How to set up a restaurant/cafe in India: Insider tips ft. F&B Expert Pravesh Pandey
Published: 2024-10-13
Status:
Available
|
Analyzed
Published: 2024-10-13
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The craft bottled beer business in the alcohol industry is perceived as interesting by investors, but is predicted to not be a hit.
"Food wise, the craft bottled beers business in alcohol seems very interesting in the eyes of investors, but I think it is not a hit."
Pending
Breweries offering products in bottles and cans are considered overrated.
"The breweries that come in bottles and cans right now are quite overrated."
Pending
The Indian street food market has an annual turnover of ₹250,000 crore, presenting a significant opportunity to create a mass-market brand.
"I think the annual turnover of Indian street food is Rs 250,000 crore, which includes your Gul Gappa vendors, and you know, disorganized market, which is called right, so there is a huge opportunity to create a brand that becomes a brand for the masses, becomes a go-to brand, becomes a go-to brand"
Pending
A QSR (Quick Service Restaurant) can be started with an investment of ₹15-20 lakhs for a 300 sq ft space.
"QSR format lets say from 15 lakhs to 20 lakhs. You can start with 300 sq ft."
Pending
Opening a good cafe requires a minimum investment of ₹30-60 lakhs.
"If you want to open a good cafe, then the bare minimum requirement today, I think, would be between 30 lakhs and 60 lakhs."
Pending
Building a good fine dining restaurant can cost up to ₹2 crores.
"If you are building a good fine dining restaurant, then I think it can go up to 2 crores."
Pending
Constructing large restaurants and pubs, around 10,000 sq ft, could cost approximately ₹10 crores.
"if you have to build big restaurants and pubs, say 10,000 square feet, so an approximate number of 10 crores plus minus 10 crores."
Pending
Very large establishments (1.5 to 2 acres) in India could cost between ₹25 to ₹35 crores.
"the largest in India is the largest, there is a number between 25 crores to 35 crores for 1 and half to two acre places"
Pending
Bar businesses can achieve high profit margins, potentially reaching 32-33% at the EBITDA level for good brands.
"in formats like bars, but there is high impact also, the margin is also very high, some in good cases, good brands can go up to 32 33 per cent of profit margin, Abta levels I am talking about"
Pending
A ₹10 crore investment in a large restaurant with a bar and world cuisine could achieve a payback period of 10-12 months.
"if you have invested 10 crores in such a place, then if you leave the first two-three months, then 10 months or You get a payback period of 12 months"
Pending
The mortality rate for F&B businesses is currently 65%, attributed to owners lacking scientific intelligence and mistaking personal passion for business acumen.
"I think right now at 65, why? Brother, the challenge is that people do not know the difference between personal intelligence and scientific intelligence."
Pending
The cost to purchase an alcohol license in Karnataka averages around ₹3.8 crores.
"on an average ek license ka kitna cost hota hai to buy a license it is about 3.8 crores"
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Renting an alcohol license costs approximately ₹1.5 lakhs per month.
"we pay around 1.5 lakh per month to just give rent to the license to the person who owns it"
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Angel investors are available for seed funding, with many willing to invest between ₹1 crore and ₹3 crore.
"you can find angel investors everywhere. Okay, you will find many people with an investment of Rs. 1 crore to Rs. 2 crore to Rs. 3 crore."
Pending
The restaurant business is not highly scalable due to low entry barriers, susceptibility to copycat brands, and a lack of trust in intellectual property.
"Restaurant business is not a very scalable business model because there are a lot of entry level barriers in it. In the competitive landscape, anyone can open a restaurant. We can easily become copycat brands and there is no trust in intelligence."
Pending
Institutional capital is accessible for restaurant businesses, but primarily for those operating as chains or large-format establishments.
"if you do not build a chain, then institutional capital is available, but it is also available for large format businesses"
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Finding the right workforce for the hospitality industry is challenging and not easily achieved through common platforms.
"this kind of workforce is difficult to find on any platform as such"
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Employees in the hospitality sector seek financial stability (on-time salary/incentives), learning opportunities, growth (promotions), and a positive work environment.
"financial stability. They need salary on time and incentives on time. Secondly, they want learning. Thirdly, they want growth, they want promotions and fourthly, there should be a good fun-at-work environment."
Pending
Profit margins for businesses operating primarily on delivery can be as low as 15%.
"you are left with about another 15 per cent off profit specially on the delivery business"
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Delivery commissions charged by aggregators typically range from 20% to 24%.
"the standard rate varies between 20 to 22 per to 24 per cent on the delivery commission"
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Aggregators are charging approximately 5% on the transaction value when customers pay through their platform.
"they are charging around 5% off that transaction value"
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Restaurant owners, as product owners, should have the authority to set pricing, and aggregators should not control business decisions.
"the authority of deciding the pricing of the product lies in the hands of the product owner right and aggregator can not become a controller of the business"
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Third-party aggregators should clearly indicate if menu prices differ from in-restaurant prices.
"the third party aggregator should put a star badge in saying that prices are different than the menu price be up front be up front about it"
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High ratings (e.g., 4.9 out of 10) significantly influence consumer decisions to choose a restaurant.
"when you see a rating 4.9 out of 10 restaurants like that you will go there more and more and more and more"
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The prestige of a Michelin star, coupled with popularity, can lead people to patronize a restaurant and perceive its food positively, even if they don't entirely enjoy it.
"if you go to a Michelin star restaurant where there is a lot of people going even if you don't like the food, you will still go there and you still say the food was okay"
Pending
Credible individuals, such as influencers dining at restaurants, have a significant impact on consumer adoption and perception.
"if someone who is very credible does something you subscribe to it and say wow like influencers going and eating in restaurants"
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Limited edition products or experiences, such as those offered by restaurants or beer brands, are perceived to have higher value.
"anything which is limited edition has more value we apply this when we lunch at a restaurant we apply this when we lunch a beer"
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Roxy restaurant achieved an exceptional payback period of less than 13 months.
"Roxy, we can proudly say that the payback period was less than 13 months."
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A 'coming soon' strategy involving hype creation is crucial for pre-launch marketing.
"you will have to make a strategy for coming soon you will have to create an interesting right and its hype"
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A PR agency can be hired for ₹30,000-₹50,000 per month to secure 30 influencers monthly without direct influencer payment.
"You have to hire a good PR agency, let's say Rs. 30, 40, 50,000 per month, and then tell them to bring 30 influencers each month. And you don't have to pay any influencer."
Pending
Influencers with over 1 million followers are more expensive and typically require direct payment.
"those who have 1 million followers plus are more expensive, you have to pay them, they ask for it"
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Advertising is viewed as a form of brand insurance rather than solely for immediate return on investment.
"for me, advertising is an insurance of the brand rather than an investment to get the returns."
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During the initial post-launch phase (first three months), owners should be actively present on the floor, interacting with customers.
"In the post launch phase, you have to be on the floor and keep yourself physically active so that you work from morning till evening, talk to customers on the floor."
Pending
An open-source platform providing heat maps for any pin code in the country can show restaurant density by cuisine and order volume, aiding location selection.
"There is a heat map of any pin code in the country. It is publicly available. It is an open source platform where you can see which market has got how many restaurants in which cuisine and what are the orders which are coming in to the market."
Pending
Effective location selection involves analyzing the gap between demand and supply by assessing the number of existing restaurants and the potential customer base for a specific cuisine in a given market.
"it is also finding the gap between the demand and supply. We need to know how many Indian restaurants are there in market A and market B. It is important to know how many takers are there for that cuisine in market A and how many takers are there in market B."
Pending
Engaging with delivery drivers from platforms like Zomato and Swiggy can provide invaluable, on-the-ground insights into popular areas, top-performing restaurants, and cuisine trends.
"the most important hack is to catch the Zomato delivery and Swiggy delivery guys, ask them, I am telling the truth, if you see outside the restaurants, go outside the good restaurants, busy restaurants, you will find 81 people doing such delivery, ask them that friend, in which society the maximum orders are sent or apart from this restaurant, which other top restaurant When you pick up your order from a restaurant, you will understand what cuisine is being sold and at what rate."
Pending
The food industry will continue to thrive, with technology and robotics streamlining processes, reducing manpower dependency, and automating cooking.
"food, clothing and shelter are always sold. Yes, they are sold and will always be sold. The only thing that is going to happen is that due to technology, things are going to become easier. Processes are going to become much easier. Dependency on manpower will reduce a bit because your equipment itself can automatically cook things on time-based, temperature-based basis. Robotics is having a lot of influence."
Pending
The restaurant industry will experience consolidation, leading to the closure of poorly performing establishments and the survival of those that compete effectively with scientific intelligence.
"in the times to come, I feel that consolidation is going to happen and the quality of service of those restaurants which are not good will be affected. It is not good and those which were running normally are going to close down and the good restaurants which are competing and know what the game is, who are standing on their own and playing the game and playing the game with scientific intelligence, they will survive"
Pending
Small, less profitable bars are closing down and transferring their licenses to new establishments, indicating a trend of consolidation driven by profitability concerns.
"those which are closing down are transferring their licenses to new bars, right, at the end of the day, the bar license is the same, the bar license is the same, but the ones which are shutting down are very small, brother, now we are not doing business, we are making a profit of 2 lakhs, forget it, friend, let us get it done by someone else"
Pending
Helen's Place, a new casual and fun 'potato bar' with a world-class concept focused on 'A Joy of Living,' is in the pre-launch phase.
"The one which is coming soon, as part of the pre-launch formula, is to tell you that we are calling it Helen's Place. We are nice, it's a potato bar, a porch-looking place, and world-class, and very casual, and very fun, and the concept is basically on A theme called A Joy of Living which we have forgotten today"
Pending
When handling negative reviews, the key steps are to listen attentively to the customer's complaint without interruption, and to allow them to express their experience.
"Listen Apologize Solve the problem Thank the guest Listen to the customer Do not give your inputs Just give yours Just keep quiet and listen Listen Listen Let the negative customer The person who has had a negative experience He will want to talk to you Listen to him"
Pending
To effectively manage negative feedback, businesses should obtain customer contact information, address the issues, and then invite the customer back for a positive experience, potentially leading to a positive review.
"Get his number Take his name Call him back Tell him that you have fixed the training, you have fixed your product And invite back a new customer to your restaurant Go and invite and bring back a negative customer"
Pending