Things to Keep in Mind While Setting up an F&B Venture
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‘As long as people have throats and bellies, food and beverage (f&b) businesses would flourish continuously,’ this is what people generally think about f&b ventures, but the INR 23000 crores foodservice industry is full of competition where only the fittest can survive and grow. Customers don’t just want to satiate their thirst and hunger; beyond satisfaction, a visit to a restaurant should be a sheer gratification for them. Hence, for a budding restaurateur, following things require complete attention before venturing into the f&b sector.
Focus on the Concept
Today, differentiation is the key to survival in a market of homogenous products. What will be those unique selling propositions that will help customers to prefer a brand over its competitors should be known to the entrepreneur in advance. Other than cuisine and food menu, what will be the other salient features of the restaurant and how they will be merged with the theme of the restaurant should be clear to the restaurateur and other key members of the team, right before drafting the business plan.
Find the Right Location
To arose customer’s temptation for the food and drinks of a restaurant, its location should also be inviting. An ideal location must be in the reach of the target audience of the restaurant, it should be fairly priced in terms of rentals/property value, daily footfall should be good, and it should be safe and clean for the majority of people. As parking of vehicles is a major issue in metropolitan cities, paid parking space in the proximity of the market will always give leverage to the restaurant. Moreover, the cost of the place shouldn’t exceed the budget.
Keep the Fixed Cost as Low as Possible
Every new business has limited resources, and a successful entrepreneur is one who manages all the things utilizing minimum cost involvement, especially the fixed cost which involves rent, kitchen equipment, interiors, and license fee, etc. The amount saved in fixed assets can easily be utilized as working capital for a longer duration. Also, it will help reduce the restaurant’s liabilities that eventually raise the confidence of the owner in those crucial days of the business when many restaurants struggle for the smooth inflow of working capital.
Recruit the Right People
The entrepreneur must hire people who may understand business vision and show interest to follow it. As f&b is completely customer-oriented sector, the team should be humble, polite, and highly disciplined. Team members should be well aware of the industry’s trends and quick in adopting the latest technologies in the sector. People who would interact directly to the customers should be presentable, agile, and helpful. These are the people who clam down impatient customers with a soft voice and a friendly smile, so, their behavioural assessment is a must before recruiting them.
Licenses and Paperwork
Any legal business is not possible without some licenses that the entrepreneur usually get through a chartered accountant. If one is planning to open a restaurant in India, then the following licenses are mandatory. Some of the common licenses are trade license from the municipal corporation, registration in Food Safety and Standards Authority of India (FSSAI), GST registration, No Objection Certificate (NOC) from at least three of the neighbours, liquor license, and professional tax license.
Marketing & PR
In the F&B sector, usually food makes and invites its own customers, but no restaurant reaches into this phase from the day of establishment. Alike other businesses, restaurants invest a significant amount of money on promotion depending upon their business targets and budgets. With the advent of digital technologies and online apps, marketing is now getting easier as well as cost-effective. Now, expensive advertisements in newspapers or a glossy billboard on main streets are not the only ways to lure and invite customers to a new F&B establishment. If one is creative in making engaging posts, then the Internet and social media are pretty convincing to grab the attention of a potential customer.
Customer reviews are playing a vital role in the success of restaurants and food chains because these reviews are next to friends’ recommendations. Moreover, those who realise the power of media are keen to invest in Public Relations (PR), a strategy that is effective enough to turn public opinion in a brand’s favour. The chain of communication doesn’t end here; it is the high reach of social media that multiplies the numbers of followers if one is innovative while interacting with them. Social media influencers and food bloggers are best to bet upon for positive reviews and enhanced reach.
All the efforts will help to bring positive results when the restaurant will ensure quality food and services to its customers. Customers’ expectations shall be maintained at every cost because they are the real brand ambassadors. Standards should be maintained by the top management in all the key areas, be it the consistency in culinary or delivering food in the promised team. And, in case of any negative feedback, immediate actions need to be taken to minimize customer’s dissatisfaction.