Food is an integral part of our life. We live on food. Everyone needs food, and there will always be a demand for it. That’s why the Food business in India or the world is always going to be profitable. Considering this, many people aim to start a Food business in India. But before that, one needs to understand the ins and outs of the food business completely. Moreover, many people find Registration & License for the food business in India to be complex. Therefore, we bring you this guide. This guide explains all about How to Start Food Business in India in detail.
Understand Food business in India
Any food business involved in the manufacture, importation, processing, packaging, storage, distribution or sale of any food in India is a food business. A food company in India provides the general public with the following food services:
- Catering Services and Restaurants
- Bakery and Cafe
- Sweet Shops and Truck for Food
- Food delivering services
- Homemade Food Business etc.
Moreover, now like every other business, the food business has become online. Consequently, The online food business is popularly known as Foodtech.
The food tech generally consists of services such as home delivery of groceries, online food delivery aggregators, e-sellers, etc.
Opportunities for Food business in India
Opportunities for the Food business in India are several. The reason is India is one of the leading exporters of spices and other horticultural products.
Furthermore, India is the second-largest populated country. It simply means a huge market for the food business. Food is a basic thing, and every single one in this vast population needs it.
As of 2018, the food and restaurant sector grew at a level of a CAGR of 9 percent.
As a result, it is unbelievable how Indians have changed their dietary habits and routines, especially the millennia.
Quick-service (QSR) restaurants and fast-food restaurants have become an important part of our diets.
Seeing how the market is stable is a time to start a lucrative, low investment food company.
Documents Required to start a food business in India
Before starting a food business, it is important that one keeps the following documents handy.
- FSSAI License
- Shop Establishment Certificate
- Site plan and layout of the premises
- Water quality report
- Fire NOC Certificate
- Health NOC Certificate
- GST certificate
Evaluate All Costs and the Market before starting Food Business
One of the most important things about starting any business is analysing the costs and other factors. The same goes for the Food business in India. Following are the costs that you must evaluate before starting a food business.
- Raw Material Cost: Any food is a combination of a variety of raw materials. Therefore, one should finalize the vendors for sourcing the raw materials in advance to ensure a smooth supply of stock ingredients.
- Labour Cost: Labour cost is the second most important food business cost that adds to the expenditures. Therefore, one must find the best labour beforehand that works right at affordable prices.
- Operating Costs: Besides Raw Material costs and Labour costs, there are multiple operating costs involved in the food business. For example, the Restaurant business under food business involves operating costs such as rent and Interiors. Similarly, a food delivery business may involve marketing costs.
- Premises Rental Costs: If you are planning to start a restaurant you need to opt out of a famous place in the city where footfall is massive hence rental is also costly. Premises rent is a fixed cost which is a substantial amount which cannot be ignored while evaluating overall cost.
Therefore, one must also evaluate operating costs and how to manage them before commencing any type of food business in India.
Install Latest Technology at your Food business
In this digital era, it is almost impossible to earn profits. Therefore, you must go for website or app development as per your business. Furthermore, install the right POS as it can help in the long run.
Registration and Licensing for starting Food Business
For starting a food business in India, it is important to know about the Registration and Licenses.
As a consequence, failing to get the right registration and license can seriously damage the profitability and credibility of your food business.
In addition, there can be hefty penalties from the government if the business works without some mandatory registrations and licenses.
Therefore, let us look at some of the most important and mandatory steps to apply for when starting a food business in India.
As we all know, before starting any business, it is vital to understand the legal business structure of the business. The same goes for the Food business in India. There are several types of company formation for food businesses. For instance,
- Private Limited Company
- Public Limited Company
- One Person Company
- Partnership Firm
- Limited Liability Partnership
- Sole Proprietorship
One can apply for these as per their eligibility.
GST Registration & Tax Compliance
We all know, the organization in the food business has many mandatory tax compliances. Presently, the taxation system is GST(Goods and Services Tax). To get a GSTIN number for the food business in India, you need to provide three documents as follows.
- PAN or Permanent Account Number card.
- Professional Tax License for employing salaried staff. The tax is paid to every employee that earns Rs—10,000 or more in a month.
- No Objection Certificate from owner or neighbors
Therefore, any company formed must get GST Registration to keep the food business running properly. Besides, it offers tax input credit and several other benefits.
Any food business operator must obtain a Trade License to begin the business. The concerned municipality grants Trade License. Moreover, the trade licenses issued in most of the States are valid for one year, so you can easily get them. It is important to note that each branch requires an individual trade license if you have multiple branches of the food business.
ISO Certification for Food Business
Now that we have formed a food business company and set up its taxation system. It is time to get started with business and implement best practices to keep it running smoothly.
Thus, we need ISO Certification. All food suppliers, regardless of their scale or quality, have a duty to manage the quality of their food products and their customers’ health.
That’s why ISO created the ISO 22000 Certification.
It implements the best food safety management system that is applicable to every company in the food supply chain, from farm to fork.
Furthermore, if you are into food manufacturing or delivering business, you must get ISO 9001:2015 Certification. It is the most popular ISO Certification and applicable to every industry in the market.
A quality management system that is ISO 9001 Certification reflects a dedication to delivering and producing high-quality food products and services.
But that’s not the only thing. If one wants to make the business successful in the long run, one can start with other ISO certifications.
Additionally, these ISO Certifications allow food businesses to meet legal requirements and the safety of employees to customers.
FSSAI stands for Food Safety and Standards Authority of India. Whether it’s manufacturing, refining, packaging, shipping, or storing, it is mandatory to have an FSSAI Registration or a food license if you work in the food industry.
It was formed under the Food Safety and Standards Act, 2006. The objective behind the FSSAI registration/ food license is to make available safe, pure, wholesome, and nutritious food to consumers.
It has several benefits. For example, FSSAI License assures your customers that the food you prepare, store, or sell is of the highest quality and is approved by regulatory authorities.
Furthermore, it provides government grants and loans that are readily available to organizations.
Now that we have seen so far the mandatory steps to start a food business in India. We might wonder how to get funds and can the government support us in starting the food business?
The answer to this major question is Yes! Food businesses in India can get MSME Registration Or Udyam Registration.
It is the government scheme if someone wants to benefit from the Central or State Government and the Banking Sector. The benefits include financial support, training, and much more.
When commencing business or organization is to set yourself apart from the competition. Otherwise, it can seriously damage the credibility of your business, and competitors might misuse your branding for food business. Hence, we need Trademark Registration. It provides legal protection plus several other benefits, such as maintaining a degree of confidence that no one cannot erase.
If the food company wants to offer alcohol on its premises, it must apply for a license. The Liquor Shop License is granted by the local Excise Commissioner to any food company that wants to serve any drink that contains liquor.
Barcode Registration is essential for initiating a food business as there are multiple food items involved in the business. Consequently, it becomes harder to manage all the items. Without proper management, businesses can not succeed. Furthermore, Barcode registration provides several advantages for the food business in India. For instance,
- Quick and precise data tracking of food items anytime anywhere.
- Greater responsiveness to trade customers and consumers
- Fewer errors in the recognition of foods
- Improved company to company communications throughout the supply chain
To sum up, Starting a food business in India is one of the most profitable business ideas. However, it is an uphill task. Therefore, one must enter the market after proper planning, guidance, and necessary registrations or licenses.
If you require any kind of guidance related to How to Start Food Business in India, please feel free to contact our business advisors at 8881-069-069.
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