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C. setting up a hotel


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Step by step guide to setting up restaurants and hotels.

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C. setting up a hotel

  1. 1. Prof. (Dr.) Nimit Chowdhary Department of Tourism and Hospitality Management Jamia Millia Islamia, New Delhi
  2. 2. How to start a restaurant in India?
  3. 3. 1. Deciding the concept of your restaurant • The restaurant concept is the first thing your guests come in contact with and perceive the kind of food and service they can expect. Your restaurant concept reflects who you are and what people can expect from you.
  4. 4. 1. Deciding the concept of your restaurant • Fine Dining Restaurants • Casual Dining Restaurants • Pubs and Bar • Quick Service Restaurants (QSR) • Food Truck or Food Cart • Bakery and Sweet Shop • Ice-cream Parlor • Cloud Kitchens
  5. 5. 2. Sourcing the capital • Self-funding or Private Investments • Partnerships • Bank Loans • Venture Capital funding
  6. 6. 3. Deciding the location • Visibility • Accessibility • Parking • Affordability • Competition – Business model – Type of experience (product) they offer • Understand the market
  7. 7. 4. Costs • Variable costs (food costs) – Ideally should be around 30-40% of the menu prices
  8. 8. 4. Costs (overheads) • Rent (not to exceed 10% of revenues) • Interiors (based on concept, theme, budget) • Kitchen equipment (appears heavy on pocket) • Licenses • PoS (price depends on features and functionalities) • Marketing (ideally should spend 1-2% of your revenues)
  9. 9. 5. Legal concerns 1. Trade license from the municipal corporation Depending on the size of the restaurant, the cost incurred is from Rs 10,000 to 1 lakh. However, the actual license fee ranges from Rs 5000 to 10,000 for a small restaurant. The licenses are issued for a financial year and need to be renewed towards the end of every financial year.
  10. 10. 5. Legal concerns 2. FSSAI One needs to get a license from the Food Safety and Standards Authority of India (FSSAI) to operate a food business. The size of your venture, turnover, installed capacity, location etc. are factors in obtaining an FSSAI license and costs around Rs 5000 to 10000.
  11. 11. 5. Legal concerns 3. GST Registration Restaurants are required to register under GST and get their GSTIN Number. GST registration is state specific, so if your restaurant has outlets in different states, then you need to have a separate registration for each state.
  12. 12. 5. Legal concerns 4. Professional Tax license You need a professional tax license for employing salaried staff. This is payable on a monthly basis for all restaurant staff earning above Rs 10,000.
  13. 13. 5. Legal concerns 5. Liquor License If one chooses to open a restaurant serving alcohol, then this license is must obtaining a liquor license is the trickiest of all and is also pretty expensive. It is advisable to apply for the liquor license early, as this permit takes a lot of time as well.
  14. 14. 5. Legal concerns 6. Business Registration You need to register your business as a partnership firm or a Pvt Ltd company. You’ll need to file annual returns, audit your finances.
  15. 15. 5. Legal concerns 7. Health/Trade License The 11th schedule of the Municipal Corporation Act (1957) is about Health Trade License. It came into existence from the concern that public health must be given the supreme importance. This license is generated by the local civil authorities like the State’s Municipal Corporation or the Health Department.
  16. 16. 5. Legal concerns 8. Fire NOC The restaurant’s ulterior motive must be to protect their customers from all things dangerous, be it food products or hazards such as fire. A No Objection Certificate (NOC) from the fire department is also required to run a restaurant. There is no fee required for NOC as of now.
  17. 17. 5. Legal concerns 9. Music License To play music at your restaurant, you need to obtain a restaurant music license. Under the Copyright Act of 1957, those who play pre-recorded music in any non-private, commercial or non- commercial establishments must obtain a music license issued by Phonographic Performance Limited (PPL). If a restaurant plays music and operates without the said license, they will have to face legal penalties.
  18. 18. 5. Legal concerns 10. Signage License You need to market your product well that will ensure that your business helps you garner the maximum profit. However, if you want to market your restaurant either through word of mouth, logos, posters, pictures, and symbols, you are required to obtain a legal permit which is the signage license. This license can be obtained from local civil authorities like the Municipal corporations.
  19. 19. 6. Manpower planning • Kitchen Operations staff- Your kitchen staff, comprises the cooks, food preparation staff, support staff etc. They will mostly be unskilled labour. • Service Operations staff- The waiters, housekeeping staff, busboys etc. are your service staff. Since they have to interact with customers, they need to be good at communication and must be trained appropriately. • Management staff- All the stake holders involved in planning and business development process comprises of the Management staff like Operations head, Marketing Head, Projects Head etc.
  20. 20. Staff hiring • Determine requirements • Advertise about the vacancies • Conduct job interview • Maintain transparency • Prioritize training
  21. 21. 7. Menu engineering • Menu pricing and food costing • Menu designing and layout • Menu analysis
  22. 22. 7. Menu engineering • A smartly designed menu can make a significant impact on your restaurant food costs. • The menu should comprise of items that can be prepared quickly and use local or readily available ingredients. • It is advisable to serve dishes that use similar ingredients, which will help you to reduce your overall food cost and the scope of the generation of waste. • The menu also needs to be designed in a way that lures customers to spend more.
  23. 23. 8. Organizing vendors/ suppliers A healthy relationship with the supplier and vendor is essential for the smooth functioning of the restaurant. • One must have an option of at least two-three vendors in each category. This would help compare prices, and will also serve as a backup in case of any emergency or crisis. • It is always preferable to have long duration contracts with the vendor as it helps in maintaining the consistency of your raw materials. • One must also need to check the Trade Identification Number (TIN) of the vendor before giving the restaurant’s supply contract.
  24. 24. 9. Technology Restaurant technology is often the most ignored part of running and managing a restaurant, though perhaps the most important. With new age modern technology, the robust POS has come up with a number of integrated features that has streamlined the restaurant operations to a great extent. Niche restaurant technology solutions are available for different types of restaurants.
  25. 25. 9. Technology
  26. 26. 9. Technology Some of the critical restaurant operations that should be automated are – • Order taking • Billing • Table reservation • Inventory management • Customer Relationship Management • Feedback Management • Online ordering • Reporting • Marketing
  27. 27. 10. Marketing Offline marketing • Magazines and newspapers • Billboards and display boards • Pamphlets and posters Online marketing • Social media marketing • Running paid ads • Email and SMS marketing
  28. 28. 11. Restaurant opening • A grand restaurant opening is your first chance to make a grand splash in the community. • It is an opportunity to introduce the facility, the food and the atmosphere to potential customers. • New restaurants crop up every day, and you must just get lost in the crowd unless you make an impact with a grand inauguration.
  29. 29. 11. Restaurant opening Things to keep in mind when launching your restaurant. • Planning for opening in advance • Deciding between a soft opening and a grand opening • Marketing your restaurant • Hosting the inauguration party
  30. 30. Setting up a restaurant bar There are six types of restaurant and bar formats, namely- • Club • Specialty Bar • Brewpub or Beer Bar • Sports Bar • Neighborhood Bar • Franchise bar
  31. 31. Setting up a Restaurant bar
  32. 32. Setting up a restaurant bar The licenses required to open a restaurant and bar are as follows- • Liquor License • Shop Establishment License • Police Eating House License • Local Municipal Authority License • FSSAI License • Fire Safety Certificate • GST Registration
  33. 33. Setting up a Cloud-kitchen
  34. 34. Setting up a Cloud-kitchen