, think about the size of the business and target people. In case you are planning to begin a small-sized catering business, you must focus on getting orders for 12-50 members. On the other side, if you are sufficiently confident to begin a large-scale business, there is a need to manage your capital and organize on distributing it well properly.
Well-before starting a food catering business it is recommended to checklist and a step by step and make a checklist to ensure you have a hassle-free business.
A step by step guide to the food catering business in India
Make a proper business plan and finalize your niche
Your business prototype must revolve around your rented space availability and storage requirements. It must cover all your capital costs and expenditure for the initial few months. Only after recognizing your potential consumers and researching your marketplace, you must think about it.
In case you are planning to set up a full-time catering business, you require a permanent storage and cooking facility, sufficient plumbing for the kitchen. It will be an excellent idea to place some tables and chairs in the storefront for people to have food taste right away. In case you wish to develop a part-time catering business this will aid you to save money and you can even work on a few days in a month or especially on weekends. After arranging your kitchen, you must finalize your cuisine. Get reliable feedback from the clients and work on the negative ones for the improvement and growth of your business. This aids you to attract more consumers and pre-orders even before the business is completely organized.
Get to know about your kitchen area and rent
For a small-scale catering business with 20-25 people, the required kitchen area is around 70-80 sq. feet. For orders with greater than 25 people, the kitchen area requirement is around 100 square feet. Organizing a proper kitchen will get you more customers due to hygienic and efficient food making. The rent for such places would vary from area to area and place to place, whereas on average the rent for 100 square feet kitchen area would be approximately between Rs. 8000 to Rs 10,000, subject to its location that plays a major role.
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Sort out the sources of your capital
The next procedure is to look out for sources of your capital, and its effective utilization for on-site equipment, licenses, rental costings, and other expenses. Use your research abilities to explore the right sources for your finance. The sources could be other investors, from your personal savings or you can approach a bank. An average budget to initiate a catering business in India is approximately around Rs. 20 lakh, which comprises starting expenses like kitchen rent, licenses, transport, and other permission charges. This amount may differ according to your preferences. You must also consider smaller charges involved for table decoration, workers, napkins, etc. You may also approach a bank to acquire a business loan for which you must explain the business plan and amount generation strategy.
Essential equipment for food catering business
Once you have sufficient capital, you need to allocate in this on-site machineries for your kitchen which is basically storage cabinets, fryers, and refrigerators, a few burner stoves, stainless steel tables, and 2-3 compartment sinks are the main needs for a basic kitchen. Excluding the basic kitchen equipment, the below list of other things that you would need are-
- Cooking oven
- Serving equipment
- Coffee/beverage station
- Plastic wrap
- Garbage bins
- Disposable containers for storage
Find out your source vendors for your catering supplies
The raw materials needed for your business could be brought from nearby areas or locally from farmers or through a supply distribution agency. In the starting phases, you can use a wholesale retailer to buy your raw products, as it gains up on a lot of your money as well as they are fresh. Once you take up a few orders and start developing your network of agencies and supply vendors.
Licenses and permits for food catering business
We have now also included the criteria for registration of a catering business in India. Once you have these in handy, one can apply for a basic vendor registration from FSSAI, which would charge you only a hundred rupees per year. This registration is valid either for a year or to approximately five years depending on what period you select.
Once you develop your business and start growing your turnover to greater than 12 lakhs a year, you must approach for a few other licenses and permits. But before everything, you must ensure that you have an FSSAI license and should be aware of the below things.
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- The area of your business must be restricted to external pollutants.
- There must be good and acceptable storage in the most hygienic form possible.
- The counters or stalls should be proper and clean.
- The food that you will be using must be free from any contamination.
- Only freshly prepared food items must be used for delivery purposes.
- The staff that you appoint to help in your business must also uphold the proper behavior and personal hygiene.
- While cooking and delivery it is important to be free from contaminants or dust.
The licenses that are required here are. There are various licenses for different types of businesses, for example, eating the house, Check for Health Trade, shop, and establishment, NOC from the fire department, GST registration, etc.
- Food establishment license: This one is very important and it is necessary to have for all types of catering businesses. To have one, you will be having an inspection and you must ensure that your kitchen space and the working staff are well- prepared.
- Liquor license: An alcohol license is very essentials if you are serving in any events or parties that have alcohol.
- Other licenses or permits: Other state organizations and jurisdictions could impose some extra licenses and permits on the food and beverage segment. You may be aware of some quality Assurance and Health Insurance. Other vital licenses are water and fire licenses, sewage licenses, and permissions to keep people above 18 years as staff.
- Decide the menu
Menu selection has been one of the critical tasks for any food business. You must consider the raw material price, the quantity, the change in costs, and many more. Competition is also one of the important factors for consideration. It is essential to have an idea about your competitors’ charge for they are already in the market. Having a standard recipe aids in decreasing food costs to a greater margin by outlining the exact quantity of raw materials needed for each dish which also ensures constant taste and quality. A perfect POS system will aid you to achieve it. It maintains a standardized recipe for you.
Your cost per plate may vary according to demand and services added. In the starting, try to have a medium price and consistency in food taste and quality to have more orders.
Hiringadequate and proper manpower
Any new trade needs a supportive staff with dedication and hard work to emerge as a successful one. In order for that to happen, adequate and dedicated staff is required for your business. In the starting stages, you may approach some third party for servers and for cooking purposes, and then appoint permanent employees when you have enough finance. Try to keep the staff members in a uniform and make sure they are skilled and proficient. For an estimate, while initiating the catering business you must have around 10-12 members that comprise a junior chef, head chef, other cooks, delivery people, and menu designer.
Marketing strategies for your brand in the market
The vital role of marketing in a newly established catering business is inevitable. You must generate the potential leads, and it’s essential to make them your customers. Some of the significant but major marketing ideas are included here.
- Dealing the customers in a polite way
Ina the catering business, frequent cold calling with a blend of personal touch will definitely generate leads and spreads the information of your business very fast.
- Use powerful social media platforms like Instagram, WhatsApp, and Facebook
We must be up to date with the present trend as most millennials and event planners are using either of these platforms, for advertising and brand promotion.
- Create your own website and work on your blogs
Nowadays, the website is greatly needed in the catering business as well. This serves as a platform for your work for they get attracted to your business. This also serves as a trust element within clients.
From the starting of the catering business, networking is very crucial in this competitive world as many people in the present times are getting into the catering business. Thus growing the network by B2B promotions with event planners, cake makers, DJs, etc. is highly recommended to stand in the top few successful catering businesses.
Target your consumers
It is very important that the clients repeatedly opt you for their needs especially banquet halls and businesses. Email-marketing campaigns with different offers to present customers and referrals could be executed as it also helps in holding customers.
Use technology for getting orders and managing stock
To prevent human errors while noting a particular order, automation of your catering business stands as the best option in present times to avoid any inconsistencies in the future. Along with that, it aids in calculating the per day consumption and also manages the inventory. A smart catering application would assist you to streamline your functions and lessen manual labor to a major extent. Finally, as we have already exemplified that it is more than just cooking to initiate even a small-scale catering business. You need to be more careful and follow this detailed procedure for initiating your own catering business and with high profits.
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The cost involved in starting a food catering business
The budget required to start a food catering business in India is around Rs. 20,00,000 – Rs.25,00,000 which includes an initial few months of expenses, kitchen utensils rent, transport costs, the cost for licenses, and other required permits. This budget varies based on the set-up and the number of customers you target for.
Frequently asked questions about the food catering business
The below questions will clarify all the queries regarding the food catering business.
How to get an FSSAI license for a food catering business establishment?
You can get an FSSAI license for catering or food service establishments by logging into the website of FSSAI food license or you can also contact for the number +91-875-000-8844, to get more details.
What are the documents required to get an FSSAI registration and license to start a food catering business?
The documents required for food catering business FSSAI license includes
- ID proof,
- Address proof,
- PAN card,
- 2 passport sized photographs, and
- Certificate of incorporation
Is central or state licensing need in for catering or food service establishments?
Yes, central licensing is required for few units like airports, defense academies, railways, seaports, etc. which will be monitored and controlled by the central government. The turnover should be up to Rs.12 lakhs and these units have to acquire the license from the central government establishing food catering units.
What is the validity time of the FSSAI registration for food catering services?
FSSAI registration along with license, validity ranges from 1 to 5 years depending upon the type of application submitted.
How to renew the FSSAI certificate for food catering services?
For renewal of your food safety number renewal can be made on the license portal itself. The process includes making Form -C ready, and need to be uploaded. If you are not staying in Delhi or nearby areas then you need to submit a copy of the application signed by the authorized person, along with a copy of the fees paid receipt, even after applying online.
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