Start a QSR in Rs. 5 Lakhs | Takeaway Restaurant in Rs. 5 Lakhs
QSR format has become the most preferred type of business for small scale restaurants as well as large scale franchises. It seems to be the most practical format these days and one of the best food business ideas. Read all about QSRs here in my previous post.
Below is the breakup of total cost :-
1. Location of the Quick Service Restaurant
Ideally a small takeaway requires 250-350 Sq. Ft. of area whose rent will cost you Rs. 15,000 – Rs. 40,000 depending on the size and locality. I would suggest to pick a place which isn’t the prime location (as it would cost more) but on the other hand not too dull. Since most of the orders in a takeaway restaurant are online or telephonic, location is not a major factor as in case of Cafes or Dine-ins. Just make sure that the nearby area is clean and hygienic because it is an essential for a small outlet. You don’t want garbage lying around your premises as it implies poor standards and unhygienic food.
Generally you have to give two month’s advance rent and make sure to get a proper Rent Agreement. Make sure you have a steady supply of water and electricity along with a good drainage system in place.
Total Budget for Location comes around Rs. 80,000
2.Kitchen Equipment and Raw Material required for a QSR (Fixed Capital and Working Capital)
Your kitchen equipment will be the highest expense in a Delivery Restaurant. Ideally you want to buy used equipment which is in good and working condition. You can also lease the equipment.
The following items can be purchased second hand :-
(which will save you a lot of money and provide same functionality)
However I would recommend that some items should always be bought fresh and new such as :-
- Gas Pipelines
- Chopping Board, Knives, etc
The equipment will cost you around Rs. 2,00,000.
After you have decided your equipment plan, next comes the raw material and packaging :-
Raw material includes :-
- Dairy products (Milk, Curd, Paneer)
- Groceries (Vegetables, bread, wheat, maida, raw pasta, etc depending on your offered menu)
- Poultry and Meat ( Chicken, eggs, fish, etc)
- Sauces, Purees, Powders, Spices, Pastes, etc
You should source the material from a supplier who has good reputation in the market and allows credit as well. Ask other restaurants in your area about their suppliers or just google about it, you will get a list. You can consult your friends in hospitality business or Hotel Management for food business ideas for your outlet
The raw material will cost you approx Rs. 10,000-20,000 for one week cycle.
Packaging Material and Disposable Utensils :-
Most of the takeaways use disposables for serving the food on the spot or in the car, etc.
For deliveries you will need packaging material such as Boxes, Pouches, Plates, Folk, etc which will cost you Rs. 10,000.
Total budget for Kitchen Equipment and Raw Material comes around Rs. 2,50,000
3. Staff/Employee Costs
Your staff will be the backbone of your business and you need to choose the workers who are flexible and cooperative as well. For a small 300 Sq. Ft. takeaway restaurant, you need 5 employees :-
- 1 Main Chef – Who has a full grip on the menu (Rs. 12,000 monthly )
- 2 Assistant (7,000 x 2 = Rs. 14,000 monthly)
- 1 Full time delivery boy (Rs. 8,000 monthly)
These costs will vary according to your timings of the outlet (Full day or half day). Assistants required might be more if you have a wider range of menu in your delivery restaurant.
Total Employee cost comes to Rs. 34,000 for the first month.
4.Marketing and Selling Cost of a Quick Service Restaurant
Before starting a restaurant you need to do a proper research in your market. Most people go wrong here. They start selling a product which has no demand in the market. They end up shutting down a few months later.
Find out what people order the most in your area – for example – In North Delhi people mostly order Chinese, Mughlai, North Indian, while in South Delhi there is more demand for Japanese, Continental food.
Here are few marketing tips for starting you restaurant :-
Conduct a small survey to see what the market wants. Go to the nearby restaurants and observe what is frequently ordered. Ask your friends what type of food they eat out.
After you have decided your menu and about to start the work, you should start with the promotion
- Print pamphlets and distribute in the nearby area (Most common method)
- Get a banner/board advertisement in your locality in a few places.
- Utilise the power of Social Media – make a facebook page and share it among your friends.
- Give a launch offer such as buy one get one or 50% off. But do not keep it for a long time such as 1-2 weeks. Keep the launch offer only for 2-3 days maximum.It has been observed that once the customer gets your food for cheap, they are less willing to pay for it double once the launch offer ends.
- Ask your customers to rate you on zomato, google, swiggy so that you build a good image online
There are so many food delivery partners these days such as Swiggy, Foodpanda, Zomato. Tiyng up with them will boost your business tremendously. They charge a basic fee/commission per order received on their portal and handle the food delivery for you.
The initial Marketing will cost you Rs. 10,000 – 15,000. But your job does not end here. Keep your social media up to date with regular engaging posts so that your customers don’t forget you.
You basically need 5 licenses in India for a Quick Service Restaurant :-
- Food License from FSSAI
- Health License from Local Municipal Corporation
- Police Eating House License
- GST Registration
- Fire License from Fire Department
Any Chartered Accountant or a third party agency will help you to procure these licenses.
Cost for Licensing will come to Rs. 12,000 in total.
6. Utility Bills
Utility bills for a Quick Service Restaurant include
- Electricity (Major expense)
- Internet Connection
These Utility Bills and Licenses will round up around Rs. 10,000 .
You might also need a cloud based billing POS (Point of Sale) software to keep a better grip on your sales and inventory. If you want to leave your food delivery restaurant on auto mode, then its a must for you as you can check your daily sales and supplies via your phone. It will cost you a one time fee of Rs. 20,000 and further Rs. 2,000 per month.
Your final expenditure comes up to Rs. 4,50,000.
Keep atleast 6 months working capital reserved because any restaurant takes atleast a few months to get established in the market.
Check out our other posts for food business ideas.