India is a diverse and culturally rich country. It is home to some of the largest festivals, rituals, and family gatherings. With so many festivities come the need to serve food to millions of people. This is the primary market for catering businesses. Despite the pandemic, catering businesses are on the rise and gaining popularity. Therefore, follow this guide to learn how you can create a catering business plan today.
Growth of the Food Catering Industry in India
The food catering industry in India is a vast and growing business. It is becoming an increasingly preferable choice in events, family functions, corporate offices, and residential complexes. The demand for healthy home-cooked food is one of the primary reasons this industry is thriving.
According to the Federation of Indian Chambers of Commerce & Industry (FICCI), the Indian Food Service industry is expected to cross Rs. 5,52,000 crore by the end of 2022. With a steady annual growth rate of 10%, the catering industry will become one of the most profitable food industries in the country.
Additionally, internet penetration, AI, and an increase in smartphone usage have significantly improved the accessibility of catering services. It has brought down the costs and driven up value. Another major impact has been on delivery time. Faster and wider scope of delivery has made it easier to order food from anywhere in the country.
With rapid urbanization, food catering services have become a necessity among densely populated neighbourhoods. Apartment and office complexes are two of the most dominant markets for the catering industry.
Types of Niches in the Catering Businesses
Before you begin planning your businesses, begin by selecting a particular niche. The food catering industry is large and serves a variety of sectors. Each sector can be sub-divided. Therefore, there are a lot of categories to choose from. Additionally, focusing on a particular category of business allows you to streamline it. This in turn attracts your target group faster and in large numbers. Here are some of the most prominent catering niches:
- Festivals and occasions
- Formal Events
- Tiffin centre
- Office mess
- Corporate parties
You can diversify your service and include several categories. However, it is recommended to specialize in one.
Creating a Business Plan for Your Catering Business
Developing a business plan is extremely important for the growth of your business. While plans may differ from niche to niche, some fundamental steps will remain the same. A business plan will help you smoothly set up your business, foresee the common shortcomings, and prepare for them.
A catering business is a unique venture. Here, everything from the quality of your kitchen to the marketing of your brand can make a huge impact.
Start creating a plan by referring to this standard business template. You can omit or add sections that are relevant to your business. However, below are some areas that you need to be focused on.
The food industry thrives on qualified professionals. If you’re leading the kitchen, consider undergoing professional culinary training and obtaining a certification. This will equip you with professional tools to better serve your customers.
Several diploma courses ranging from 12 to 18 months are available throughout the country.
However, if you intend to be on the managing front, a certification in hospitality or management will add to your business plan. Management diplomas are generally of lesser duration and can be obtained easily.
Specialized certification in hospitality will put your credibility on a pedestal. This also serves as a brilliant tool for marketing and brand positioning.
Any type of certification mentioned in the business plan increases the chances of getting a loan from the banks. However, if you have plenty of experience in the food industry, that can also serve as a focal point of your plan.
Industry and Competitor Analysis
A strong industry analysis shows that you’re well aware of the trends and competition. Industry analysis is one of the first things that is seen in a business plan. By understanding an industry’s dynamics and how it functions, you can add value to your business proposition. Through SWOT or PEST analysis, you can find gaps in the industry, conduct an in-depth company overview of competitors, and adopt smart strategies.
Therefore, begin by identifying key players in your region. Outline their target audience, an estimated cost of operation, number of employees, and business model. This will give you a thorough idea of your competition. By identifying their weaknesses, you can capitalize on that and better serve your target group.
Scouting Suppliers and Logistics
Having reliable suppliers will determine the quality of your catering business. As a food service, you will require good quality suppliers that deliver raw materials and finished goods timely. Thus, take some time to form partnerships with the supply and logistics chain to broaden your reach. A well-connected logistic network will ensure that there is no gap from the preparation of food to delivery. Making the process work seamlessly will raise customer satisfaction and attract more customers.
A well broken and laid out financial plan can be the difference between a struggling and successful venture. Determining your cost breakdown is extremely crucial. You need to factor in the space required, equipment, inventories, workforce, marketing, logistics, etc. Since prime location is not a mandatory factor, you would require a minimum of 100 square feet of kitchen space to serve over 25 customers.
The list of equipment varies on the type of catering business. However, general equipment such as ovens, serving utensils, tea/coffee chambers, disposable containers, plastic wrap, cutlery, etc. is needed. Next, figure out your workforce. How many chefs, helpers, and delivery personnel do you require?
On average, you can start a catering business under Rs. 20 lakhs. Securing a bank loan is possible, and a business plan will help you with that step.
Licenses Required for a Food Catering Business in India
All food businesses need to strictly comply with FSSAI mandates and permit requirements. While starting, you only require basic FSSAI registration. That will give you an FSSAI number. Once your turnover surpasses Rs. 12 lakhs, you will need to apply for a food license and other permits. Here is a list of permits a catering business requires:
- FSSAI license: Food licenses are given only when a business follows strict parameters. Parameters such as distance from external pollutants, hygiene, cleanliness, and contamination are extremely important.
- NOC from Fire Department: This is required to ensure the fire safety of your services.
- GST Registration: Standard business registration through a chartered accountant.
- Food Establishment License: This is a mandatory license for all food catering services. A state health inspector verifies your workspace and gives it clearance to operate.
- Sewage License: Required to ascertain all labour working at your organization is above 18 years.
- Quality Assurance & Health Assurance: Required for ensuring the highest food quality.
- Liquor License (Optional): In case your business serves alcohol in events or functions, this license is required.
- Water License: For ensuring that only clean drinking water is made available at your catering business.
You may require additional permits for logistics depending on your business type and logistics requirement.
Create a Strong Marketing Plan
An important step after launching your catering business is utilizing all available marketing channels to promote your business. Marketing is essential to keep your business afloat and attract new customers. Identify a Unique Selling Point (USP) of your business, and create a marketing campaign around it. For a catering business, the following marketing channels are the best fit:
- Word of Mouth: Your customers will also serve as your marketing channels. This is one of the most powerful marketing strategies. Word of mouth is fast, efficient, and has a snowball effect. High-quality service is bound to get word from one customer to the other.
- Networking: Participating in exhibitions, events, and food festivals will enable you to network and meet other industry professionals. This is necessary to promote your brand in the B2B domain. It can also lead to large-scale corporate orders.
- Social Media: This is where your USP comes into play. By creating interesting infographics, posters, and engaging content on social media, you can target a specific demographic. Through SEO and SMM, you can generate thousands of leads and customers. Therefore, the internet and social media are powerful marketing tools.
Catering Business Success Stories
There are several success stories of entrepreneurs that created famous food brands. Even people that don’t belong to the F&B industry have revolutionized the catering business.
The story of Chef Anahita Dhondy is an inspiring one. In a male-dominated industry, she set up the remarkable food brand of SodaBottleOpenerWala. The restaurant is one of the most popular in Delhi and has grown under her leadership.
Another cool story is of Jyothi Ganapathi who started Dosa Inc. The food truck is famous for serving the best South Indian cuisine in Delhi.
Jyothi had no experience in the F&B industry, and yet she went on to turn a home-favorite recipe into a profitable venture.
You can read about several such inspiring success stories about women entrepreneurs.
Catering Training & Courses
To help you get started on your catering business journey, here are some useful training resources:
- Food Safety Training and Certification (FoSTaC)
- BBA in Hotel and Catering Management
- Diploma in Hotel Management
- BSc in Catering Science
- Bachelors/Masters in Hotel Management
The food and hospitality industry is one of the fastest-growing industries in India and globally. Starting a catering business with little to no experience may seem intimidating. However, with proper training, research, planning, and execution you can create some of the most successful food brands in the country. Thus, this is the perfect time to profitably serve the growing demand for food services.