5 Steps to Conduct Feasibility Study to Start an F&B Business in India

A feasibility study is the best practice to be followed by any new business coming into action. It puts at stake a little amount of your total investment and time but has innumerable benefits. It tests and evaluates factors that can drive your business. Based on a feasibility study, one can take the decision to go about a business idea or not, thereby saving a lot of time and money.

Meanwhile, there are numerous other benefits associated with a feasibility study such as narrowing down the alternatives, saving time, and helping the team to focus more on the key objectives.

Feasibility Study for F&B Business in India

The Indian Food & Beverage (F&B) sector is presently sized USD 15.2 billion, jumping from USD 10.5 billion in 2012. Though the growth of the sector has softened due to the pandemic, the sector continues to expand steadily. The organized F&B sector, which comprises of QSRs, casual dining, fine dining, pubs, cafés, etc. is presently sized at USD 4.6 billion. The segment is growing at a CAGR of 10.5%.

After the setback during 2020 and 21, the F&B industry is once again recovering fast with footfalls close to 80% of the pre-covid levels. Not just in metro cities but also in smaller Tier 2 & 3 cities, the demand for organized food retail is picking up fast.

This is also luring investors and business owners towards the segment. Either through stand-alone units or franchised businesses, new F&B businesses such as restaurants, cafes, fast food centers etc. are coming up fast.

Meanwhile, it is important to understand that F&B in India is a highly competitive business. Apart from organized entities, there is also intensifying competition from non-organized players such as food trucks, food stalls, snacks corner, food joints, etc.

This means even though the per capita consumption of food is increasing, by just starting a business one won’t become successful. One has to verify various factors to ensure a successful future in the segment.

To further ensure the same, one should conduct a feasibility analysis before committing the capital and time. To a good extent, it can render valuable insights.

Mentioned below are the 5 major steps that can help in conducting a feasibility study for a restaurant business in India.

Location Analysis- Location is a crucial aspect of an F&B business, and to find the best place, understanding and knowledge about the location and site construction become crucial. This analysis includes accessibility from the roads, visibility from the highway, future growth potential, availability of water & electricity, volume of passersby, etc.

Market Review- To have the best and most profitable F&b business, one should have good knowledge of the existing market in the area. One should learn about updated market trends, competitors, and future growth potential. Likewise, there should be a detailed study on the demographics, income profile, age group, etc.

Brand Strategy- Branding of a new business is equally important as it speaks about your services a lot. Thus, a well-planned brand strategy is a vital determinant of the rate of investment returns. And to plan a food business’ brand strategy, one has to emphasize strongly on the social and digital media platforms.

Financial Feasibility Analysis- One of the major aspects includes an understanding and analysis of the financial feasibility. Factors like the cost of land or rental , equipment, furnishing, electricity, maintenance and fixtures, insurance, etc., need to be under the consideration. Not to forget soft or non-building costs like staff salaries, advertising, staff training, etc., should also be on the financial plan.

Visitor Statistics- One must go through the statistics of visitors visiting the place based on that you can plan a lot of things about the food business. The frequency of customers visiting during different times of the day (turnaround time), their habits and requirements, etc., are needs to be mapped.

So, now that you know every inch of beginning a F&B business, what is the wait for? Reach us today and avail of our services at the best price and have a successful business!

The India Watch is a market research and business feasibility company with strong understanding of the F&B, tourism, hospitality, retail businesses.

If you are an investor or business looking to enter the segment, drop us a mail at info@theindiawatch.com

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