We have all at some point had a few food business ideas and thought that perhaps we should open a restaurant or a cafe, but hardly anyone ever opens a restaurant impulsively. Even if you have a restaurant concept idea, the first thing that needs to be decided while opening a restaurant business is the type of restaurant or food business format. There are various types of restaurant formats, and all these require different investments and have different profit margins and the time necessary for them to reach their breakeven point also differs from format to format.
Read more about restaurant profit margins and how to increase them here. In this article, we have discussed the top food business ideas that don’t require much investment, involve minimum risks and garner high-profit margins as well!
High-Profit Restaurant and Food Business Ideas
Different restaurant concepts have different profit margins. Here is a list of high-profit food business ideas in which you can venture to garner immense profits.
1. Quick Service Restaurants
Quick Service Restaurants is one of the most popular food business ideas as it is low on investment and risk and yet generates high profits. The investment required for opening a Quick Service Restaurant is around Rs 10-15 lakh, out of which a significant proportion would be spent on marketing the restaurant. Location is of utmost importance in a QSR since the entire business is dependent on the high volume of orders. Thus, you must set up a QSR in any densely populated area; it could be a high footfall market or a mall, big office complex, highways, hospitals, airports or university area. Quick Service Restaurants generally serve fast food that is semi-prepared from beforehand or can be prepared in a short amount of time.
With this restaurant business idea, you end up saving on the cost of setting up the seating space, furniture, and the crockery. You also need fewer staff members since; usually, QSRs are self-service restaurants. You would not have to do much brainstorming while getting your license in place, since you would require three licenses, shop establishment license, police eating house license and local municipal authority permission.
The average menu price for a meal for two at a Quick Service Restaurant is usually around Rs 500-600. Menu prices can vary according to the cuisine and the type of setup you have.
Since the initial investment required in this food business idea is relatively low, coupled with this is the relatively high rush of customers, makes QSRs garner a high-profit margin, which approximately amounts to 15-25%. This helps quick service restaurants to reach their breakeven point in 3-6 months given that it is running smoothly.
However, QSR as restaurant business idea should be considered only if you are on the lookout for making a brand. This means that whatever you will earn will be spent on further expansion. Hence, such long chain QSR formats usually require a minimum of 2 years to reach their break-even point and enjoy their profit margin.
With the bare minimum monthly maintenance involved, Quick Service Restaurants have the potential of having a blooming success. Find out how to open a Quick Service Restaurant here.
2. Casual Dine Restaurants
Casual Dine Restaurants are also a favorite restaurant concept idea for new as well as existing restaurateurs. The investments incurred in this formats aren’t that high, but they have the potential to reach the breakeven point within approximately 18 months. The Profit Margin of Casual Dine restaurant is usually around 20-25%, making it one of the high-profit food business ideas in the restaurant industry.
When it comes to Casual Dining Restaurant, it does not demand a posh locality hence the preferred location is high footfall area, malls and shopping streets (parking area is a must). Size of the area must not be less than 2000 sqft. The total investment required for opening a Casual Dine restaurant in India is roughly around 10-15 lakhs. The licenses required are Fire Safety Certificate, Shop Establishment, Police Eating House, Local Municipal authority permission with seating capacity, FSSAI Licenses, Liquor license, and GST Registration. The number of employees required is not less than 15 employees.
In contrast to their fine dining counterparts, the casual dining restaurant try and provide a more relaxed and casual environment with menu items that are working best in the market, presently, for example, burgers, sandwiches and pasta and of course they come with a range of bar menu. The average cost of customers per meal is Rs. 500 – Rs 1, 000 (for two).
According to a report, “Of a Rs 9,500 crore restaurant business, casual dining forms the core with approximately Rs 4,000 crore. This is expected to touch Rs 9,000 crore by 2018 according to industry estimates“. While the fine dines, the market remains around Rs 500 crore. The CDR market share rose from 2013 to 2016, and it is expected to rise again from 2016 (33%) to 2012(34%).”
This shows the immense potential that casual dining restaurants have in store in the years to come, making it one of the most profitable food business ideas. This article will serve as a step by step guide to open a Casual Dine Restaurant.
3. Food Trucks
The food truck is another food business idea that has an immense potential of having a high-profit margin. While the investment is as less as Rs 10-20 lakhs, the profit margin that you would incur is quite a lot.
The significant cost involved in opening a Food Truck is purchasing the Truck. A second-hand Truck can easily be converted to a Food Truck, the price of which can be around Rs 8-10 lakh. You also require only 3-4 employees to run a Food Truck. The licenses required for starting a food truck or a food cart are Fire Safety Certificate, Shop Establishment License, NOC from RTO, NOC from Municipal Corporation, FSSAI Mobile Vendor’s License and Kitchen Insurance.
With this restaurant business idea, you should always target high footfall areas, like shopping streets, office or college areas or densely populated localities. With this format, you will have the liberty to change your location because it is highly mobile!
It is not unusual to find Food Trucks having a long queue in most of the busy shopping streets or college areas. Here people are on the lookout for cheap and quick food, which they can quickly relish and get back to their work at hand. This makes this format extraordinarily profitable and can help you reach your breakeven point within 6 to 8 months. The estimated profit margin for a food truck and a food cart is roughly around 50%. However, the profit margins vary significantly from the type of food you serve. Profit Margins also vary from season to season and location to location.
Hence, if you are looking for high-profit food business ideas, then Food Trucks should be your choice. Find out how to open a Food Truck here.
4. Cloud Kitchens
If you are new to the restaurant industry and are looking for high-profit food business ideas, then you should sincerely consider opening a Cloud Kitchen. The initial investment in this food business idea is nearly negligible since you can cook at your house kitchen, which will have all the minimum equipment and utensils required. You can also save yourself from the monthly rentals that drain most restaurants. Your investment would not be more than 1-2 lakh. The area which you need to pay attention to apart from food in this restaurant business concept is marketing. You need to think of ways to market yourself virtually or through offline methods and get yourself integrated with various delivery platforms. Once this is correctly done, you will see the influx of orders and be able to reach your breakeven in no time.
In addition to small-scale cloud kitchens, there are also professional cloud kitchens, which operate on a larger scale. Read how to open a Cloud Kitchen Restaurant here.
We hope we have been able to provide you with a comprehensive understanding of what the high-profit food business ideas are. Now you can invest where you should invest and reap the rewards in abundance! Here are some other smart restaurant startup ideas that you should consider if you are planning to open a restaurant.