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Tata Capital > Blog > Loan for Business > How to Start A Catering Business in India?

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How to Start A Catering Business in India?

How to Start A Catering Business in India?

In a country where weddings and festivals are week-long, and food plays such an essential part in celebrations, starting a food catering business is one of the best start-up ideas out there.

And if you’re someone whose food is always the talk of the party, who enjoys making delicious food and who has an entrepreneurship streak, setting up a catering business is right up your alley.

But starting a new venture can be daunting and overwhelming. And so, to help you give flight to your dreams, we’ll discuss how to start a catering business in India.

Scope of catering business in India

Whether it’s a birthday party, a wedding or a corporate event, the food offered is one of the most important factors to consider. Not only because of the role food plays in Indian culture but also because of its ability to bring people together and make the occasion memorable.

And this is why catering businesses in India have a high demand. In order to provide delicious, well-cooked and appropriate food, hosts often enlist their services. From cocktail snacks for an art show to a multi-cuisine buffet for a big fat Indian wedding, caterers are required everywhere.

And as the world recovers from the pandemic and parties begin again, your food catering business will be launching right when the market demand increases.

Process to start catering business in India

Here are eight steps you should take to start a successful catering business in India.

#1 Conduct market research

The first step for a successful catering business startup is to research your competition. It is essential to gather data on their location, target audience, the cuisines they specialise in, and most importantly, their cost. This will give you a good idea about what your business needs to achieve to break into the market.

Conducting market research means calculating your total addressable market (TAM). This is the total market demand for your service. It helps you get a concrete understanding of the potential of your catering business.

#2 Formulate a business plan

Based on your market research, you must develop a business plan. This is a detailed blueprint of how your business is going to be run. This requires you to specify your business’s unique selling point (USP). Deciding your business’s niche at this stage is critical as well.

For instance, will your business offer a private chef for an intimate evening, provide banquet lunch boxes, or cater large-scale events? You can also specify whether you will be catering personal events, such as weddings and birthday parties or corporate ones, like conferences or company retreats.

#3 Calculate your financial needs

This step entails calculating your budget and source of capital. Any new business needs solid capital to sustain itself before it starts making profits. And so, developing a financial plan is one of the most essential steps a catering business must take to be successful.

While capital needs vary from business to business, current market trends show that you would need somewhere around 20 Lakhs. This includes applying for licences, business expenses, rent, employee salaries etc.

And if you’re wondering how to finance this, we recommend exploring business loans as an option. With attractive interest rates and an easy application process, your dream of starting your own catering business can finally become a reality!

#4 Choose your business location

The next step is to decide the location for your business operations. You would need a fully functioning kitchen and adequate storage for starters. This should preferably be geographically close to your target market to reduce transportation time.

But this is also highly dependent on your business plan. For instance, if your business niche is small intimate parties, you can meet your orders from your own home kitchen. This will help you save on real estate expenditure greatly.

However, if you aim to cater banquet halls and big events, choosing a suitable location for your kitchen is advisable.

#5 Decide the menu

A catering business needs to have a set menu. And developing one depends on factors such as the price of raw materials, their quantity, competition’s pricing, and the like. This is also the time to look back and identify dishes that got you the most compliments. These will be crucial in building an exclusive menu that helps your business shine.

After the menu, you must calculate the cost. Each dish must be priced competitively to help you break into the market.

#6 Procure your equipment

The kitchen is the heart of operations for a catering business. And so, the appliances and equipment required for its smooth functioning must also be bought. This includes big-ticket purchases like refrigerators, fryers, ovens, stoves, and small equipment like pots, pans, spatulas, etc.

#7 Apply for the necessary permits and licences

You must register your catering business and apply for the required permits to start operations. Following are some of the licences and registrations you must apply for.

  • FSSAI licence
  • Trade licence
  • No objection certificate (NOC) from the electricity and fire departments
  • Registration under the shop and establishment act
  • Trademark registration
  • MSME registration
  • GST registrations

#8 Market your business

The last step before you begin operations is marketing your business. This means spreading the word and getting your business noticed by your target audience. You can do this through networking, posting on social media, sending emails offering early bird discounts or even setting up stalls to offer people samples of your food.

The idea is to create brand awareness and bring in customers. So, make sure to make your marketing efforts count!

Final thoughts

A catering business start-up has immense scope in India. And by following these easy steps, you can set up a successful food catering business in no time!

But as is the case with any new business, finance is a significant consideration. If you’re planning on dipping into your savings, we can offer an alternative. We at Tata Capital provide business loans at attractive interest rates and with quick approvals. This way, you can keep your savings safe for a rainy day and build your business at the same time! To learn more, visit our website and apply for a loan today!

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