Being a proud owner of a restaurant, especially that of a restaurant and bar, or restro-bar seems like a glamorous job. Running your own restaurant business is indeed a financially rewarding business with high returns and is also considered easier and more fascinating than most jobs. However, glorious as it may seem, it is also one of the most tedious businesses out there, with high risks. In fact, 60% of all restaurants shut down within the first year of operations. Therefore, it is important to have a clear plan and understanding of the business before you venture out into the restaurant industry.
How to Open a Restaurant and Bar
In this particular article, we’ll discuss how to open a successful restaurant and bar in India. You will get to know about the investments, what kind of location you need, the required workforce, and the licenses needed for opening and running a restaurant and bar. However, before you move ahead, you need to decide what kind of restaurant cum bar you are going to open. There are six types of restaurant and bar formats, namely-
- Specialty Bar
- Brewpub or Beer Bar
- Sports Bar
- Neighborhood Bar
- Franchise bar
Once you have decided the format, you can now consider the other requirements for opening a restro-bar.
1. How to Decide the Location of the Restaurant and Bar
Unlike casual dining restaurants, the restaurant cum bar needs a space of around 5,000 SqFt to 10,000 SqFt ideally spread over one to two floors. In present times, the trend is to have an open and a closed sitting area so as that customer can enjoy both kind of ambiance based on their preferred choice. Apart from that, you should look for good high-end shopping streets and markets, or high-end malls and near office complexes. According to experts, locations which are near to office complexes which have more than 10,000 to 20,000 employees are the best places to open restro-bars as footfalls are high. It is more likely that the employees to turn around to the nearest bar or pub to catch up their colleagues and friends post office hours. However, getting a space of 5000 SqFt – 10,000 SqFt isn’t easy. The average rent for space around 5,000 SqFt can be around Rs 1.5 lakh to 2 lakh (depending upon the location). Also, you should keep in mind that just being present in the right market isn’t enough; you should also have the right accessibility as well so as to get customers and right footfall. Choose an area which has a designated parking space.
The total cost of acquiring a space for restaurant and bar comes out to be around Rs 6 lakhs (one month advance and two-month security). Read in detail about how to choose the perfect location for your restaurant here.
2. Choosing the Right Kitchen Equipment and Raw Material
It is essential to have a sturdy backend for your restaurant and bar. Study Kitchen equipment and good quality raw material help achieve smooth functioning of the backend.
Having the right equipment not just make the whole process easy but it also helps in having less dependency on the high-skilled employees. According to industry experts, if you get the right equipment such as burners, fryers, ovens you can drastically save on costs in the long run as they give high returns in terms of quality and speed. Some of the equipment such as working tables and racks can be bought old or previously used if you want to save costs. The cost of the total kitchen set up also depends upon the cuisine one wants to serve.
The total cost of kitchen equipment may vary from Rs 5 lakhs to Rs 7 lakhs. Also, the raw material at the time of installation may cost between Rs 1.5 lakhs to Rs 2 lakhs. And since we are opening a bar as well, the liquor storage may cost around Rs 10-Rs 12 lakhs. Apart from the kitchen equipment, one should also have good crockery as customers pay attention to each and every detail. A good crockery and bar set-up for a restaurant and bar would cost Rs 6 lakhs.
3. Service Area of the Restaurant and Bar
Customers usually visit restro-bars to relax and have a good time. Thus choose the ambience and colours of your restaurant that promotes this feeling. Warm shades are usually preferred for restro-bars. Apart from this, the furniture should be equally comfortable. So, it is advised to have more of soft cushy seats, sofas, loungers and comfortable chairs for dining of the guests. You can further hire an interior designer for giving a complete look and feel of the restro-bar. The professionals may charge you on the upside but the cost will be minimal in the long run if your bar cum restaurant does well. The total cost of interiors, plus furniture may cost you around Rs 15 lakhs – Rs 20 lakhs.
Apart from that, a good POS is a dire necessity as the inventory for the restaurant and bar is pretty huge and can be difficult to manage. Think of your POS as not just a billing software, but as an investment that can help you manage your restaurant better, and also help cut down costs in several areas. Integrated inventory management, CRM, in-depth reporting, and analytics are some of the must-have features in your POS for the restaurant. The basic POS software can cost you around Rs 30,000 per year, but it is advisable to go for the complete restaurant management feature, as it helps you in the long run.
4. Licenses and Registration Needed for Restro-bars
The restaurant and bar format require more licenses and approvals than any other restaurant format. A minimum of eight licenses is required for your restro-bar to open.
The licenses required to open a restaurant and bar are as follows-
- Liquor License
- Shop Establishment License
- Police Eating House License
- Local Municipal Authority License
- FSSAI License
- Fire Safety Certificate
- VAT Registration
Other licenses required are Music License, Certificate of Environmental Clearance and License from the Fire Department. Among all, liquor licenses, FSSAI license, VAT registration and local municipal health licenses are the most important one to start the restaurant operations with. The rest can be applied for once the bar cum restaurant is operational and can be procured in next two to three months. The total cost of licenses can be around Rs 10 lakhs.
5. Workforce or Manpower Needed for a Restro-bar
An average of 25-30 staff is required for the proper and smooth functioning of a restaurant cum bar. This may include the Head Chef, Ched De Partie, Commis level chefs, helpers, waiters, captain, Bartenders, and bouncers. The salaries of the staff depend upon their experience and skills. Find below the average salary estimation of the employees. Below are the details of the number of employees required and their salaries in a restro-bar.
6. Deciding the Staff Uniform
A smartly dressed staff leaves a good impression on the customers. Since a restaurant and bar is usually a big establishment, it is even more important for your staff to look sharp. For waiters, you can go for shirts and trousers while for kitchen staff t-shirts and chef coats depending upon the level they are working at. At the initial stage of operations, one should have proper branding on employee uniforms, which gives your restaurant an upmarket feel. We recommend good Chef coats (25 units), shirts, trousers, t-shirt and Cap (50 units) which will cost around Rs 75,000 and last for at least six months of the operations.
7. Marketing the Right Way
While taking care of the basic necessities of the restaurant, the small and finer details are often missed. For example, you may consider your menu to be just a piece of paper with your dishes listed on it, but it is so much more than that. A well-designed menu with the logo of your restaurant goes a long way in restaurant branding. It is advised to hire a professional designer who can help you in getting the desired logo and menu at a cost not exceeding more than Rs 2,000. Apart from this a well-designed light board, the menu for tables and pamphlets for offline marketing are essential parts of Marketing. It is advised to invest in developing good and attractive table menu. One can go from lavish hard cardboard menu to a laminated booklet. If you have the budget, you can also run paid ads and campaigns on the social media for digital marketing. (Read this article if you want to run the digital marketing campaigns for your restaurant.)
Also, it is important to explain each and every dish in one line so as to help customers order. Remember to train your staff to upsell the menu. Also, online tie-ups are essential in today’s internet age to gain customer traction which will not cost more than a meeting with the alliance team of the food-tech portal.
A restro-bar requires more capital investment at the initial stage but is also one of the most lucrative and high ROI formats in the restaurant business. However, it also one of the most daunting formats, requiring extreme care and involvement of the restaurant owner. Since you’d be catering to more number of customers, and handling a bigger establishment, your involvement as an owner becomes a must for the successful operation of your restaurant cum bar.
It is essential that you keep a track of your business, right from inventory to the sales, and stay updated with the daily reports. For instance, you can use POSist’s Cockpit App that gives you real-time reports and updates about your restaurant business, that you can access right on your mobile.