Chaatup is now 15 months old, so here are a few pointers I've learnt on how to budget for your retail food outlet, and more importantly, whether to start one at all. (I'm guessing you have the food down pat: a full menu that has been tried on friends and family and neighbours for opinion, and the pricing has been worked out to a T. If not, I plan to make a post about pricing soon.)
- Figure out the initial expenses for acquiring the place, deposits, equipment, renovation, and raw material purchases. Double this amount and that's going to be likely closer to actuals.
- Calculate your salaries, rentals, and utilities per month and multiply it by 28 to run the business for at least 2 years factoring in a 5-15% inflation rate depending on where you live.
- Add the numbers from pt 1 and pt 2 and start your business only if you have this much money to begin with. This might seem hard to digest and your enthusiasm to serve amazing food might take over and tell you this is BS and that you're bound to succeed, but remember that overnight success never happens and you need this money to run the restaurant for two years while the public at large comes to know of it, tries it, and become regulars while bringing in friends and family and other word-of-mouth business growth.
This initial capital will free you from worrying about recurring expenses and will let you focus on the food and hospitality instead of giving you sleepless nights about where the salary or rent money is going to come from next week. Because you definitely aren't going to earn it the first few months at least, no matter how great your food is.
Remember where we doubled the initial capital requirement? Spend 30% of the total of pt 1 in advertising and brand promotions continuously for the first 6 months. For us in India, we found geographically targetted Facebook and Instagram ads gave us the highest number of walkins followed by advertisements in the local language daily newspaper on a consistent (at least weekly) basis. If you're listing on an online food aggregator/delivery service, then the best results to increase such delivery orders is through advertisements and promos on their respective platforms. Discounts aren't that important as long as your restaurant/outlet shows up first in the list and has great pictures of your food and short and descriptive text accompanying the dishes.
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