How to start a small restaurant in India. How much money is required to open a restaurant?

Starting a small restaurant in India is very good idea.Indian are fond of eating variety of foods. For starting a restaurant you can look for three options

a. Small roadside dhaba (Investment approx. INR 3.00 lacs )

b. Small city food joint (Investment approx 3.50 lacs)

c. Branded restaurant (Investment around INR 6 to 7 lacs)

One of my relative,who has opened the restaurant recently in tier II town. In two month period his operations reached to breakeven.

Cost of establishing restaurant depend upon following factors (here I take assumptions for tier-II city normal 500 sft. restaurant with two month reserve )

Location-cost of shop/place -INR 0.80 lacs p.m.

Furniture/Interior-INR 1.20 lacs

Dinning facilities -INR 0.70 lacs

Working capital -INR 1.00 lacs

Paper work/publicity etc.-INR 0.40 lacs

If door to door delivery then logistic -INR 0.50 lacs

Two months reserve-INR 2.00 lacs

Miscellaneous INR 0.50 lacs

Around 6.60 lacs for good restaurant. 

If you are first generation entrepreneur,go for small level which will cost you around INR 3 lacs.

Rent or Buy As I can see you don't have any prior experience, I strongly suggest you to rent out a property instead of buying. If you have confidence about yourself and your capabilities, go for an extended lease of 5-7 years, so, that even when your restaurant starts working well, you don't need to worry about LandLord bothering you :)

Chef/Cook Generally we focus more on locations, interior, & menu over Chef, which is actually not a wise decision. I suggest you to hire the best chef who can actually make you feel assured about quality of food you would be serving. He is backbone of your restaurant. Make sure, he is best paid too. Also, hire some skilled waiters who know how to sell cola with pizza.

Sourcing/Purchasing At the end of the day, it is all about profits. Profits comes from revenue as well as keeping your expenditure on lower side. It looks so obvious and sometimes we ignore this fact, but in restaurant, having best vegetables and groceries at best prices can not only add to taste but will also help in keeping your margins high.

Location You may raise your eyebrows when I kept Location on 4th place. Just remember you are not starting a tiffin business. When someone along with friends, or family drive out, they want best food. They are ready to drive for miles if at return, they can say "food was awesome!". Try to recall your Fav restaurants and think would it matter to you if they change the Location. Location can get you a ready-made platform or some floating business like a restaurant near to college or school but it's your restaurant's taste which will keep them stick to you.

Kitchen It is as important as the dining area of restaurant. Give best equipment to your Chef which can reduce the delivery time. If budget is a constraint, you can buy second hand catering/restaurant equipment. If you were never involved in restaurant business, welcome to this new world, my friend. It will definitely hit your budget and it should! Also, keep it clean. If your kitchen is clean, your dining area will be in its best!

Interior/Theme Whether you have a small budget or big, you can always place things nicely. It's strange but all colors cost same, so use them wisely. Use wall papers, artifacts or any theme built ambiance which if not end up giving WOW factor can atleast not gain negative attention.

Menu Instead of adding every single dish you remember or available in surrounded cafes, try to be restrictive, initially. Consult your chef, taste the dishes, and then get it printed on Menu. Remember, Most of the people order from 30% of Menu, always. So, think before adding some "Lebanese Platter" which will be ordered only once out of 10 times but you have to keep stock on daily basis. And food has a small life. Best served fresh :)

Inauguration The only big marketing activity you should do in initial stage. Later, it also depends on your chef's shoulders. Spread the word! I remember a new startup restaurant in my city did free golgappa (kind of snacks) competition on inauguration. Participation was free! It costed him just few grands and he was able to get all the eyeballs and media on him. Woohoo, he was hit before he started!

Customer Feedback Take it seriously. Talk to them when they leave. Give cookies/candies to kids accompanied by them. If someone planning a party, make him visit your super clean Kitchen. Surprise them, make them feel special. If food is delayed, give them complimentary starters. Free things always work!

I must have missed few points, must have done some typos or grammar disasters, but I hope I have made my point clear. I would say, Just don't think and go for it! Best Wishes!