The Indian restaurant industry is flourishing and has seen growth in the past few decades. The country is a prime destination for gastronomic experiences, and the number of restaurant openings is increasing steadily. India welcomes entrepreneurs with open arms and facilitates their operations by laying down rules that suit their business needs with certain conditions attached, like preferential tax rates and other incentives. The profitability of an Indian restaurant business is dependent on the quality of food served, competitive pricing, solid customer base, strategic alliances with other trade chains, efficient operation, and proper management.
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How much does it cost to open a small restaurant?
Opening a restaurant business in India is an expensive affair primarily because of the high cost of real estate in various cities and towns. The expenses for opening a small restaurant range from six million to twelve million INR depending on the location, available raw materials in the market, and the type of cuisine served. Completely equipped restaurants with furniture and other equipment cost more than simple eateries. Small eateries with a seating capacity of twenty to thirty can be opened with an investment of six million INRs and can seat around forty to fifty customers.
Restaurant kitchen setup cost India :
The kitchen in a restaurant is one of the most critical and expensive components because it is used for preparing food and beverages. It is a crucial area of the restaurant and needs to be well designed and outfitted with the latest technology. The setup cost for different kitchens ranges from ten thousand to one hundred thousand INR depending on the size and technology.
Opening an Indian restaurant involves :
1. Rental costs :
Rental of commercial premises in cities and towns is an expensive affair. The cost of renting a commercial premise for a restaurant ranges from 60,000 INR to 100,000 INR per month and depending on the location and size of the restaurant and other conditions, and rental prices can vary by more than 10 to 15 percent.
2. Licences cost :
The cost of obtaining the licence required to run a restaurant varies from city to city. It ranges from 12,000 INR to 25,000 INR. It depends on the type of food being served and the location of the establishment. The licence also includes service tax, VAT, and registration charges in cities like Mumbai and New Delhi.
3. Furniture and fixtures :
Besides tables and chairs, Indian restaurants must invest in equipment such as cash registers, coolers, tills, lighting systems, kitchen furniture, and more. The cost all the restaurant equipment that is purchased at once costs about three million INR. The amount depends on the type and size of the restaurant.
4. Construction cost :
Building a new restaurant is not a simple task and requires expertise and experience to design and execute the work. Building a restaurant with an ample parking area costs around 20,000 INR per square foot. The construction cost also depends on the nature of the building, location, amenities like water and electricity supply, and type of building material used.
5. Marketing cost :
The cost of marketing and advertising is also high due to saturation in the industry. The price ranges from one million INR to two million INR and is usually managed by the owner of the restaurant himself.
What licence are needed to start a restaurant in India?
1. Shop and Establishment License :
The cost of acquiring the licence required to run a restaurant is around 5,000 INR to 15,000 INR in India. It depends on the type of food that is served and the location of the restaurant.
2. Liquor Licence :
Obtaining a liquor licence is mandatory to serve alcoholic beverages in a restaurant. It costs 50,000 INR annually and includes taxes for liquors such as whiskey, rum, gin, and more.
3. Music Licence :
To play music in a restaurant, one needs a music licence. The music license costs vary from city to state and state to state. It ranges from 2,000 INR to 10,000 INR.
4. Service Licence :
To serve food and beverages in restaurants, one needs a service licence which costs 15,000 INR per year, including taxes. The type of service required determines the cost of the request, like a hotel or a bar.
Conclusion :
Opening an Indian restaurant involves a lot of investment and requires a reasonable amount of working capital to sustain initial losses in the first few months. The profit earned from the restaurant business depends on the popularity of the eatery and the strategic alliances with other trade chains. Investing in a restaurant business is advisable only if you have prior experience in the same or if you want to diversify your investment portfolio.
