If you’ve ever dreamt of starting your own small fast food business then we don’t blame you. There is a lot of demand for fast food in India. In fact, fast food is among the foremost go-to options when it comes to dining out or ordering food. Not just India, most people all across the globe love this kind of cuisine and have serious cravings for it over and over again!
For starters, fast food is way more affordable than fancy dishes or five-course meals. Next, it usually doesn’t take much time to be prepared and customers are served their orders in a matter of minutes. A small fast-food eatery is the perfect place for a quick bite-you get great food at low prices! These places are also referred to as ‘Quick Service Restaurants’.
Running a fast food restaurant can be highly rewarding. With more and more people in India shifting to cities, there is a higher number of potential customers for restaurants. And with the various kinds of Indian fast food that we have, everyone has a couple of dishes that they simply can’t resist. From Vada Pav to Kathi Rolls, Indian fast food is bound to make anyone’s mouth water. Global players such as KFC or Domino’s have also taken the fast food industry by the storm. With this kind of food, restaurants usually offer competitive prices. When customers are offered their favorite dishes at prices that don’t leave their pockets empty, they’re bound to come back for more.
It doesn’t take an enormous amount of investment to open up a small fast-food restaurant. You don’t have to go out of your way to arrange for mind-blowing décor or exquisite cutlery. It is much easier to find staff and train them. You don’t need to worry about getting a chef who has been trained in the best school either. All you need to focus on is providing quick service and quality food. Another edge that a fast-food business has over conventional restaurants is the fact that it is considered a recession- free business. Compared to fine dining restaurants and posh cafés, the cost difference in fast food restaurants isn’t altogether very high. So, if a huge change takes place in economic policies or the financial situation of the country, it doesn’t harm these restaurants too much- unlike their pricier competitors.
Costs of Opening up a Small Fast Food Business
If you’re pondering over the idea of opening up y0ur own small fast food business, we’re here to help you out. Before you dive into it, it’s best to know the financial side of setting up the business and what to expect.
Quick Service Restaurants don’t require a large sum of investment, especially compared to conventional restaurants. You have to account for basic factors such as rental costs, staff, and maintenance expenses but you don’t have to spend a great deal of money on décor or lavish seating.
A Quick Service Restaurant can be set up with an investment of Rs. 5 Lakhs. Although this figure might seem incredible, it is possible! Here’s how:
This is a recurring cost that you will have to account for. Generally, this cost takes up most of your profits too. Your fast-food restaurant must be located in an area that is quite populated and frequented often by the masses. If your location is a place far off from the hustle-bustle of the city, your restaurant won’t receive much recognition. Keep your target audience in mind and try to be located close to it. It is best to have a restaurant located on the ground floor that can be easily spotted by someone looking to grab a meal. You need to have a space of about 500 square feet to accommodate your kitchen and counter. Keep the counter area and serving zone in just 100 square feet and use the remaining space for seating. Approximately, the rental cost for a space of this size in a suitable locality should come to about Rs. 40,000 to Rs. 50,000 per month. It is best to be prepared to submit one or two months of advance payment as well.
Having advanced kitchen equipment is an integral part of running a restaurant. With the right kind of kitchen equipment, operations can take place quickly without much error or wastage. For a Quick Service Restaurant, you will have to buy equipment such as refrigerators, microwave ovens, cookers, tandoors, gas pipelines and so on. All of this depends on the kind of cuisine you’re offering. If you don’t want to spend a lot on equipment, you can consider checking out second-hand equipment that is in perfect working condition too. But when it comes to utensils, make sure you don’t compromise on quality. Initially, it can cost you around Rs. 2.5 Lakhs to set up your kitchen. Once you’re set to commence operations, you will only need to spend money on the raw material you’ll need every month such as vegetables, oil, and spices.
Marketing your restaurant is a crucial step. In today’s day and age where social media has everyone glued to their phones, you need to put in quite some effort to get people talking about your restaurant. There are many ways you can market your small fast food restaurant to create an ideal brand image. First, start by creating a logo for your restaurant that catches the eye. Spend some time trying out options and asking friends and family for their opinions. Next, design your menu and restaurant website with a theme that corresponds with your brand image. Your website must be user-friendly and customers should be able to place orders in the least number of clicks possible. Put up posts and stories on Instagram and Facebook regularly. Make sure you partner with Instagram influencers and food bloggers. In this way, millions of people can learn about your newly opened small fast food business. Apart from partnering with bloggers, you also have the option of putting up paid ads on social media. You could look into getting pamphlets printed too. Make sure your restaurant is listed on websites where people can review restaurants and leave ratings as well. While you’re still starting, you can expect to spend about Rs. 40,000 on marketing.
For a fast food business to run smoothly, you need to have well-trained staff who can handle the ups and downs of running a restaurant. For a small fast food restaurant, 3 or 4 employees are required to be present in the restaurant at all times. This includes at least 2 chefs who know well about the kitchen equipment and food, along with how to run the kitchen on their own. They should be able to instruct the other staff and ensure coordination among all the employees. You also need an employee behind the counter who are well-versed with the POS system and how to take or modify orders. Usually, the average salary of a chef is around Rs. 14,000 to Rs. 15,000 while the other people who assist the chefs get paid around Rs. 6,000 to Rs. 8,000. You will also have to find suitable uniforms for your employees (you can choose to save costs here in the beginning). Basic white uniforms, aprons, and hairnets should suffice. Set aside a sum of Rs. 7000- Rs. 8000 for the purchase of staff uniforms. Make sure you get your restaurant’s logo printed on them too!
In our country, there are several restaurant licenses that you need to have if you want to run a restaurant, even a small one. Before you start your own business, you need to make sure you’ve applied in time for all the permits and licenses that you will need. Nowadays, most licenses can be applied for online and the entire process doesn’t take a lot of time. Depending on the state you’re located in, you might have to get in touch with local authorities for certain permits too. You will need a food license issued by FSSAI. This is the most important license involved in opening up a restaurant. Having an FSSAI license ensures your customers that your food comes under the purview of food safety standards in India. Further, you will need an Eating House License that is issued by the Police Commissioner of the city that you are in. You will also have to acquire a Shop & Establishment License for your fast food business within the first 30 days of its opening up. A Fire Safety Clearance and Certificate of Environmental Clearance are two other permits required to prove that your business does not impact the environment adversely. All in all, licensing should cost you about Rs. 18,000. You will also have to apply for renewal of your licenses from time to time. For instance, an eating house license is usually valid for three years.
Over the last couple of years, there have been many advancements in the domain of food tech. Having a quick and efficient Point of Sale System is one of the most important aspects of running a small fast food business. It records every transaction that takes place every day and all the information that is logged into it is stored safely. This data can also be used in the future for performance evaluation or to chalk out loyalty programs for customers. Restaurant POS Systems today can also be accessed from different locations through one’s mobile phone. A huge part of daily operations is automated entirely and the scope of human error is largely reduced. So, you don’t have to be physically present in your restaurant to check up on daily events. All in all, this should cost you somewhere around Rs. 25,000 to Rs. 30,000.
Furniture and Fixtures
For a small Quick Service Restaurant, you don’t have to focus too much on making it look fancy. Instead, you need to ensure that you find sturdy furniture for seating and suitable lighting depending on the space you’re in. Don’t bother with finding beautiful decorative items or lamps. Opt for the more practical things that you need in the restaurant. Make sure the color scheme you pick is simple and one that customers can associate easily with your restaurant. For furniture and fixtures, you will have to spend about Rs. 20,000 to Rs. 25,000.
When you’re setting up your restaurant, make sure you keep some money aside for any unforeseen expenditure that might pop up in the future. This could be malfunctioning of appliances, renovations, repair or other emergencies that might occur. It is best to have a designated sum of money that you keep in store for a rainy day.
Ready to start your small fast food business?
Opening up a small Quick Service Restaurant is an extremely fruitful experience to have, without the burden of having to spend a lot of money. Make sure you have a comprehensive business checklist in place before you start your fast food restaurant. Get in touch with other people in this field as well as professional consultants so that you have a better idea of what to expect. With a solid restaurant business plan and an innovative menu, your endeavor is sure to be a success.