How to Start Your Food Business: A Step-by-Step Guide

In the tough times of lockdown during the COVID-19 pandemic, one industry that has surprisingly done well is the food industry. The existing players, as well as new-age entrepreneurs, amateurs, home chefs, and even those who were served the pink slip, have embraced the food business. Their success has encouraged many young adults to follow their passion and start up on their own.

If you are serious about making a mark in the food industry, go for it! But do bear in mind, it is important to look into several aspects before starting afresh. A few of them are listed below.

Identify Your Niche or Passion

The first and the foremost step in starting your own food business is to know yourself – are you passionate about eating and serving others? If yes, what kind of cuisine would you choose to specialize in, viz., Indian cuisine, international cuisine, fast food, desserts, organic, vegan, etc. You should also decide whether you wish to establish a food chain or open a few outlets serving exclusive food items, and answer many other similar questions. Answering these questions on paper would go a long way in bringing clarity on what you wish to do.

Market Study

Having identified your area of interest, you must do solid market research on various aspects. For example, understanding the likes and dislikes of your target customers is important. Likewise, if you choose to open a restaurant, research on the location is very crucial to attract footfalls. Identifying your potential competitors and understanding their business models boosts your chances of survival in the initial phases of your business. You must also do market research about the available sources of financing and check your business loan eligibility.

Thorough market research will help you to channelize your food business in the right direction.

Laying the Foundation

Now, it’s time to begin talks for choosing the right location – identification of land or shops, negotiating the terms of purchase or lease, documentation, interior design, décor, etc.

In the food business, the ‘people’ play a very important role – be it the chefs who cook with passion, the servers who are the face of your business, or the cleaning staff who maintain hygiene. Choosing the right person for the right job can take time, but this process must be done with utmost care. Once chosen, the staff’s training must be directed to suit your needs.

Choosing the right suppliers is also crucial for the smooth flow of the entire supply chain. Your ability to serve your customers is largely dependent on the timely availability of quality raw materials at a bargained cost. Additionally, operating in the food industry may require FSSAI and other licenses. It is advisable to put in place all regulatory requirements before starting your business and seek help from experts in the matter.

Market Reach

Last but not least, you must think of ways to reach your potential customers and attract them to your food joint. Market visibility through social media has a very strong impact, and if done properly, it can attract a large flow of customers in the initial phases of launch. Thereafter, of course, you can retain your customers and attract new ones on the strength of your product and continued marketing.


If you are passionate about starting your own food business, choose the right sources of funding, to begin with. Negotiate well with your financier for business loans at attractive terms like low-interest rates, collateral-free, high eligibility, etc. Some financiers offer customized financial products and hassle-free business loan processing; this could be an added advantage.

To help you start, our business loan EMI calculator is there to calculate your EMIs as well.