Planning to start a catering business in India? Great! You are going to be a part of the vast gourmet food services industry in India whose valuation is expected to rise to Rs.5,00,000Crores within a year or so. Sounds great, huh? And why not! A small catering business in India can be started quite easily if you follow the right procedure.
Now you might be wondering there are already too many players in this segment. So, will it be prudent to start a catering business in India? Isn’t the sector oversaturated for new entrants? Here’s my answer.
Will it Be Wise To Start a Catering Business In India ?
Definitely yes! As we all know India is a country of diverse culture and food habits. Indians love their food which is evident from the fact that food plays a key role in every Indian festival and event.
Be it wedding, marriage anniversary, kitty parties or birthday celebration, Indians look for reliable catering services to make the event a success. And of course, there are corporate events which also rely on a competent caterer to serve tasty cuisine on a budget.
So, without doubt, you can take your business plan forward but with some detailed planning. Let’s check out how to prepare yourself for a catering business in India.
Step 1: Do Research To Identify Your Target Market – The First Step to Start a Catering Business In India
Before you think of money or space or kitchen equipment, think of the market whom you plan to target. Do you plan to start a full-time catering business or take it as a part-time involvement? Will you be comfortable serving small family gathering or you have the confidence and resources to manage a corporate event?
As you do the research, keep in mind what kind of resources you can use to start the catering business. If you don’t have own kitchen space and adequate manpower then you have to look for renting option. Also you have to hire staffs as and when you get an order.
As a new entrant in this business, I suggest starting small. Rather than aiming a wedding where you may have to arrange a sit-down dinner/lunch for 100+ guests, look for smaller projects, e.g. birthday, engagement or housewarming party.
Step 2: Know The Costs of Starting A Catering Business in India
Now that you have defined whom you want to serve, the next important part to starting a catering business in India, is knowing the costs involved to start a catering business in India.
As I already mentioned, a proper kitchen space is the prime criterion of starting a catering business. If you have own kitchen space then it can help save cost. Else you have to rent a kitchen space, the minimum area should be around 80 sq. ft. Depending on locality and facilities, you have to negotiate the rent.
Also to start a catering business in India, you need the following employees, e.g.
- At least 1 or 2 chefs along with few helpers to prepare the food,
- Minimum 3 to 4 servers to serve the food and beverages
- Few attendants to clean and re-arrange the tables, wash dishes and run errands
As the business owner, you should be ready to play multiple roles of event planner and supervisor.
How A Majority of Small Catering Businesses in India Operate?
Since arranging a kitchen can be a costly proposition, most small caterers operate this way.
If the order is for 10-30 persons (e.g. birthday, kitty party), they often use own kitchen space or rent one on usage basis to prepare food items. These cooked items are then delivered at the client’s place at the specific date and time.
However for bigger catering orders, if they need to prepare food for more than 40 persons (e.g. wedding, picnic or corporate event), then they prefer to carry necessary cooking utensils at the venue. The food is prepared and served fresh and hot. In this case, however the catering company needs to incur additional cost related to transportation.
To hire catering staff on a temporary basis, many explore the online hiring platforms or get in touch with hotel management institutes. This trick definitely helps save cost.
Step 3: Know How to Finance Your Catering Business?
There are several options available. You need to choose the one based on business funding requirements. Mostly small catering businesses in India rely on self-funding to finance the business initially. As the business expands, they look for business loans or unsecured loans.
Getting a bank loan in India is really not so easy. You should prepare yourself to face the lender in a professional manner.
Right now the Government of India has come up with different loan schemes to boost small business. You can check them out here.
Step 4: Complete The Registration Formalities
You need food license to operate any type of food business in India. Now you might be wondering what’s the need to complete such registration formalities since you plan to operate the business on a very small scale?
Simply speaking, the Government of India has made it mandatory to acquire catering business license, no matter how small your business is. Yet, if you decide to start a catering business in India without proper license, then you may need to cough up a penalty of 2 lakhs! And it is going to hurt your business reputation too. Surely you don’t want that?
So, what are the specific registration requirements to run a food service business in India? Read this article to get complete details.
It is not that expensive to get the basic license for a food business in India. However, you need to take care of few things before applying for the FSSAI license.
Your business location (which you mention during the registration) should be clean and pollutant-free. The place needs to be easily accessible, in case any emergency or disaster arises. Also, you need to show sufficient storage space to ensure food items are stored properly and the preparation is done hygienically. Also you need to declare that you prepare and deliver freshly prepared food, free from contaminant.
Step 5: Acquire The Necessary Equipment And Supplies To Start a Catering Business in India
However the requirement varies depending on the type of catering services you plan to offer. Let’s assume you plan to provide customized services to kids’ birthday parties. Then you need to invest in a good quality commercial bakery oven.
Initially you can purchase specific equipment and utensils which you will need the most. Rest of the supplies can be hired on an as-needed basis.
Step 6: Think of Cost Effective Ways to Acquire Raw Materials
If you want to successfully run a catering business in India, then you have to maintain the standard. Because you are likely to face competition from already established catering companies in your locality.
To make your presence felt, you have to be careful about the quality of food which in turn means you should take extra care to buy veggies, spices and groceries from trusted vendors only.
Usually small catering business owners prefer to buy raw materials from local markets and grocery stores. This is not a bad idea, if you trust the seller or vendor.
Later as your business starts growing, you can expand the supply network by including more grocers and vendors. You can explore the online grocery shopping option as well. This way you can grab attractive discounts on bulk purchases.
Step 7: Think of Your Specialties and Plan the Menu Accordingly
“What’s your specialty?”
“Does people praise any special dish prepared by you?”
I personally know many catering business owners who proudly proclaim their special dishes like prawn masala curry, butter chicken or mutton roast!
If you have any such secret recipe, then you can highlight those dishes while suggesting a menu to your clients. Often customers fall for such special dishes and don’t hesitate paying few extra bucks to treat their guests with the delicacies.
Step 8: Let People Know That You Have Started A Catering Business
Now that your catering business is ready to take off, it’s time to do some marketing. Spread the word in your circle and beyond that you have started a catering business. Let them know exactly what kind of services you offer, what’s your specialty, and so on.
But how do you do that? Here are few suggestions to market your catering business in India:-
- Start with your close circle, i.e. friends, relatives, office colleague, gym buddy, neighbor and so on. Do it wisely without sounding too desperate!
- Request reference from existing clients. If they are happy with your catering business standard and price, they will gladly introduce you to other prospective customers.
- Print and distribute brochures and leaflets.
- Carry your business card always. Look for appropriate opportunity to give your business card to a new friend or acquaintance.
- Spend some time to network with local grocery store owners, cake shop owners, event planners and decorators, etc. Let them know how they will benefit by referring you to their clients. After all, they are running a business too and are most likely to be drawn to your offer, if they find it rewarding enough.
- Make your presence felt on social media, even if you plan to target local customers only.
Step 9: Be a Tech Savvy Entrepreneur to Attract Clients
Mostly small catering companies in India, operating locally, stil prefer to connect with clients the traditional way. Many still visit customers with hand-written menu and bills or finalize the deal over a phone call.
In such a scenario, if you can use technology to send the menu card and prices, and then take orders online along with special requests, then it will surely impress the tech-savvy new age customers!
You don’t need to be a tech guy to use some of these business apps which let you manage inventory, and other resources in an efficient manner. Also these smartphone apps eliminate critical human errors which are so common in catering business.
As is evident from the above steps, lots of groundwork is involved if you want to start a small scale catering business in India. If you are not confident of handling everything on your own, then it is better to seek some legal guidance, especially related to the registration process.
Also it is important that you develop an entrepreneurial mindset to start a catering business in India and run it successfully!
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