BUSINESS PLAN TO START A FOOD BUSINESS

CONTENT OUTLINE

I. THE FOOD SERVICE INDUSTRY IN INDIA

II. MARKET ANALYSISIII. PROCESS TO START A FOOD

BUSINESS IN INDIAIV. BUSINESS MODELV. TECHNOLOGY STRUCTUREVI. RISKS INVOLVEDVII. FINANCIAL PREDICTIONS

THE FOOD SECTOR IN INDIA

The Indian Food Service Industry has witnesses a never-

seen-before growth in the recent years and has continued

to expand at a rapid rate.

With more people preferring food deliveries at their

homes and eating out, the food service industry has seen

many local, national and international players enter the

food market in India.

Even with thousands of food service providers spread

across the country, the rising customer demand and

increase in urbanization have paved the way for new food

businesses to enter the market, especially in the organized

food segment in the country.

Increase in number of Urban and Metro households. Increase in number of online users. Elevated eating-out experience and facilities. Entry of International QSRs. Rise in demand of niche market- authentic state

food. Popularity of Food Courts.

FACTORS THAT LED TO THE GROWTH IN INDIAN FOOD SERVICE SECTOR

MARKET ANALYSIS

3090

3375

3710

4090

4505

Market Size of India Food Service Industry (in INR '00 Cr)

2016 2017 2018 2019 2020

ORGANIZED STANDALONE

MARKET SIZE IN FY 2019

INR 106500 Crore

CONSUMER PREFERENCE ANALYSIS

Dine-Out75%

Take-Away14%

Order-in/Delivery

11%

CITY-WISE

MARKET SIZE

22%

20%

11%

47%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Mega Metros

Mini Metros

Other Tier 1 Cities

Tier 2, 3, and 4 Cities

STRENGTHSLargest growing industry in IndiaRemoval of entry barriers and easy

registrations.Franchise and collaboration

opportunities with established brands.

WEAKNESSES

High number of unorganised businesses.

Food quality and safety concerns.High operational costs.

OPPORTUNITIESDemographic, social and economic

changes.Government programmes that

support small businesses.Growth opportunity with online

business model.

THREATS

Unpredictable market circumstances.Chances of increase in operational

costs. Increasing competition from

international brands.

S.W.O.T. ANALYSIS OF INDIAN FOOD SERVICE SECTOR

PROCESS TO START A FOOD BUSINESS IN INDIA

TYPE OF

BUSINESS

Decide upon the

activities the food

service business

plans to undertake.

COSTS

INVOLVED

Finalise the initial

investment in the

business to manage

the costs.

MARKET AND

DEMOGRAPHIC

SEGMENT

Identify the right

location to start the

business and its

target audience.

OBTAIN

LICENSES AND

PERMITS

Obtain all the

licenses and

registrations to start

a food business.

BUSINESS

MODEL,

VENDORS, TECH

Decide the business

model, connect with

vendors and set up

the technology.

KINDS OF FOOD SERVICE BUSINESSES

Cafe

Casual Dining

Fast Food Quick-Service Restaurant

Cloud (Online) Food Delivery

Pub or Bar

Bakery and Patisserie

Fine Dining

Food Trucks/Kiosk

Juice Bar

Ice Cream Parlour

Catering

Home-based Local Food Network

Home-based Bakery

COSTS INVOLVED IN A FOOD SERVICE BUSINESS

LOCATION-

OWNED

LAND/RENTED

STAFF AND

TECHNOLOGY

EQUIPMENT AND

INTERIORS

FOOD COSTS-

INGREDIENTS

LICENSES AND

PERMIT

MARKET SEGMENT

The Indian Food Service Sector is categorised into:

Organised Segment Unorganised Segment

based on the income and spending abilities of the customer, and operational scale of the business.

Unorganized Segment includes roadside joints, stalls , kiosks

and dhabas .

Organized Segment comprises of Cafés, QSRs, Ice-Cream

Parlours, Casual Dining Restaurants, Fine Dining Restaurants, Pubs, Bars,

Lounges, etc.

LICENSES AND PERMITS NEEDED TO START A FOOD BUSINESS

While certain key licenses and registrations are

mandatory for all Food Operating Businesses (FBOs)

as per the Food Safety and Standards Authority of

India (FSSAI) Act, 2006, the additional licenses

needed to start a food service business vary for the

different kinds of food businesses.

FSSAI LICENSE

FSSAI License and registration is a 14-digit registration

number that is mandatory for all kinds of food businesses.

The FSSAI license or registration is granted by the FSSAI

Authority and certifies that the business adheres to all the

standards and measures relating to the quality and safety

of the food products.

There are three kinds of FSSAI License/Registration and a

food business is required to obtain the correct license as

per the nature and scale of the business, and the kind of

activities performed by it.

FSSAI License And Registration

Basic FSSAI Registration

State FSSAI License

Central FSSAI

License

BASIC

REGISTRATIONS

BUSINESS REGISTRATION

It is required to register the

business as a Private Limited

Company, LLP, OPC, Partnership

or Sole Proprietorship, and give

it a legal identity.

TAX REGISTRATION

The food business is required

to obtain tax registrations

such as GST Registration,

Professional Tax Registration,

TAN Registration, etc.

TRADEMARK

A Trademark registration is

important to protect the

brand name, logo, slogan, and

identity of the business.

S&E REGISTRATION

Shop and Establishment

Registration must be

obtained as per the state laws

in which the food business

would be situation.

ADDITIONAL

LICENSES FOR

A FOOD

ESTABLISHMENT

HEALTH TRADE LICENSE

Health Trade license certifies

that the food business meets all

the requirements and standards

set by the Health Department.

EATING HOUSE LICENSE

The business needs to obtain

the Eating House License if it

plans to serve food and

beverages to its customers on

the business premises.

LIQUOR LICENSE

This license is needed when the

business plans to serve liquor

on its premises, and is obtained

from the State Government.

FIRE SAFETY LICENSE

It is a No-Objection Certificate

from the Fire Department

certifying that the business

has taken all safety measures.

ADDITIONAL

LICENSES FOR

A FOOD

ESTABLISHMENT

LIFT CLEARANCE

This is needed when the food

business operates on multiple

floors and has installed a lift for

its customers.

MUSIC LICENSE

Music license allows the

business to play music, songs,

tracks, etc. without the worry

of Copyright Infringement of

the artist’s work.

ENVIRONMENTAL

CLEARANCE

This certifies that the business

activities of the food business

do not harm or cause indirectly

harm to the environment.

SIGNAGE LICENSE

This license allows the

business to display boards,

posters, signs, etc. in the

neighbourhood.

BUSINESS MODEL

A food business generally operates as a brick-

and-mortar store, where it prepares and serves

its food and beverages to its customers.

However, for businesses like home-based tiffin

systems, cloud kitchens, home bakeries, online

food delivery stores, and catering businesses,

the most suitable form of business model is a

hybrid business model.

HYBRID FOOD BUSINESS MODEL

A Hybrid Food business model would include a physicalpresence in form of a restaurant, pub, bakery, etc., alongwith a digital presence through a web-based or app basedplatform. This model requires the business to set up asophisticated technology framework to operate physicallyand digitally seamlessly.

A food business can also associate with a online fooddelivery marketplace to list their business and connectwith the digitally-savvy audience without the need to setup a comprehensive technology infrastructure.

VENDORS

AND SERVICE

PROVIDERS

VENDORS

The business needs to

connect with local vendors

for a regular supply of

ingredients and pre-packed

food items.

A Vendor Agreement is

suggested in order to

protect the business legally.

SERVICE PROVIDERS

Service providers for a food

business would include

logistics providers when

the business runs a delivery

service; ISPs for running its

online platform;

Technology providers to

develop its digital platform,

etc.

A Service Level Agreement

must be put in place to

protect the business.

TECHNOLOGY

When the food business plans to have

a digital presence, run a food delivery

system, to operate solely as a cloud

kitchen, a robust technology

framework is required.

TECHNOLOGY

FRAMEWORK

ONLINE PLATFORMS

The online platforms may include a web-based

platform as well as a mobile applications through

which the users can view the menu of the business.

ORDER PLACEMENT SYSTEM

The online platforms must have an order placement

system that allows the customers to place their

orders.

PAYMENT AND DELIVERYThe digital platforms must be able to accept online

payments and have a tracking system that allows the

customer to track the delivery date of their orders.

MARKETING PLAN

Digital

Marketing

Marketing on digital

channels like Food

Forums, Paid Ads, Social

Media, Online Discounts,

etc.

Physical

Marketing

Local promotions

through billboards,

handouts, coupons,

pamphlets, newspaper

ads, etc.

Registration on

Food Apps

Registering with Food

Marketplace Apps such

as Swiggy or Zomato to

reach a wider local

audience.

RISKS INVOLVED IN A FOOD SERVICE BUSINESS

OPERATIONAL

RISKS

HUMAN RESOURCE

RISKS

TECHNOLOGY

RISKS

ALLERGENS AND

DIET-RELATED

RISKS

HEALTH AND

SAFETY CONCERNS

FINANCIAL PREDICTIONS

Expected Market

Growth to INR 5,52,000

crore by 2022

29% Growth Projection in

OrganisedFood

Segment by 2022

66% Total Market Share

by Casual Dining

Restaurants by 2020

ABOUT CORPBIZ

Corpbiz is a technology-driven online platform that provides legal and advisory

services to businesses, be it small startups or large corporate houses. Corpbiz is a

renowned platform in India for all kinds of business-related services including

new business registration, government registrations, tax registrations, Trademark,

Compliance filings and management, to name a few.

Corpbiz is supported by a team of Chartered Accountants, Company Secretaries

and Lawyers, who hold subject matter expertise in an array of business related

services and can act as your guide and partners for your requirements relating to:

• Business Registration as a company, LLP, OPC, etc.

• Government Registrations such as FSSAI License and Registration, Trade

License, PSARA License, S&E Registration, IEC Registration, and much more.

• Trademark Registration under the right Trademark classes.

• Tax Registration such as GST Registration, Professional Tax/TDS/Income Tax

filing.

• Annual ROC Compliance Return Filings.

THE END