Starting a coffee shop business in India has become a rage in recent years due to the high demands from the millions of coffee lovers in most of the developing regions. After tea, coffee is the second leading preferred beverage in India. India is known for producing near about 3.5% of coffee production in the world. The climatic conditions, as well as advantageous topography, assist in growing coffee beans in the North-Eastern and Southern parts of India.
Indians are too fond of freshly brewed coffee to refresh them and feel lively and energetic. Indian coffee is getting worldwide recognition due to its pleasant fragrance and exotic taste. It’s unquestionably correct to say that starting a coffee shop business in India is a wise decision as it is a lucrative field to enter for young entrepreneurs who understand the taste and preferences of modern consumers.
Points to Consider before Starting a Coffee Shop Business in India
Before starting a coffee shop business in India, coffee shop enthusiasts must consider the following points-
Draft a Solid Business Plan
An applicant should draft a solid business plan in order to accomplish success in running a coffee shop business in India. While preparing a plan, don’t forget to take your customers and employees into consideration. In advance, compose a list of everything that you will need in the future course of time. Your agenda must keep a solid business plan on the top above everything else. It’s crucial to go ahead for some prior research as it would help you in the generation of some exciting ideas.
A business plan in written form would comprise your customer base, methods that you will adopt for operating your business, ways to tackle the existing competition, how to get rid of problematic situations in the process along with how to maximize profits.
It would be best if you visit the coffee shops around you to gather information about their offerings, analyze their menu before framing a menu for your coffee shop and observe the way they have decorated their interiors of the coffee shops.
If possible, conduct a survey to get feedback from people regarding their expectations from a coffee shop. You can involve your friends, family members, or even an unknown person in the study. Don’t you think that these people are likely to be your potential customers? The future investors that will be joining hands with you would ask for a business plan for your coffee shop business in India. Most importantly, you need to think like a customer and seek within yourself that what you expect when moving to a cafe or coffee shop. After thinking this, you will be able to understand the regular customers’ mindset. Also, you may try to familiarize yourself with those factors that may entice your customers.
Selection of a Perfect Location is Essential
What lures the coffee lovers to visit a coffee shop is that they get to spend pleasant and happy moments with their dearest ones, and they have a wide range of alternatives to attempt for a variation in taste. Thus, the concern is starting a coffee shop business in an apt location is mandatory.
Before giving your nod to a location, you must observe whether the location has sufficient footfall to conduct the coffee shop business or not. You need to set up your coffee shop in easily accessible areas. Areas with plentiful parking spaces would be an added benefit. People would visit you even more if they didn’t find any difficulty in reaching your coffee shop.
The perfect location for your coffee shop should be a place on the main street, and also it must get spotted in no time. In the visible location, chances of high footfall would increase. Your location should be appropriate for your fancied customer base.
Budget and Investment
The budget plays a crucial role in upgrading the level of any business. It decides the scale that coffee shop owners will maintain for running a coffee shop business in India. For investments, you would have to approach financial institutions[1] for business loans, and you can invest the savings that you’ve accumulated after years of hard work. In addition to this, you will be fulfilling your small investment requirements by taking the help of your partners and relatives as well.
You can hire the right people by spending finances in hiring the best workforce. By bringing the right people on board would help in the enhancement of customers’ service. Having the best staff members indicates that your coffee shop has something different from your competitors. Also, you have to purchase the equipment for running a coffee shop. Investing in superior quality equipment would add charm. Investment in an efficient coffee shop POS system would do wonders for your coffee shop business in India.
Marketing and Promotion
Before inaugurating your coffee shop, you must spread the information regarding the opening of the coffee shop. Marketing and promotional activities should initiate before the commencement of the coffee shop business. Proper implementation of online marketing strategies would lure mass coffee lovers. Take the help of social media as it has gained prominence in terms of promotion and marketing via the online platform.
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Licenses and Registration Needed to Start a Coffee Shop Business in India
The licenses and registration needed to open a coffee shop business in India are-
Company Registration
Coffee shops would get established in India either through an LLP or sole proprietorship. The Indian government is regulating various bodies for the Company Registration.
Health Trade License
The issuance of a Health Trade License takes place from the hands of the Municipal Corporation or Health Department of the respective state. Health Trade License is a certification that proves that the coffee shop owner is acting in accordance with the hygiene and safety norms. Coffee shop owners must obtain Health Trade License; otherwise, Municipal Corporation can shut down the premise.
GST Registration
All the coffee shop owners, involved in the taxable supply of goods or services, having their turnover crossing the threshold limit, can go for the GST registration along with obtaining the GST number.
License for Eating House
An applicant should apply for Eating House License under the Headquarters of state/city police and the Police Commissioner. In some cities, an applicant can apply using an online medium for acquiring the registration certificate.
Fire Security Certificate
Coffee shop owners should understand their responsibility of protecting their consumers and products from accidents and hazardous issues like fire. Arrangements’ concerning fire security is a requirement, and thus, the Fire Department provides the NOC for the same. After the premises would get inspected, Fire Security Certificate will be provided to the coffee shop owners.
Shop and Establishment License
If you are keenly interested in commencing a coffee shop business in India, you have to acquire Shop and Establishment License. This license would get attained from the Labour Department of the state government of the respective state.
Trademark Registration
All the coffee shop operators must get Trademark Registration for their coffee shop business to create awareness among people about your brand. Get your Trademark registered with the Department of Trademark.
License for Playing Music
Music License gets issued to safeguard the rights of songwriters, composers, and publishers. Indian Performing Rights Society or a registered Copyright Society grants the Music License. If you play pre-recorded music at the premises, then Music License would get issued by Phonographic Performance Limited (PPL).
FSSAI License for Running a Coffee Shop Business in India
All food business operators, including coffee shop owners, must obtain the FSSAI License. FSSAI Food License ensures that products are as per the standards of the FSSAI Act and high on qualitative grounds. FSSAI is the governing authority liable to check the food products quality. After completion of the inspection, the Food Safety Commissioner would grant a 14-digit FSSAI number after he feels satisfied with the quality of food.
The three types of FSSAI Licenses and Registration are-
- Basic Registration- For annual Turnover up to 12 lakhs
- FSSAI State License– For annual Turnover crossing 12 lakhs and not exceeding the 20 crore limit
- FSSAI Central License– For annual Turnover beyond 20 crore
Bottom Line
Commencing a coffee shop business in India is profitable as well as a lucrative option. Furthermore, the coffee shops chains are gaining popularity among the masses. Acquiring all the mandatory licenses and permits discussed above would help the coffee shop owners in running their coffee shops without any trouble-filled legal matters in the future.
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