Feasibility Study to Start a Restaurant Business in India

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The Indian Food & Beverage (F&B) sector is presently sized at USD 15.2 billion, as per the analysis by The Indian Watch. Despite a homebound culture affecting the F&B sector during 2020 & 21, the industry has registered a steady CAGR of 3.8% over the past 10 years. With markets opening up and strong confidence in the wake of the vaccination drive, the F&B industry in India once again looks bullish. The footfalls in eateries are increasing and it is close to ~ 80% of the pre-covid levels. 

 

The ~ 70% of the market is run by unorganized players such as local small cafes, food trucks & stalls, Dhabas, local eateries and snack corners, kiosks, etc. However, the good sign is growing organization in the industry stemmed by a rise in per capita income, expansive middle class, growing trend of nuclear families, migrant workforce, changing lifestyle, etc. 

 

At present, the size of the organized F&B sector in India is close to ~ USD 4.6 billion, jumping at a CAGR of 10.5% from the 10 years. India’s organized F&Bs comprise Quick Service Restaurants (QSR) or fast-food centers, casual dining restaurants, coffee shops & cafes, fine dine restaurants, pubs & lounges, etc. Recent years have seen proliferation in India-based F&B chains such as Haldiram, Bikanervala, CCD, Sarvana Bhavan, Indian Coffee House (ICH), Sagar Ratna, Chai Point Chayos, etc. 

 

Likewise, international chains are also pivoting to India lured by the huge market potential that India offers. Recent years have seen mushrooming of international eateries such as Starbucks, Barista, McDonald, Subway, KFC, and much more.  

 

Importance of Conducting a Feasibility Analysis before venturing into an F&B Business 

 

Food has become the love language of the GenZ. A particular dish has the power to bring two very distinct and different people to a single table and munch on it. This is the simple implication of how a restaurant business will bring you profits and footfall more than ever. But, with this thought, you need to remember that just like you, many other people might also be on the same page and looking forward to investing in a restaurant business. So, how to stay a step ahead of them? Well, reach out to The India Watch and get your restaurant business’s feasibility study done. Come, let us share with you some basic questions that we answer via the feasibility services. 

 

1. What are the market area and the demographic profile (income levels, family structure, gender, age group, religion & culture, etc.?)

 

From the start of your business, you must know about your market area and the demographic where you can get the most footfall. You need to learn the income level of the people living in that area, their age group and gender, followed by the culture, language, religion, and other important aspects. Once you have clarity on these points, your market area will be clear and enable you to plan your restaurant's theme and cuisine served, along with all the remaining things.

 

2. How to develop the right concept that will fit in with the market area?

 

Conceptualization of the Business idea is equally important and ignoring it implies a huge risk. Developing the concept plays a huge role as it will aid you in planning the equipment required, staff members, utensils, seating, etc. If the mapping of the restaurant is abrupt, it might snatch away the customers, whereas if it is on point, then there will be no time that your cafe becomes picturesque. All this will depend upon what you serve and how you price it. So, get a note of that and dig more into the concept that you wish to sell.  

 

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Find the Right Location for the Restaurant Business? 

For a restaurant to function effectively, it is important that is located in a place which is conveniently accessible from roadways, metro, and other modes of communication. It should be visible from the highway and should have proper water and electricity supply. It should have a high density of passersby and the future of the surrounding holds high potential.

Learn more About the Competition 

It is important to learn more about the competition, both direct as well as indirect. Suppose you are planning to start a Pizzeria, then the direct competition will include other pizzerias, QSRs, fast food cafes, burger joints such as McDonald, Burger King etc. The indirect competition involves other restaurants and food joints such as coffee shops, Chinese corners, casual dining places, Indian snack corners, food trucks, etc. During the competitive analysis, it is important to cover a wide range of parameters such as pricing, taste of food items served, ambiance & interiors, the behavior of waiters and staff, location, table turnaround time, etc. Competitive analysis is generally done with the help of observation methodologies, as it gives fresh perspectives and insights.

Prepare Detailed Financial Analysis 

As with any other feasibility study, before starting a food eatery, restaurant, or hotel, it is essential to do a detailed financial analysis. The financial analysis involves financial projection, IRR, NPV, cost structure analysis, ratio analysis, ROIs, etc.

Layout Design of an F&B Business  

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A feasibility study can also offer valuable insights into the layout design of a restaurant or a café. To successfully operate a food business, it is important to cohesively design a layout with the right balance between the dining area, kitchen area, and other miscellaneous spaces such as office, storage, etc.

A restaurant has to be designed in such a way that the overall layout should draw the attention of visitors, make them feel comfortable while seated, ensure a smooth movement of waiters, etc. 

How The India Watch Can Help

The India Watch is a leading market intelligence, market research, and feasibility study provider. The advisory holds great expertise in the F&B and hospitality sectors. Its range of services includes and is not limited to

  • Prepare feasibility studies for restaurants, food retail ventures, cafes, eateries, etc.
  • Prepare a business plan and strategic intelligence plan for F&B, the hospitality business in India
  • Offer research services to food companies, restaurant chains, café chains, etc.
  • Conduct feasibility studies for franchise businesses.
  • For any further information, feel free to drop us a mail at info@theindiawatch.com
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