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How to start a food business

Here is all you need to know before you start a food business

by Anindya on 1/12/2017

Starting a food business selling on amazon

If you are passionate about food and seek new sources of earnings, starting a food business is a great idea. It is a very challenging mission, while vision and ambitions are important, turning that ambition into success requires research, planning, business acumen, investments, and perseverance.

Whether you want to go in for producing and retailing of packaged food products or start a restaurant business, there are a lot of rules and regulations to follow as you will be dealing in a product/service that has the potential to harm human health if compliance is lax and guidelines are not followed to the T.

Research is essential

Whether it is a packaged food retail or a restaurant, it is important that you do proper research on your product market before you start. Attend trade and business networking events. Try to find out what works, what doesn't, and what would other businessmen do differently. Online community forums are a great way of gauging market needs and customer preferences about food service businesses. Your research will help you to define your target market and identify risk factors, so that you can build a strong business plan and take it forward.

A unique thing about the food business is that it is not a single activity and includes several other types of businesses. For instance, manufacturing food products and selling pre-cooked food products is covered under food business. Your business will also include warehousing, retailing, distributing, and transporting food products. On the other hand, a restaurant also comes under the category of a food business.

The different types of food businesses:

Food businesses come in several forms, If your business comes under any of the following categories, then your business is a food business

Eating Joint
Bakery
Café
Food Truck
Sweet Shop
Grocery Store
Food Warehouse
Homemade pickle or jam

Licenses and Registrations required for a Food Business

Food and Food Products have the potential to harm the health of consumers, therefore, a food business needs to adhere to a number of licenses and permits. If you are running a food business, you will be known as a FBO (Food Business Operator). Depending on the type of business, every FBO will need one or more from the following permits and licenses.

FSSAI/Food License

Most importantly, an FBO needs to obtain an FSSAI (Food Safety and Standards Authority of India) license to ensure highest standards of consumer safety. An FSSAI license is of three types.

Other licenses and permits required include:

Health Trade License
All eating establishments, including bakeries need to obtain a health trade license. You can apply at the local municipal office. Moreover, in most places, you can also make online applications.

Shops and Establishments Registration
As an FBO, you also need to register under the Shops and Establishment Act of your State. You can do this by filling a simple form and providing relevant details about your business.

GST, Service Tax Registration, Liquor/Bar license and Fire Department NOC

Since food businesses deal in sale of goods, registration under VAT is compulsory. However, registration becomes compulsory only when the turnover crosses a specific limit. If you have a service business, such as a restaurant or a catering business, you need Service Tax registration. Restaurant and catering businesses provide services as well as sell goods. Therefore, they need to obtain both Service Tax as well as VAT registration.

With the GST regime in place, the hospitality industry seems to have made the best of the new tax laws. The impact of GST on the restaurant business is likely to be highly lucrative for both owners as well as consumers.

If your restaurant serves liquor/alcohol, you need a Bar License. You have to submit all the documents listed in the Government checklist. You will also need to get an NOC from the Chief Fire Officer. If your building is notified under the Fire Services Act, you also need to fill out a questionnaire.

That sums up most of the requirements of starting a food business. As and when you start your food business, you might also think of selling your products online. If you do so, Amazon, one of the most popular e-commerce platforms in the world, provides you access to millions of customers through its Grocery and Gourmet Food store. To sell on Amazon, please register yourself as Seller on Amazon.

Learn more about how to sell groceries online

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