It is easy to see and understand that it is not an easy task to start and set up a new Food and Beverages (F&B) business from scratch. Having a conceptual idea for a restaurant is great, however, it is not sufficient to get you started. There are considerations that a restaurant has to consider to ensure a profitable venture. One of these considerations is deciding what type of restaurant or theme of restaurants/ food business format you are going to start with. This, along with many considerations contribute to form high-profit food business ideas which we will discuss in detail in the next few sections.
Before starting any of the activities of your new food business in India, it is absolutely necessary and statutory to get your business an FSSAI License to get you underway with all business activities related to food and drinks.
Let’s quickly run down through the restaurant ideas with high returns and margins.
High-Profit Food Business Ideas
Many accomplished restauranteers proclaim that the more specific and small the concept of a food business, the more revenue, traction, and footfall a restaurant will end-up having. Hence, it is of great importance to pick and choose a well thought out theme to your restaurant,
Quick Service Restaurant
Quick Service Restaurants (QSRs) are basically low investment, high-profit generation restaurant themes which have been popular in India for the past 15 years or so. All things said and done, a QSR would require an investment amounting to Rs. 15 lakh. Most of this budget, however, has to go towards Market Research as well Marketing Operations. In a QSR environment, the location of the restaurant is of paramount importance because restaurants themed as QSRs are heavily reliant on the large volume and frequency of orders. QSRs have to be setup .in densely populated areas, markets with high footfall, highways, airports .office complexes or even in university areas. These types of restaurants mostly serve fast food since they deliver quick service as their food is already pre-prepared. The number of employees required for this type of restaurant is also less in number since QSRs are most of the times self-service restaurants.
There’s only a slight hiccup for QSRs that is it takes time for them to really hit the ground running and start returning some profits. Many experts speculate that the time for break-even of a QSR is near about 2 years. This is basically because all the profits and returns from a QSR go towards expansion of the business.
This patience and grit will pay off in the future for the restaurant owner because it is estimated that by the time the year 2021 comes around, the chain market size of QSRs in India will amount to a staggering Rs. 24,665 Crore Rupees, which can only be a positive indication.
Casual Dining Restaurants
Casual Dining Restaurants are actually a really great concept as it combines some features of a fine dining experience and combines with the relaxed and carefree dining experience of a QSR and provide with you a relaxing and soothing eating experience. The investments for a Casual Dining remain the same as for a QSR amounting to around Rs. 15 Lakhs. However, contrary to QSRs, the casual dining restaurants can achieve their break-even mark within a time-frame of about 18 months. In addition to this, casual dining restaurants have an enormous profit margin of about 20-25% which makes them among one of the most profitable F&B business that restauranteurs can go for. In addition to the huge profit margins, Casual dining restaurants do not even require to a high-end posh locality for them to thrive they need to be appropriately set up in high footfall areas malls and shopping areas with parking spaces. The area for such restaurants should not ideally extend beyond 2000 sq. ft. A list of licenses for restaurants includes Fire Safety Certificates, Shop Establishment, Police Eating House, Local Municipality authority permission with seating capacity Fssai Registration, Liquor license, and GST registration.
Casual dining restaurants form the core of the F&B industry with around Rs. 4000 crores of the 9,500 crore revenue generated from these restaurants. The market share of these restaurants has also risen to almost 40% since 2013, giving this restaurant theme a positive implication for all future as well as new incoming restaurant owners. No more than 15-20 employees need to be hired to make these restaurants into a fine dining experience which fills owners pockets with profits and happy customers. Average cost per meal is Rs. 500-1000 (for two).
Food trucks aren’t new to India however, they have been raking in a lot of attention from all groups of economic classes. The food trucks come with an immaculate amount of potential for increasingly high returns and profit margins.
Read: Registering for your Food Truck License
The only high-cost investment with food trucks is the cost of purchasing the vehicle. This cost of acquiring the vehicle could amount up to a maximum of Rs8-10 lakhs if the truck is a second-hand purchase. However, the upside to owning a food truck is that you only have to employ about 3-4 employees to successfully run your food truck with increasingly high-yielding results and returns.
Licenses for food truck include Fire Safety, Shop Establishment, NOC from RTO and Municipal Corporation, FSSAI mobile vendor license and Kitchen Insurance.
Of course, every restaurant needs to target areas with high footfall, however, with food trucks, you’re not confined to one location and can move around and target various highly densely populated locations to get the most out of your business. The average profit margin for food trucks amounts to around about 50% which is incredibly high making this a prime choice for the restaurant theme. Of course, margins are subject to locations as well as the season. In addition to outrageous profit margins food trucks format can you help you break even in a very short time frame of about 6-8 months.
Cloud kitchens are the new guys in town for the restaurant business and are quickly becoming one of the most high-profit food business ideas. These types of restaurants are extremely low-cost yet very high return types. Nowadays restaurants are opting to abandon stores and outlets and just opting to keep a kitchen which delivers food to customers through online ordering or order calls. The investment for cloud kitchen is almost next to nothing as compared to the counterparts discussed above. The total investment for a sky kitchen should ideally not extend beyond Rs. 3 lakhs to set up.
One of the most intricate and complicated steps for these kinds of a restaurant is the marketing part. The marketing for such restaurants either has to be done through virtual online marketing methods or through offline guerilla marketing techniques. Requires a very fewer number of employees and the location of the kitchen can be done anywhere convenient.
If marketing has been done well enough, the influx of orders can be expected to be high in volume as well as frequency.
Thus, these 4 models of high-profit business ideas are sure to skyrocket your business to new heights. Consider switching to or starting your food business with these models. Happy restauranteering!
Oh! and do not forget to acquire your FSSAI License before starting. You can call us +91-8750008585 to get your FSSAI registration within the fastest time frame.