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How to Start Retail Restaurant business?

How to Start Retail Restaurant business?
In past few year population of women who work in nine to five job has been increased, and this fact has direct impact on restaurant business. Restaurant is a place where people sit, take a meal and pay for it. But on the other hand it is place for relaxation and family gathering.
Restaurant is place for foodies. People who are passionate about food would like to start restaurant business. Today there are a lot of entrepreneurs entering the restaurant business because of the low entry barriers that the business has.
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With increasing disposable income, increasing population of youngsters, the growth of Tier II and Tier III cities an increasing urge to eat outside it is no wonder to increase in this industry and would continue grow in the year to come.
Entity of Business
The first step while starting any business is to choose nature of business entity you would like to register. You could choose any one of them. These options are:
  1. Sole proprietorship
  2. Partnership firm
  3. Limited liability partnership firm
  4. One Person Company
  5. Private limited company

At initial stage if you are solely interested in starting a business sole proprietorship is better option. If some of your friends are also interested in this business then partnership or limited liability partnership would be better.
If you want to expand your business or start at with high amount of capital than One Person Company or Private limited company would be better option.
As per different state policies there is requirement of licenses. But some general licenses are as follows:
License approving authority
Food Business Operator License
The state level licensing authority.
License for eating house
The city/state police headquarters and the police commissioner.
Fire security certificate
The officials of the Fire Department for the grant of the NOC.
Liquor/ Bar License(if you want to serve liquor)
The Excise Commissioner of the city/region of the state.
Lift Clearance
The electrical inspector of the office of the labour commissioner.
License for playing music / videos
Phonographic Performance Limited or Indian performing Right Society.
Environmental clearance
Pollution board of the city/state.
Insurance required
From any insurance company
Signage license
Local civic bodies like Municipal Committee or City Corporation.
Shop and Establishment License
From the State Chief Inspector of department of labour
Weights & Measures Department
The Weights & Measures Department.
Health/ Trade license
Municipal corporation or health department.
Business plan for Restaurant
There are two important reasons you need a restaurant business plan.
1. It helps you see big fat problems in your restaurant plan, like not a big enough population base or a bad location.
2. No bank in their right mind will finance you without any business plan.
In business plan you need to write about following:
  1. Concept of restaurant: Before you move onto next step you first need to define what kind of restaurant you want to open. Do you have a specific type of cuisine you plan to serve, such as Italian, French or Indian? Perhaps you want to specialize in one area, like a microbrewery and pub.
  2. Restaurant location: Location can make or break the restaurant. Before you run and sign a lease for your restaurant location, do your homework. Try to get location in the crowded area with plenty of foot traffic. It would be better to have location in locality where parking facility are attached.
  3. Choose restaurant name: Choosing a restaurant name is most innovative and fun step. It can be a reflection of your theme or location. For example Samosa Street reflects that this restaurant might serve variety of Samosas.

Service Tax
  1. Restaurant is taxable under the purview of service tax. As per Notification No. 26/2012 of Service Tax on Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises ( including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organizing a function) together with renting of such premises ha abatement of 70%. Hence rate of service tax on restaurant service is 4.5%.
  2. General Exemption under Service tax:
Small Service Provider: Vide Notification No 33/2012-ST, dated 20.06.2012 – Exemption to Small service providers having taxable turnover of less than 10 Lakhs and providing service other than by way of under a brand name.

VAT is levied by the state government on sale on any good or items and the food sold in restaurant is liable to be taxed under VAT registration from state authorities. Vat is levied by the state government and so each state government has different rates of VAT.

The food and beverage industry is one of the fastest industries in India. Opening a new restaurant is an exciting venture. In order to be successful, would-be restaurant owners should do their homework to find out more about the surrounding business landscape.

It would be great business idea.


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