FSSAI License

Food Catering Business in India – An In-depth Synopsis

calendar19 May, 2020
timeReading Time: 8 Minutes
Food catering business in India

The demand for food catering business in India is towering high. Those who are driven by the desire to initiate a catering business in India should not worry about the investment at the initial stage due to the low investment of capital at the initial level. Utilizing your cooking skills and investing them in starting a catering business is not a bad idea. If you think that catering falls under the category of vast business that serves meals into corporate parties or in wedding halls, then you might not have heard about small catering business.

Starting a small scale food catering business in India is free from the pressure of managing higher investments. By getting the order for 20 to 40 people, you will be able to accelerate the small scale catering business. On the other hand, a large scale catering business requires a proper business plan and managing huge capital and distributing it as well.

Current market trends suggest that in the coming years, the establishment of a large number of malls, schools, companies, colleges, IT parks, factories, and hospitals will widen the scope for food catering business in India. Catering businesses are playing an indispensable role in boosting the economy of the nation by creating employment opportunities for lakhs of people all across the geographical border of India and by extending their services to several corporate houses, factories, malls, hospitals, schools, and more organizations.

The cheapest and the best way to begin your journey of starting a food catering business in India is to commence this business from home. Initially, you can make small strides, and after establishing your business, you can take progressive steps to upgrade your business and make it a large venture.

How to start a Food Catering Business in India?

Before starting your food catering business in India, you should prepare a checklist in advance without missing out on anything. Having a pre-business plan would make things easier for you. Follow the guidelines given below to start your food catering business in India.

Market Research and Knowledge about the Competition Level

Before commencing your food catering business in India, you must conduct market research to identify the level of competition around you and the kind of services others are providing along with their adopted strategies. Collect information about the catering services that your competitors are offering, what their menus include, and what makes them different from the crowd. Create a note of unique items that others are not providing and make these items your unique selling point.

By looking at the prevailing competition in the market, you should set prices for your items. It would be best if you think about the profitability factor, along with price evaluation. Conduct a survey and ask your near and dear ones to give answers to the questions like which are the factors that they want in a catering service provider, and what make them place their trust in a caterer. With the help of market research, you will be able to figure out the ways through which you can help your business ascend high.

Develop a Business Plan and Identify your Cooking Niche

The development of a business plan is crucial for the growth of your business. Your business plan must consider all investment costs along with the expenses. Penning down a business plan on paper leads to the proper execution as your idea would get blessed with a well-defined structure, and chances of getting success would increase if you follow your drafted plan in an appropriate manner.

Having awareness about the next steps in advance is necessary for the proper implementation of things.

Every catering business model has two pillars-

catering business model

If you are engrossed in starting a small-scale food catering business in India, then you should find out a model that comprises renting of kitchen space on an everyday basis. It would work well for you by preserving your money. On the other hand, if you intend to start a full-time catering business, then you must have a cooking facility as well as permanent storage. Be a wise thinker at the time of setting up your kitchen. Give your customers a chance to taste the delicious food by putting some tables and chairs close to a storefront.

Be open to the genuine feedbacks from the customers’ end and find out the ultimate solutions to turn negative responses of the customers into positive outcomes for the future. Not only would it bring more customers around your corner, but also you will start receiving pre-orders before the set up of your business. The recipe that helps a catering business in accomplishing success is its focus on a cooking niche.

Some of the niches that you can give your nod are-

  • Festive occasions
  • Weddings
  • Anniversaries
  • Boxed meals
  • Corporate parties

Kitchen Area Requirement and Rent

  • In the case of the catering business operating on a small scale, the minimum required kitchen area would be 70-80 square feet. Here, the business should not involve more than 25 people. This requirement would increase for serving more than 25 people as the required kitchen area would be at least 100 square feet.
  • The numbers of your clients will increase if you will establish your own kitchen as clients would trust you that they will get hygienic food fit for human consumption. The rent would vary from place to place.
  • For kitchen space of 100 square feet, an average rent would be more than Rs 8000 and close to Rs 10,000. The location would be a point of consideration.

Capital Investment- A Prime Factor

How can you even dream of your business without capital investment? Capital investment is the fuel for driving any kind of business. Constructing a tentative financial plan would let you know about the requirements of funds for forming your business. Budget creation at the very beginning will help you in determining the needed cost to start as well as run a food catering business in India. Effective utilization of capital for on-site kitchen equipment, managing rents, licenses, and various other expenses as well.  It would help if you endeavored to reach the right sources for fulfilling the capital requirements of your catering business.

Many investors would provide you financial support, and don’t forget to apply for the bank loans in times of need. Before asking for financial help, you must ensure that you are ready with an effective business plan.

The financial budget may vary as per your choices and preferences. Rs 20 lakh is an average budget to begin a catering business in India. This budget comprises of expenses of initial months, licenses, kitchen rent along with various other permits. If you want to get a hassle-free loan, banks would readily help you with their schemes.

Hire the Best Workforce and Manage the Inventories

Running a food catering business in India is no duck soup. There are various other factors apart from expertise at culinary art that requires attention. Hiring the best workforce who can work with utmost dedication without showing any hurry at the time of performing their duty and also they need to understand the demands of the clients. Furthermore, you would need assistant chefs for your kitchen.

Efficiently managing the inventory by writing down the items required for commencing a catering business is a mandatory task. Besides this, you need to look at the equipment that you don’t have, and you have to purchase them as soon as possible. Also, you should bring those pieces of equipment first that will help you in preparing the dishes.

Invest in the On-Site Equipment

After managing sufficient capital for your catering business, you must make the investment in the most basic on-site equipment for the kitchen. Basic requirements of a kitchen include stainless steel tables, refrigerators, fryers, few stoves, and storage cabinets. Keeping them aside, you would require the equipment given below in the list.

  • Tin Foil
  • Oven for cooking purpose
  • Beverage or Coffee Station
  • Garbage Bins
  • Serving Equipment

Read our article:New Regulations of FSSAI Prohibit Plastic, Newspaper Packaging of Food

Find out the Vendors as well as Suppliers.

Cooking food is a simple process than catering. Expectations are high from the caterers as they have to provide linens, glassware, tables, utensils, and chairs along with food sometimes. Another necessary step is to spot the vendors. Start building connections with suppliers and vendors.

Starting a Food Catering Business in India- Legal Steps

  • If you want to initiate any business irrespective of its kind, then the first legal step is all about deciding and choosing the type of business entity. It’s better to set up your catering business as a private limited company or LLP or a one-person company because the FSSAI act[1] incorporates the catering business processes, along with numerous penalties in case of offenses. Most importantly, the entities mentioned earlier are transferable; thus, the transfer of business or license to another individual will be an easy affair.
  • Make headway with a limited liability partnership if the annual sale turnover will be below Rs 40 lakhs, and capital would not be more than Rs 25 lakhs.
  • Begin a private limited company, if the sale turnover will be in surplus of Rs 40 lakhs of capital contributed in excess of Rs 25 lakhs.
  • Commencing a one-person company would not be a good idea at all as in case annual sales turnover crosses two crores, there would be a requirement for this company to get converted into a private limited company.

Getting the FSSAI License is Mandatory

If you want to run a food catering business in India, you must obtain the FSSAI license to continue activities related to any stage of manufacturing, storage, packaging, processing, catering services, import and includes catering services, food services, sale of food as well as the sale of food ingredients. Without an FSSAI license for food business, you can’t even think of conducting a food catering business in India.

To get the FSSAI food business license in India, documents that must get submitted are-

  • Incorporation documents of the business
  • Address Proof
  • Promoters’ identity/resident proof
  • Details matching the application format needs

The state government is the responsible body behind the food license for conducting catering businesses. Get your application submitted to the local FSSAI office.

Obtaining FSSAI License in India – Parameters that Requires Consideration

After boosting your business turnover and making it exceed beyond 12 lakhs a year, only then the requirement for other permits and licenses will arise. Prior to this, you must take care of the following parameters to get an FSSAI license.

  • Maintain cleanliness and hygienic environment around your stalls and counters, and also, they should be clean.
  • The business site must be external pollutants-free.
  • Use contamination-free food.
  • Storage should be in the hygienic state.
  • Food that has to reach at the consumers’ end must get prepared freshly.
  • The staff associated with your business must follow the health guidelines.
  • All the containers required at the time of delivery must be dust-free and free from all kinds of contamination.

Health Trade License

In order to give uttermost priority to the health of the public, health trade license came into existence. The local civil authorities that render this license are- State Health Department or the State Municipal Corporation. Points about health trade license are present in the 11th Schedule of the Municipal Corporation Act, 1957.

Food Establishment License

All kinds of catering businesses require a Food Establishment License, and they would get through the inspection process by state compliance to obtain this license. Your kitchen space and the staff must prepare themselves for the inspection process.

Other Licenses or Permits

State agencies and jurisdictions can impose additional licenses and permits on the F&B sector. You may meet up with Health Assurance and Quality Assurance. Other licenses are sewage permits, fire department NOC, and so on.

GST Registration

On the basis of the state of operation and annual sales turnover, the catering businesses must get the GST registration done. If a catering business provides annual services of more than Rs 40 lakhs, then the catering business services would get covered under GST. Get GST registration and initiate GST payment if the catering business crosses Rs 40 lakhs turnover.

Execution of Marketing Plans

In the process of reaching out to your clients, you must devise a marketing plan and execute it in the right way. You can showcase your work by building a website. You should put out different campaigns and offers to lure your customers. Furthermore, you can take the help of e-mail marketing strategies to retain customers.

Take Away

Starting a food catering business in India is not as easy as cooking food. You need to follow various guidelines and devise a proper business plan. In addition to this, you have to obtain the FSSAI license for carrying out a catering business. You have to get various other licenses like Health Trade License, Food Establishment License, and various other permits and licenses.  We, at Corpbiz, would help you in obtaining food business License for starting a catering business in India.

Read our article:How to Obtain an FSSAI License in India: Full Guide

Margesh Rai

Being a poetry lover, and an avid reader, Margesh is fanatical about legal content writing. After completing graduation in B.Com(H), he decided to follow his passion. Writing impeccable in-depth content about legal and finance-related topics is his biggest forte.

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