The food industry is one of the fastest-growing industries globally, and it's easy to see why. People like to eat, and they like variety when it comes to what they eat and how they go about preparing their meals. Starting any food business in India can be hugely rewarding, but it can also be tough if you don't know what you're doing. And especially if you're looking to make it your first foray into entrepreneurship. If you are keen on knowing how to start a food business in India, follow the ten steps below to start your own successful food business. Followed by which you'll be well on your way to making your dreams come true!
Did you know?
The food market of India is the 6th largest in the world, and its industry accounts for approximately 31% of the Indian consumer basket.
Key Points on How to Start a Food Business in India
Detailed Steps on How to Start a Food Business
1) Come Up with an Innovative Idea
One of the biggest challenges for budding entrepreneurs is coming up with the idea that hasn't been done before. If you're worried your business idea is unoriginal, remind yourself there are many unique ways of approaching it. For example, if you want to start a company that makes organic foods for dogs, consider how you can make them healthier and more appealing than their traditional counterparts.
Your passion is key! Although it might sound cliche, starting any food business in India begins with an idea or concept that genuinely excites you. If you have no enthusiasm for your business idea, there's little chance of creating something sustainable. A great way to get started is by identifying your interests and skills, then brainstorming ideas around those topics. Don't be afraid to think big!
Once you've identified a niche in which you'd like to operate, do some research on what similar food businesses charge for their products or services, but also try not to be discouraged by how much money they're making. You may find there's plenty of room in that market for another player and if not, at least you'll know where your ideal price point lies.
Also Read: How to Start Haldirams Franchise Business in India
2) Get Some Experience
Once you have your business idea and plan of action, take a step back and ensure that you have enough experience to accomplish your goals. If you don't have any experience, it's fine. You can start working on projects for free just by reaching out to businesses in your area or others who could use help with their services.
Experience is invaluable as it gives you more knowledge about whether or not running a business is something that interests you, in addition to other valuable insights about management, pricing, and marketing strategies. Knowing what you want from your entrepreneurial venture will give you leverage when approaching investors for funding or when trying to build trust among customers.
3) Talk to Potential Customers
Before you invest any time or money into your startup food business, you need to do some customer development. Find out whether anyone would buy what you're planning on selling. Don't just ask friends and family if they'd be interested in your product; instead, go out into public and talk to strangers who look like they might be potential customers. Ask them what problems you solve for them, how much money they currently spend on solutions and whether they'd pay the specified amount for your solution.
Their responses will tell you everything from their price point expectations (which is important) to whether there's enough demand for your idea. Use customer development as an opportunity to validate your business concept and refine it until it solves a genuine problem for which people are willing to pay. The more focused you can make your idea before launching, the easier it'll be to market and sell later.
A few examples of questions you could ask to boost your food business ideas in India:
- What challenges have you had with cooking/meal prep?
- What is the average number of hours you spend cooking each week?
- What foods make up most of your diet?
- How often do you cook fresh meals to eat processed food or eat out?
- What's been hard about meal prep?
- What features would make meal prep easier for you?
- Do other apps/websites already offer similar services that don't work well?
- If so, why haven't they worked well for you?
4) Come Up with Your Brand Name
You may have a great product to start a food business already, but if you don't have something memorable that stands out and makes customers want to remember it, you won't be able to rise above your competitors. Think of brands like Coca-Cola and Apple. They are household names, but they also provide everything their customers could want in one concise package. It will save time for buyers and make companies more efficient, which is what you want. It would help if you stood out.
5) Choose Which Type of Company You Will Be
There are three types of companies that you can choose from when starting a food business in India:
- Sole Proprietorship
- Partnership
- Corporation.
1) Sole Proprietorship
It is the easiest of these three options and one of the least expensive. It offers personal liability protection (meaning your business debts will not be your own but rather belong to your company), little taxation and no reporting requirements unless you earn income over a certain specified limit.
If you decide that running your company as an individual isn't for you, you may want to consider forming a partnership or corporation instead.
2) Partnerships
These involve two or more individuals sharing equal ownership in their new business.
3) Corporations
They are legally structured as separate entities independent from those who hold shares.
6) Get Some Funding and Find Investors
Every new business needs funding, and it's generally in your best interest to get as much of it upfront as possible. Investors will want some proof that you know what you're doing. If you don't have any business experience, they might not trust your idea (which is understandable) and ask for some guarantee. For example, if your restaurant fails within 12 months, investors immediately get their investment back. These agreements are called no-fail loans because if things go south before the year is up, investors can liquidate their assets with no risk.
It would be best if you also looked into getting a small business loan from your bank or credit union. Loans typically require collateral but offer better rates than private investors. However, they aren't guaranteed by law like private investments are. The MSME government business loan scheme or MUDRA business loan offers low-interest loans to small businesses. There's also crowdfunding, which has recently become an increasingly popular way for businesses to raise money online from everyday people.
7) Register Your Business Name, Trademarks, etc.
Registering your business name is easy and inexpensive. Most countries have official government registries, usually in local offices, allowing you to claim your business name ownership. Some even require a visit, while you can also register over email.
Registering your trademark is also very easy in most countries and helps prevent businesses from trading off of yours. If you're launching an actual startup food business, you'll also need a Taxpayer Identification Number (TIN) with the IRS, which can be easily accomplished online.
You may need additional permits if you plan to start a food business in a restaurant that is often simple. It would be wise and easier to consider hiring someone else to do it for you. Some firms specialise in helping new businesses get up and running quickly. Just make sure they're reputable so you don't waste money or pay for something unnecessary.
It is also to be noted that a name for a startup food business does not automatically mean success. You might want to spend extra time brainstorming different options before deciding on one because it could help set your brand apart if chosen wisely.
8) Hire Your Team
You need great people to make your startup food business work, so start building your team as soon as possible. There's no perfect formula for determining how many employees you need or how to find them. Still, an important rule of thumb is that you should aim for about one employee or two employees—one solely dedicated to food production and another who handles everything else. Both roles are essential. These positions aren't easy to fill, so don't rush it.
Before launch, focus on finding candidates with prior experience working in similar roles if you have time. If you don't have time, consider hiring someone fresh out of school who will be eager to learn and can grow into their position over time.
9) Choose Your Location Wisely
If you're trying to start your food business in India, it's essential to consider where you'll be based. Location is an important factor in any small business, especially when your product has specific geographic limitations. For example, if you want to start a cupcake company or plan to open up a restaurant, you need to select an area with lots of foot traffic and good access points for customers. Otherwise, it could be very difficult for your business to succeed.
When choosing a location, think about whether there are enough people interested in buying from you and what they would need to do so. It would help if you also thought about how close you can afford to get to potential clients. The more convenient, the better.
A great way to figure out which areas fit these criteria is by researching online. You can check out Google Maps, Yelp reviews, Facebook pages and other online forums that discuss local businesses. You can also use Google Trends data (available through Google AdWords) to see how popular certain search terms are and which locations might have more demand for your product or service.
Also Read: How to Start The Naturals Ice Cream Franchise?
10) Set Up Your Website, Facebook Page, etc
If you want your company to succeed, getting an online presence is important. It is entirely possible for someone without a website or social media presence to create great products and even succeed in their small business. Still, it will be much harder, and you won't find customers quite as easily.
You'll need somewhere for people who love what you're doing (and potentially want to buy from you) to connect with you. Having all of your content in one place is convenient for you and customers alike, so there's no reason not to do it. Start by setting up your Facebook page, Twitter account and Pinterest account. Once those are set up, start building out your website with content that reflects what's so great about your product.
Conclusion
If you're interested in starting your own food business in India, I hope these ten steps have helped you understand. For most people, it's not as easy as just opening up a shop and waiting for customers to come. You'll need to make sure you're legally able to sell your product and service, promote yourself, deal with customers, establish your brand, etc. But if you can do all that, well, we'd say you've got what it takes to be an entrepreneur. Good luck!
Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.
