Between 2017 to 2023, the restaurant business in India grew at a CAGR of 7.31. These numbers will likely grow to 8.33 percent during the period 2024 to 2029, with its market share reaching $26.17 billion(Mordor Intelligence report). These athre significant numbers that will motivate aspiring restaurant owners. Needless to say, it will also inspire people to seek jobs in the restaurant business, with more and more young talent becoming chefs, kitchen staff or restaurant managers.

Starting a new business can be as exhausting as it is exciting if you do not know how to achieve what you are looking for. You must break your business goals into smaller milestones and document everything needed to achieve them without fail. And one of the essential things you would want to do is pen down the business model. Like any other business, starting a new restaurant will require you to define the prerequisites and the process before you can start making a lot of money from your new venture into the f & b business.

Get along with this blog post to learn everything about having a foolproof business model in place.

What is a business model?

A business model defines how you transition from setting up a business to becoming profitable. Literally speaking, it will consist of three major components - Value Proposition, Value Delivery and Value Capture. In comparison, the value proposition defines the target customer, product and service, and value delivery maps out the process of delivering the proposition. Value capture, on the other hand, is a forecast of the return made by the business following the alignment of proposition and delivery.

In the context of a restaurant, you will lay down what product (here, food) you will offer to your potential customers, which will conclude into a “Food Menu”. What marketing strategy will you opt for to reach customers? What costs will incur during the process and profits you will make upon sale - financial projections.

Your business plan will eventually conclude with writing a business plan for a restaurant with the best action plan.

Developing a Restaurant Business Model

It takes a lot of planning for a successful execution. Most of the time, it is 90% time spent in planning and just 10% in executing them. Thus, a significant part of your planning will go into penning down the following components of your business model before you go on to execute them on the grounds:

1. Doing the market research

   Market research is the first and foremost step where you’ll be identifying the total market size and your target customer. Depending on these, you will forecast your share of the total market and position yourself among your peers.

2. Defining a Unique Selling Proposition

   Businesses with unique selling propositions have the edge over their peers. KFC, for instance, marketed their chicken saying that its distinctive taste is due to the unique blend of 11 different herbs and spices.

3. Creating a simple yet compelling menu

   Menus are an exciting tour for a food lover. Thus, you must take care of the kind of experience users have when they interact with it. Follow standard design and structures that people are used to seeing, separating food based on categories with prices on the right-hand side. It helps users easily navigate the menu and pick what they want.

4. Creating a complete operational plan

   The components of a restaurant operation include food procurement, food preparation, staffing, staff training, technology usage, customer service, hygiene and safety compliance, among a few others. A carefully planned operation and action plan will help you run a restaurant business while managing any sort of conflict.

5. Having the best marketing and promotion strategy

   The price point makes a lot of difference when starting a food business in India. Thus, competitive pricing with lucrative discounts can become your marketing and promotion strategy to attract people initially. However, to ensure that it keeps coming depends on food quality, hygiene and hospitality.

6. Billing and monitoring financial performance

   Running a profitable restaurant business is so much more than just food preparation and marketing. It is so much more about optimizing operations to maximize sales and revenue. Thus, having reliable billing and business management software is crucial. Pick the software that lets you monitor financial performance effortlessly.

A dedicated and careful approach towards documenting a business model is crucial for setting up a successful restaurant business. Additionally, a few right software picks for marketing and business management will keep you on the edge among your competitors.