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How to start a catering business in India through Swarit Advisors

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| Updated: Mar 02, 2019 | Category: FSSAI

India is a nation where more than 75% of the market is infused with food fanatics. Hence, if you’re considering to engage yourself in the catering business in 2019 in India, then you earn all praises. The scope of starting a catering business is quite high in the country which we will justify later in this blog. Let’s first discuss the market size so that you may get an idea of the past, current, and future scenario of this business.

Market size

  • Overall Food Services

According to the FICCI (The Federation of Indian Chambers of Commerce and Industry) report, the total estimation of the investment made in Indian food services market in 2017 was Rs. 3,37,500 crore.

However, at a CAGR (Compound Annual Growth Rate) is expected to rise by 10 per cent over the next five years. Furthermore, the total investment made in the Indian food services market is estimated to touch a whopping Rs. 5, 52,000 crores by 2022.

  • Catering Business

Based on the current industry analysis of the catering business, it is expected that the global contract catering market will grow at a CAGR of 3.88% between 2017 – 2022.

 

The actual definition of Catering Business

Catering business, as we all know, deals with providing food services at marriage functions, anniversaries, birthday parties, and corporate events. But it is not just that. In fact, it’s a business which involves offering food service at a site or remote site such as an entertainment site, park, aircraft, hotel, event venue, pub, hospital, cruise ship, or filming site or studio.

 

The scope of starting a catering business in India

Considering the culture, lifestyle, and love for food that Indian citizens carry, one can say that the catering business has a good scope in the country. Some of them are as follows:

  • India is a land of festivals and every festival has foods in common. People organize parties and invite their relatives and friends to eat and enjoy. Hence, festivals could be one of the best opportunities for caterers to earn and grow their business.
  • Secondly, Indian weddings are observed to invest a lot in food. Therefore, if you’re starting a catering business, then it could be a win-win for you if you proceed with the right insight.
  • Then comes the Birthday Parties, especially when it’s the first birthday of the child. In fact, a few such parties are no less than weddings. Therefore, once again, caterers can earn a huge amount by providing services at such events.
  • Kitty parties are quite common and once again food is the limelight sweeper. Many people prefer catering services rather than cooking by themselves.
  • Corporate events are once again a very good example of where food plays the most important role. Believe us, corporate is a wonderful option for caterers to earn huge revenue.

Likewise, there are many other things which prove that starting a catering business in India this year could always be a profitable business.

 

Guidelines for setting up Catering Business in 2019

Whether you’re starting a catering business or any other business, you must first have a clearly defined goal. You need to proceed step by step so that you don’t make any mistake in the process. Therefore, we have brought an experimented guideline for you to help you in setting up the catering business in India. Let’s get started-

Researching the market place

Researching the market place is one of the prerequisites for setting up any business. Firstly, you need to find your competitors, and then check out their menus, services they provide, the prices they offer, and the customers they have. If possible, try to encounter their unique selling benefits. Similarly, undergoing research on the market place will help you to discover a lot about business and targeted customers. Furthermore, this will help you create the best strategy to make your business a success.

Identify your potential customers

Until you know your potential customer, you can’t make money. Therefore, once again, it’s one of the most crucial steps towards ensuring the success of your business. If you have some personal contacts in any business or other community, then it’s a win-win for you. Or you can go for cold calling and call a few potential customers and ask them what they expect or look for while hiring catering services. However, you don’t have to pretend them that you’re selling anything. Just say them that it’s solely a kind of survey.

The survey will help you gather information about the services that customers want other than just foods. In turn, it will help you identify and attract only potential customers.

Find out your catering Niche

Before you start, first of all, you should be clear about the services you would be exactly providing to customers. There are certain services among which the following are quite popular:

  • Wedding reception or special event meals
  • Lunch or brunch-style food
  • Appetizers and cocktails
  • Only desserts

Choose the business entity and get all the required permits and licenses

Once you are done with the market research, have identified the potential customers, and are clear about your offerings then get the essential permits and license required for setting the catering business in India. Below we have enlisted a few mandatory and a few which aren’t mandatory but essential. They are as follows:

  • Company Registration for availing several benefits 

Company registration is one of the most essential as well as obligatory steps towards starting a business. If you wish to start your company as a Private Limited Company, then as per the Companies Act, 2013 you must register your company under the Ministry of Corporate Affairs.

However, if you want to establish your company as a Limited Liability Partnership, then you need to register your company under the Ministry of Corporate Affairs, as per the Limited Liability Partnership Act, 2008.

  • FSSAI or Food License for proving your business’ standards

Procuring FSSAI license is the foremost requirement for commencing any food business in India. The reason why food license is mandatory is that FSSAI ensures the food served to the consumers is safe to consume. Furthermore, FSSAI (Food Safety and Standard Authority of India) guarantees the public health promotion and protection via regulation and supervision of good safety.

For food or FSSAI license, you can approach Swarit Advisors. We will submit your application for food license to FSSAI department along with the required documents of yours. We are known for the fastest delivery of FSSAI license, i.e. within just 1-3 working days (FSSAI basic registration).

FSSAI licenses are categorized into three sections:

  1. FSSAI basic: In case your turnover is below Rs. 12 lakh and you’re operating your business within a specific city, then you should apply for FSSAI basic registration.
  2. State license: If you are indulged into activities such as food manufacturing, packaging, transportation, etc. or if your turnover is between Rs. 12 lakh and Rs. 20 crores, then state license is mandatory.
  3. Central license: Ministry of Health and Family Affairs mandates the central license for every FBO whose annual turnover is more than Rs. 20 crores. Moreover, such businesses are also supposed to obtain a central license whose joints are established in more than one state or city.
  • Trademark Registration for securing your business’ identity

Trademark is something which distinguishes your brand from others. With trademark registration, you would be able to create a unique identity of your business. Additionally, you achieve the power to sue anybody for using your brand name in the same business or in the similar class without your concern. In total, there are 45 trademark classes and you need to find out which class your business falls. Although, it is not mandatory but is always advisable to obtain trademark registration for various purposes.

If you are confused with the trademark classes, then contact one of the best consultants (Swarit Advisors) in the market. Swarit Advisors will get your trademark registered in the least possible time. Moreover, they will educate you about the trademark class and in which class your business falls in.

  • GST registration for operating an online catering business

GST registration is one of the vital registrations that every business owners must get. Under the GST (Goods and Services Tax) regime, there are several schemes that can benefit its users. Though GST registration isn’t mandatory for everybody, there are certain conditions under which it’s obligatory for every business operator to obtain GST registration. Those cases are described below:

  1. Case1: If you’re supplying goods or services online, and
  2. Case2: If your business turnover touches or crosses the threshold limits of Rs. 40 lakh.

Note: If you’re running an e-commerce business, then there’s no threshold limit for getting registered with GST.

Therefore, if you want to take your catering business online or your turnover crosses the threshold of Rs. 40 lakh, then you must get GST registration.

  • Health Trade License

Whether you’re commencing eating establishments, storage & sale, food manufacturing units, or any such business, then you must acquire a health trade license from the concerned department. Usually, this license allows the applicant to carry on the trade in specific goods and services that have a direct impact on the public’s health.

The Department of Municipal Corporation is an authorized body for the issuance of this license. Therefore, you can approach the municipal corporation department of your city or area for obtaining health trade license.

Establish relationship with vendors

When people contract catering, they don’t mean just cooking or providing food. In fact, they also expect the caterers to provide utensils, linens, and even sometimes the tables and chairs at a few events. So, your next task would be to discover the best suppliers or vendors in your area and build a relationship with them. It is essential because it will help you to avoid the last minute rush for searching vendors later.

Develop a strong business plan

A business plan is nothing but an overview of the work you’re going to start. It lets entrepreneurs operate the business in an organized way. A business plan is not only about how you should take your business ahead but it will give you insights on how to generate better revenue while considering everything. Additionally, it contains the additional investment you will require to get started.

Active workforce and right inventories

If you don’t have the right workforce and inventories with you, achieving success becomes quite daunting. Therefore, to be the best player of the catering business in the market, you must have the active manpower and appropriate inventories. Consider the following:

  • While hiring, you must ensure them that they need to be always ready whenever your require them. Do check for patience and flexibility for the work.
  • Hire cooks with good hands on cooking. Moreover, the workforce should be able to listen to clients’ demand and meet their expectations intelligently. Do keep extra staffs for emergency.
  • Train your workforce as the industry standards.
  • Once you are done with the hiring process, ensure you have the basic inventories such as oven, Beverage/coffee station, table setting, trays, water pitchers, serving spoons, garbage bins, etc.

Market your business

Even if you have followed all the above steps and skipped this one, then, believe me, you will rarely get into the sight of people. Your business is unknown to everybody. Therefore, marketing your business is one of the essential parts of starting a business and taking it towards success. Marketing will help you increase customer awareness and help you attract them. Moreover, marketing will help you to establish yourself as a brand.

You can design brochures, pamphlets, business cards, etc. and distribute it. Additionally, if you have a fat budget, then you can also consider marketing on television. Marketing will help you to reach your potential customers.

 

Conclusion

Catering business, as observed from the industry reports, is growing at a constant pace. Furthermore, the scope of this business in India is quite impressive due to several reasons. Whatever be the occasion, food is the ultimate requirement of all. Apart from this, if you’re starting a catering business, then, first of all, you need to find the niche of the business, get a strong business plan and obtain obligatory licenses and permits from the concerned authority.

When you are done with everything, don’t forget to market your business. Marketing is one of the most effective media for alluring public towards you. Plus, it increases customer awareness. Therefore, in order to ensure success in catering, you need to follow all the above guidelines we have provided in this piece of article.

For more information and related queries, you can contact Swarit Advisors. Furthermore, if you face any problem in getting registrations, we will help you out with that too.

 

 

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Khushboo Priya is an experienced Legal content writer with a prodigious proof-reading and research & development skill.

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