5 Common Challenges faced by Indian Restaurateurs and Smart Ways to Overcome Them

The restaurant Industry in India has come a long way since the “military-style cafeteria” outlets of the early 90s.

Thanks, to rapid urbanization and the increase in the number of families and people who dine out, restaurants are booming in every corner of India- be it in urban pockets or rural outposts.

This lures more and more young and dynamic entrepreneurs to try their hands in the business. That said, with the daunting policies, taxes, bureaucratic hurdles, high initial costs, operational difficulties and a whole range of unique challenges, it takes more than hard work to make your restaurant a success.

In this article, let’s take a look at the various issues plaguing the Indian Restaurant businesses and some smart ways to overcome them.

Ways To Overcome Challenges Faced By Indian Restaurateurs

1 A Unique Selling Point

Are you running a café or a fine-dining restaurant? Are you aiming to provide a romantic experience, perfect for date-nights or a low-key vibe that appeals to families?

You may have an excellent menu, skilled staff and a talented chef on board. But that alone isn’t enough. You need to provide your customers with a novel experience to hook them in.

You need to define your unique selling point — the one factor that separates your restaurant from others. Know what your brand stands for. Is it something relatable or something aspirational?

Spin your brand story accordingly. Ensure the story reflects in your brand communication and overall product offering.

Building Customer Loyalty

For any business to have a successful run, you need to create the right customer experience to build customer loyalty. This is very true for restaurant business as well.

Poor customer service is often a deal breaker. You may have an impeccable ambience, the best food on the table, but if your customers aren’t served properly, you can be sure that they’ll never return.

Start by focusing on the simple things. Train your staff and teach them to serve customers with a smile, always. Every time a customer contacts any one of your staff members — be it the waiters, busboys, cashiers, etc. the experience must be pleasing, accommodating and welcoming.

Apart from human contact, you also need to detail the various online customer experience touchpoints, like placing the order online, calling at customer care, reading the menu online, etc. Make sure these experiences are also positively consistent with what your brand stands for.

Next, try to provide customers with an incentive to stay loyal to your brand. Something like earning loyalty points with every bill or a free tenth cup of coffee goes a long way in promoting customer loyalty.

Operational Costs

Unlike other businesses, where you need not stock inventory every single day, restaurants need adequate cash flow to manage daily operational costs — including food and labour. Initially, it may be challenging to generate cash flow to meet your expenditures.

Here is how you can manage the operational costs of your business:

  • Set weekly and monthly sales targets
  • Train and educate your staff to treat and handle customers in a professional and welcoming manner
  • Monitor the quality of food items on a regular basis
  • Ask for feedback from your customers as it will guide you on metrics that you can work on.
  • Look for areas where there is room for miniature profits without compromising on the quality of your food and service

Instead, of running on a partial overhead and failing to meet expectations, get a specialized business loan to meet your specific needs. Indifi offers a wide array of loans for entrepreneurs in the hospitality industry — line of credit, invoice discounting, and merchant cash advance are a few handy ways to meet your restaurant’s day-to-day running expenses.

Managing the restaurant

Managing a restaurant is a knackering and draggy task. As it involves regular analysis of your business, meeting the demands of your customers and above all making the restaurant operation profitable

So how to make your restaurant business profitable? How do you measure the performance of your restaurant? Here are some helpful tips which will help you in achieving your restaurateur goals:

Maintain a record

It’s a good practice to maintain a record of restaurant activities as it helps in measuring the performance, minimizing operational costs and ensuring the successful operation of your restaurant. Please maintain and record the following points:

  • The cost required to prepare every food item, and its profit margin
  • Staff costs
  • The time required to prepare every meal (Important as serving customers on time will improve the health of your business)
  • Daily sales
  • Weekly profits and losses incurred
  • The margin between sales and staff plus food preparation Costs

Policy Bottlenecks

This is one of the pet peeves of all restaurateurs. Starting a restaurant business is not as simple as it may look. Before you can set up shop, you have to deal with several policies and other bureaucratic principles.

For instance, some states in India don’t allow you to sell liquor, whereas, in others, you need to have an FSSAI license before you can set up your kitchen.

Look up all the policies of your specific state or city, or hire a consultant to help you deal with the red tape. Spending time on getting the right certifications will help you avoid problems faced by restaurants down the line.

Also Read: Getting Business Loans For Restaurants

Initial and Working Capital

This is one area where even experienced restaurant entrepreneurs run into significant problems — capital or rather the lack of it. Restaurant owners require sufficient capital during the initial phases as well as to deal with daily expenditures.

Very often, experts recommend that restaurateurs should have enough money to cover one year’s expenses before the business turns profitable. Additionally, they should have sufficient resources to meet unexpected costs and expenditures.

It may not be possible to pay for all these expenses out of your pocket. Instead of draining your life’s savings, be smart and take a business term loan from digital lenders like Indifi and focus on expanding your business.

Inventory Management and Menu Pricing

Inventory management is important when it comes to operating a restaurant. It makes the ordering process easier and efficient and helps reduce food waste.

Coming to the menu, the menu is more than a piece of information in a restaurant. And as a restaurateur, it is important for you to set profitable pricing margins and increasing it gradually with time.

Recruiting and Training Staff

Human resources are the greatest foundation of the successful and healthy operation of a business. The same ideology stays true for the restaurant industry.

Hiring the right people can drastically improve the performance of your business and makes your restaurant a success!
Having great staff will enhance your customer experience, make the restaurant environment welcoming and make your business do exceptionally well. Below are some tips regarding hiring and training your staff.

Take it to the Next Level

The restaurant business looks very exciting. But there are multiple aspects that need to be taken care of it to get the right business mix. These five hurdles are the most common ones faced by restaurateurs in India. Take care of it to boost your revenue and gain a foothold in the industry.

By indifi

3 thoughts on “5 Common Challenges Faced By Indian Restaurateurs And Smart Ways To Overcome Them”
  1. Hi,i great tips for restaurant business and it is helpful for a restaurant to grow and I think those tips would help

  2. I hope you will share such type of impressive contents again with us so that we can utilize it and get more advantage

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