“Café” refers to a relaxed and social setting where individuals unwind, enjoy, and indulge in various food items. It represents a type of eatery that offers tea, coffee, snacks, baked goods, and refreshments. In India, coffee consumption has notably surged over the last decade, primarily attributed to the thriving Café or Coffee Shop culture. A report by Techno Park Advisors highlighted that the Café Business constitutes approximately 11% of India’s total Food Service Market. In this blog, we shall see the essential checklist to start a cafe business in India.
Factors Driving the Expansion of Café Business
The expansion of the café business is boosted by several key factors:
1. Rising Middle Class
The growth of the café industry is closely linked to the increasing size and purchasing power of the middle class, which seeks affordable yet enjoyable dining experiences.
2. Increasing Brand Awareness
As consumers become more discerning and brand-conscious, café businesses that establish a strong brand identity can attract a loyal customer base.
3. Accessibility of International Experiences at Home
Cafés often offer international cuisine and beverages, allowing customers to enjoy global flavours without leaving their local communities.
4. Luxury and Comfort
Cafés provide an atmosphere of luxury and comfort, making them an appealing destination for relaxation, work, or socialising.
5. Status Symbol
Frequenting upscale or trendy cafés has become a status symbol for many, driving the demand for unique and exclusive café experiences.
6. Comfortable Seating Space
The availability of comfortable seating spaces in cafés encourages customers to linger, fostering a sense of comfort and community.
7. Insta Worth Cool Décor and Ambiance
Cafés with aesthetically pleasing and Instagram-worthy decor and ambiance attract younger generations and social media enthusiasts.
8. Growing Youth Culture
Cafés have become hubs for youth culture, offering spaces for meetings, study sessions, and creative gatherings.
9. Various Continental Cuisines
The diverse culinary offerings in cafés, including continental cuisines, cater to a wide range of tastes and preferences.
10. Cost-Effective Food Options
Cafés often provide cost-effective dining options, making them an attractive choice for budget-conscious consumers seeking quality food and beverages.
Checklist to Start a Cafe Business in India
Mentioned below is a detailed checklist to start a café business in India:
Drafting an Effective Business Plan
The first item on the checklist to start a café business in India is a well-thought-out business plan. This plan should encompass the vision, mission, objectives, and profit goals of your café. It’s crucial to emphasise that an effective business plan is the result of meticulous research, strategic planning, and flawless execution.
Choosing an Eye-Catching Location
Next on the checklist to start a café business in India is selecting the right location for the success of a café in India. The location contributes significantly to the growth or failure of your café. Factors to consider include:
1. Footfall Area: A café in a crowded or high footfall area typically performs better than one in a less crowded area.
2. Visibility and Accessibility: Cafés located on the ground level tend to attract more customers due to their high visibility and easy accessibility.
Preparing a Mindful Budget
Third on the checklist to start a café business in India is financial planning, which is essential for launching a café business successfully. Be clear about your funding sources and budget requirements, which can vary depending on factors such as:
- Business Concept
- Legal and Administrative Costs
- Location or Geographic Costs
- Equipment Costs
- Labour Costs
- Construction and Designing Costs
- Furniture or Fixture Costs
- Raw Material Costs
- Branding Costs
- Marketing Costs
- Fixed Costs
- Additional Costs
Consider financing options like business loans or funding from co-operative societies to cover your startup costs, which can range from Rs 10 lakhs to 15 lakhs, or more for a bakery café.
Conducting Market Research
Before launching your café, conduct comprehensive market research to gain insights into the industry as the next item on your checklist to start a café business in India. Market research should include:
1. Understanding Competitors: Identify your competitors and analyse their strengths and weaknesses.
2. Consumer Preferences: Understand consumer tastes, preferences, and demands.
3. Raw Material Suppliers: Establish connections with reliable raw material suppliers.
4. Profit Maximisation: Explore strategies to enhance your profit margins.
5. Menu and Pricing Analysis: Visit different cafés and restaurants to explore various cuisines, menus, and pricing strategies.
A successful café in India is based on a well-structured business plan, a strategic location, budget management, and thorough market research. By following this checklist, you can increase your chances of running a prosperous café business.
Creating an Attractive and Cost-Effective Menu
In the highly competitive food industry, the next step of your checklist to start a café business in India is based on three vital factors: taste, variety, and pricing. Crafting an appealing and cost-effective menu is paramount for attracting and retaining customers. The key considerations are:
1. Strategic Pricing: Carefully determine menu pricing to strike a balance between covering costs and generating profits. A cost-effective menu is more likely to attract customers.
2. Variety and Trendiness: Ensure your menu caters to customer preferences and current food trends. Consider offering baked items, beer, wine, international cuisines, and other popular choices.
Competitor Analysis
In this next important item on your checklist to start a café business in India, note that location plays a crucial role in addressing competition, as customers have the option to explore alternative cafés and food joints. When selecting a café location in India, consider these strategies:
1. Low Competition, High Potential: Choose a location with less direct competition but a substantial customer base to attract more patrons.
2. Substitute Options: Recognise that substitutes like McDonald’s, Pizza Hut, Subway, and other eateries can also impact your café’s success. Be prepared to differentiate your offerings.
Mandatory Registrations and Licences for Café Business
An important stage in the checklist to start a café business in India are the several mandatory registrations and licences to ensure compliance with legal requirements. The list of essential registrations and licences are:
1. Business Registration: Depending on the type of café (e.g., partnership firm), obtain the relevant business registration, such as Partnership Firm Registration under the Indian Partnership Act, 1932.
2. FSSAI Licence: As a Food Business Operator, acquire the Food Safety and Standards Authority of India Licence before commencing operations.
3. Eating House Licence: Obtain an Eating House Licence from the Licencing Police Commissioner of your state, as required for cafés operating in hotels, cinema halls, and swimming pools.
4. Health or Trade Licence: Secure a Trade Licence from both the Health Department and Municipal Corporation of your state to run a café.
5. Fire Security Certificate: Ensure proper fire safety measures and obtain a Fire Security Certificate or Fire NOC from the state’s Fire Department.
6. Shop and Establishment Licence: Protect workers’ rights by obtaining a Shop and Establishment Licence, designed to safeguard employees in cafés.
7. Trademark Registration: While not mandatory, consider trademark registration to safeguard your café’s brand name and logo from duplication or imitation.
8. Music Licence: If you plan to play music in your café, obtain a Music Licence from the Indian Performing Rights Society.
9. Certificate of Environmental Clearance: Depending on the environmental impact, obtain a CEC from the Ministry of Environment and Forest.
10. Pollution Certificate: Ensure your café complies with environmental regulations by obtaining a Pollution Certificate from the relevant authority.
11. Insurance: Cafés are increasingly required to hold insurance policies like Product Liability, Fire Policy, and Public Liability.
12. GST Registration: Apply for GST Registration if your café’s annual turnover exceeds the threshold limit of Rs 40 lakhs (Rs 20 lakhs for special states).
Purchasing Durable Café Equipment
Before commencing business operations, it is imperative for café owners to invest in robust and durable equipment as the next important step in the checklist to start a café business in India. The quality of equipment significantly impacts the café’s performance and customer satisfaction. Avoid using old or subpar equipment that can lead to revenue losses and customer dissatisfaction. While some second-hand items may be suitable for initial use, focus on the following essential equipment:
- Espresso Machine
- Coffee Grinder
- Refrigerator
- Deep Freezer
- 2 Mixers
- Mop Sink and Installation
- Mugs/Glasses
- Convection Oven
- Commercial Drip Coffee Maker
- Chairs and Tables
- Outdoor Furniture
- Small wares
- Computer, Printer, and POS System
- Dishwasher (if required)
- Music System
- Microwave
- Electronic Scales
- Display Showcase
- Outside Signs and Displays
- Internal Displays and Signage
- Coffee Beans Inventory
Hiring Qualified Staff
In the checklist to start a café business in India, one must note that a successful café relies on a qualified and competent staff to provide exceptional service. The staff directly interacts with customers, making proper customer service essential for building a loyal customer base. The key roles needed to effectively run a café in India include:
- Chef
- Baristas
- Servers
- Manager
- Cashier
- Cleaning Staff
Designing and Branding Your Café
The design and characterisation of your café play a pivotal role in attracting and retaining customers and form the next item in your checklist to start a café business in India. The café’s interior should align with the target customer base, whether it’s modern, retro, sophisticated, family-friendly, health-focused, or themed around other concepts. Here’s how to create a captivating café atmosphere:
1. Understand the Target Audience: Design your café based on the preferences of your target audience, but avoid trying to please everyone.
2. Theme-Based Interiors: Choose a theme that resonates with your target audience, and use it as a foundation for your café’s aesthetics.
3. Furniture and Fixtures: Ensure your furniture, fixtures, storefront, and display showcases match the chosen theme to create a cohesive ambiance.
4. Efficient Workforce: Combine the theme with an efficient and customer-focused workforce to make the café experience memorable for your patrons.
By focusing on the quality of equipment, hiring skilled staff, and creating an appealing café atmosphere, you can enhance the overall success of your café shop in India and cultivate a loyal customer base by ensuring this item on your checklist to start a café business in India.
Marketing and Promotion Strategies
After branding, the next step in your checklist to start a café business in India is marketing and promotional strategies. Here’s how to boost your café’s reputation:
1. Word of Mouth:
- Provide a welcoming ambiance and maintain high food quality and taste to encourage positive word-of-mouth recommendations from satisfied customers.
- Loyal customers can become brand ambassadors, attracting more patrons to your café.
2. Social media:
- Collaborate with renowned food bloggers and invite them to review your café’s ambiance and food quality.
- Encourage customers to follow your social media pages for exclusive discounts and promotions.
Develop an Engaging Website
Building an attention-grabbing website is a critical step in establishing your café’s online presence. This is one of the significant steps in your checklist to start a café business in India. Ensure that your website includes:
- Detailed information about your café, including menus and contact details.
- Engaging and personal content that tells your café’s story.
- High-quality food images and café videos to entice potential customers.
- Links to your Instagram and Facebook pages for cross-promotion.
Implementing a Sales System
Next on the checklist to start a café business in India is to adapt to the digital payment trend. For this, ensure your café accepts Visa and Mastercard credit and debit cards. Consider the following:
- Use a mechanical cash register to track cash and sales statistics.
- Implement a Point of Sale (POS) system to analyse profitability and sales data. This system can help identify underperforming menu items.
Maintenance and Cleanliness
Maintain a clean and hygienic environment to create a pleasant customer experience as the next item on the checklist to start a café business in India. Develop a cleaning schedule based on equipment and area needs:
- Regularly clean equipment, surfaces, and utensils on an hourly, daily, or weekly basis.
- Ensure the seating area is consistently clean to enhance customer satisfaction.
Customer Grievance and Recovery Mechanism
An important issue that most owners tend to forget in the checklist to start a café business in India is effective customer service and issue resolution. Train your staff to handle common mistakes, such as order mix-ups, food or drink spills, or subpar food items, by:
- Offering an extra item or service for free to resolve customer grievances.
- Prioritising and addressing annoyed customers promptly.
- Providing refunds or replacements for dissatisfied customers to ensure their orders meet their expectations.
Starting and Operating Your Café
Finally, after carefully planning and implementing the above steps, the last step of the checklist to start a café business in India is to start and run your café shop in India. This includes the daily operations, food preparation, serving customers, and maintaining the high standards you have set for your café. Consistency in quality, service, and customer experience will be key to the ongoing success of your café business.
Final Thoughts
Running a café shop in India is a complex endeavour that demands careful planning and execution. From drafting a well-thought-out business plan to ensuring compliance with various licences and registrations, every step in the checklist to start a café business in India plays a pivotal role in the café’s success. Selecting the right location, curating an appealing yet cost-effective menu, and hiring a qualified team are all critical components. Moreover, maintaining impeccable cleanliness standards and addressing customer grievances effectively contribute to the café’s reputation and sustainability.
Ultimately, success in the café business in India is based on a combination of factors, including quality, service, location, and innovation. By diligently following this checklist to start a café business in India, entrepreneurs can pave the way for a thriving and prosperous café venture in this diverse and dynamic market.
