The rising popularity of food vans can be attributed to their lower initial startup costs compared to traditional restaurants or other formats. Despite being a relatively novel startup concept, when executed judiciously, a food truck has the potential to evolve into a successful business strategy. Essential legal permissions to open food van and tea business in India include obtaining a trade licence from the local MCD and securing an FSSAI licence for the food van. These regulatory approvals are integral to ensuring compliance and establishing a solid foundation for the operation of the business. In this blog, we shall see in detail the legal permissions to open food van and tea business in India.
Advantages of Starting a Food Truck Business in India
Mentioned below are the benefits of a food truck business in India:
1. Flexible Location
In businesses, the significant of a strategic location cannot be denied much. For traditional establishments like cafes or restaurants, altering there location can be a challenging and costly endeavour. However, the food truck business in India offers a distinct advantage in terms of flexibility in location. This flexibility allows food truck owners to easily operate in various locations, maximising their reach and customer base.
2. Low Expense
One of the main advantages of entering the mobile food industry in India is its affordability. In contrast to the significant capital needed for establishing a complete hotel or eatery, launching a mobile food unit is considerably more budget-friendly. Entrepreneurs can enjoy cost reductions of approximately 30 to 35%, making it a financially feasible choice for individuals seeking to join the food service sector.
Factors Contributing to Cost Reduction in a Food Truck Business
The factors for low cost of food trucks are:
1. Lesser Space
The inherent compactness of a food truck leads to reduced space needs compared to traditional brick-and-mortar establishments. This not only lowers operational costs but also provides greater mobility and flexibility in selecting locations.
2. Minimal Equipment and Cutlery
A food van typically requires fewer and more streamlined equipment and cutlery compared to a full-service restaurant. This not only lowers the initial setup costs but also reduces ongoing maintenance expenses.
3. Minimal Furnishing
Unlike traditional restaurants that demand elaborate interior furnishings, a food truck can operate with minimal furnishing. This simplicity contributes significantly to cost reduction, making it an attractive option for entrepreneurs seeking to minimise initial investment.
4. Less Staff
The operational model of a food truck often requires fewer staff members compared to a conventional restaurant. This reduction in labour costs further contributes to the overall cost-effectiveness of the business.
5. No Rent or Lease
One of the notable advantages of a food truck is the absence of a fixed location and the associated costs of rent or lease. This eliminates a significant overhead expense, allowing the business to allocate resources more efficiently.
Procedure for Starting a Food Van and Tea Business in India
Mentioned below is the procedure to open food van and tea business in India:
1. Develop a Strong Business Plan
The foundational step in launching a food van and tea business is to create a comprehensive business plan. This roadmap should outline your goals, strategies, and plans for sustainable growth. A clear business plan serves as a guiding document for the entire venture.
2. Conduct Market Research
Thorough market research is essential to identify your target audience and understand their preferences. Based on this information, choose a specific niche within the food and tea market. Craft a menu that caters to the identified niche, ensuring a unique selling proposition for your business.
3. Estimate Operation Costs
Prepare a detailed estimate of the costs involved in the entire operation. If funds are not readily available, explore options such as seeking financial support from friends, family, or approaching banks and other financial institutions for credit.
4. Acquire a Food Van
Search the market for a suitable food van on sale or consider buying a new food truck if financially feasible. The choice of the vehicle is crucial, as it will serve as the mobile kitchen for your business.
5. Equip and Set Up the Food Van
After acquiring the food van, order necessary kitchen equipment and raw materials. Install the equipment in the truck to ensure it is fully functional and ready for operation.
6. Obtain Necessary Licences and Permits
Comply with regulatory requirements by obtaining all the necessary licences and permits to operate a food van and tea business in India. This step is crucial to avoid legal complications in the future.
7. Consider Hiring and Seek Initial Support
Evaluate whether additional staff is needed for efficient operation. Initially, consider seeking help from friends or family members to reduce operational expenses. Hiring extra help may become necessary as the business grows.
8. Develop a Marketing Plan
Create a sustainable marketing plan or strategy to promote your food van and tea business. Focus on building a positive word-of-mouth reputation as it is a powerful tool to attract customers in the food industry.
Costs Associated with Opening a Food Van in India
The costs of opening a food van in India involve:
1. Food Truck and Refurbishment
The primary expenditure in initiating a food van business in India is acquiring the food truck and essential kitchen equipment. A new 18-foot-long food truck from manufacturers like Ashok Leyland, Tata, or Mahindra can range from Rs. 7 to Rs. 8 lakhs. Alternatively, choosing a second-hand truck, priced at approximately Rs. 3 to Rs. 4 lakhs, might entail an additional Rs. 1 lakh for refurbishment.
2. Kitchen Equipment
The overall expenditure for necessary kitchen gear, encompassing a juicer mixer, refrigerator/freezer, grill, steamer, exhaust, stove, and deep fryer, is approximated to be around Rs. 3 lakhs.
3. Power Supply and Fuel
Investing in generators, large batteries with inverters, and the fuel needed to run the food truck’s equipment is an additional cost, totalling approximately Rs. 40,000.
4. Licences, Permits, and Insurance
Covering insurance costs and processing fees for obtaining licences and permits is crucial. This expense is estimated to be around Rs. 50,000 to ensure legal compliance and smooth operation.
5. Other Operational Costs
· Point-Of-Sale Software: Investing in Point-Of-Sale software for the business, essential for transactions, may cost approximately Rs. 1500 per month.
· Staff Uniform: A one-time cost for staff uniforms, including chefs, is estimated to be around Rs. 5000.
· Marketing Campaigns: Allocating funds for marketing campaigns is essential for promoting the business and attracting customers. This cost can vary from Rs. 5,000 to Rs. 20,000, depending on the scale and approach of the campaign.
List of Legal Permissions to Open Food Van and Tea Business in India
Mentioned below is the list of legal permissions to open food van and tea business in India:
1. FSSAI Registration or Licence:
One of the basic legal permissions to open food van and tea business in India is FSSAI licence. For establishments generating less than Rs. 12 lakhs annually, an FSSAI registration is required.
2. NOC from Fire Department:
One of the basic legal permissions to open food van and tea business in India is NOC from the fire department. Due to the presence of gas and electric appliances in the food truck, a No Objection Certificate from the Fire Department is necessary to mitigate fire hasards.
3. Authorisation from Local Municipal Body:
Depending on the location, an authorisation or permission letter from the local municipal body may be required as part of the legal permissions to open food van and tea business in India.
4. Vehicle Licence:
Since a commercial vehicle is used for the business, a vehicle licence issued by the Regional Transport Office is essential as part of legal permissions to open food van and tea business in India.
5. Trade Licence or Eating House Licence:
One of the basic legal permissions to open food van and tea business in India is a eating house or trade licence. If mandated by the municipality, obtaining a Trade Licence or Eating House Licence is necessary. This licence is typically valid for one year.
6. Shops and Establishment Registration:
If the business employs more than ten individuals, a Shops and Establishment Registration from the State’s Labour Department becomes vital as part of the legal permissions to open food van and tea business in India.
7. Pollution Clearance Certificate:
Obtain a Pollution Clearance Certificate from the State’s Pollution Control Board to ensure compliance with environmental regulations as part of legal permissions to open food van and tea business in India.
8. Business Registration:
Complete the registration of the business as either as a Sole Proprietorship, Partnership, or Limited Liability Partnership to reduce liability. As part of the legal permissions to open food van and tea business in India, acquire also a company PAN card and TAN.
9. GST Registration:
An essential step for the legal permissions to open food van and tea business in India is obtaining GST registration.
Final Thoughts
Several vital legal permissions to open food van and tea business in India are required to commence the said business in India. Essential permit includes authorization from there local municipal body, a vehicle license from the RTO, and a Trade License or Eating House License. For businesses which might have more than ten employees, Shops and Establishment Registration is also consider to be mandatory, and a Pollution Clearance Certificate ensures environmental compliance. Successfully navigating these legal requirements involves selecting the appropriate business registration and obtaining GST registration online.
