12 Commandments for Running a Profitable F&B Business

It is often said that the food services industry can weather any financial downturn or turmoil. From time to time, individual entities may decide to take a bow and shut shop. Fortunately, new F&B businesses with an appetite for growth are always waiting in the wings to fill that vacuum.

The food & beverage industry presents immense potential for generating a neat profit. Attracting and retaining customers is not enough. As a food entrepreneur, you need to answer basic questions like, am I making a profit, is my venture sustainable, is it scalable?

In this post, we are going to outline aspects that you need to get right, in order to run a profitable F&B business.

As an entrepreneur, you want to lay a strong foundation and build a viable F&B business, via extensive research. Yes, that’s right. Research!

Listed below are 12 Commandments that you need to pay attention to, for your F&B business.

  • Understand your own mindset: Every individual is different. Every entrepreneur is different. However, as an entrepreneur, you must possess certain qualities like vision, confidence, managerial acumen, interpersonal skills, problem-solving skills and a goal-setting attitude. Think about your own work experience and exposure, be clear about the metrics you want to track in your business. Will it be your operating margin, your bottom line profitability, your daily or weekly P&L, the cost per meal, etc. Ultimately, the most essential quality you need to succeed is raw, unadulterated passion!
  • Identify your customer: Who or what is your target audience (TG)? Are they children, teenagers, young professionals, homemakers, senior citizens, or all of the above? Every age group and customer type has unique needs and wants. Smart business owners are quick to realize that they serve more than one TG. For example, a café may serve working professionals as their primary TG and teenagers as their secondary TG. Ask yourself, is my F&B outlet geared to serve more than one target audience, what do I need to focus on for each audience?
  • Identify the needs of your customer: What do your customers really want, what makes them go back to an outlet, what are the things they appreciate, what do they usually criticize? Conduct a survey in the local area you have identified for your establishment. A positive spin-off is that local citizens will become aware that a new eatery is coming around. They will appreciate the fact that you care about them. Personal touch is always a plus point in hospitality.
  • Choose the right location: The location you choose matters tremendously. Some people dislike places that do not offer parking space or places that are not easily accessible for senior citizen or physically disabled guests. Think about our primary and secondary TG and choose an appropriate location. If you are paying a premium for a good location, is that premium really worth it? Is there room for negotiation? If your location is not easily accessible or visible, what will you do to attract people’s attention?
  • Identify your USP: Keeping in mind the current trends in the gastronomic world and the likes of your customers, focus on the USP of your F&B business. What is the one thing that no other provider is offering, can you deliver a specific service or item better than anyone else, do you have a beverage or dish that you want to promote specifically? Your USP should be compelling enough to make place for your business in the market.
  • Work on ‘Your Brand’: The name and logo of your F&B outlet are core elements of your brand. Think about your service elements and how you want to leverage your brand online and offline. The ambience of your outlet should resonate with the name/logo and vice versa. Loyalty and novelty are created because of the brand. In order to create space in the market, you need a rock-solid brand. Promoting your business by providing good food and a superior customer experience goes without saying. To take it a notch higher, you need strong branding.
  • Your Packaging: Do you plan to offer take-away, what about home delivery? Think about the packaging based on the food you are planning to serve. What branding elements do you want to use for the packaging? Some providers choose to use branding for all items, be they carry bags, boxes, plastic or wooden cutlery.
  • Your Kitchen Set-Up: Depending on the cuisine you are going to serve your patrons, you need a kitchen that enables to you to serve quickly, efficiently and hygienically. For example, a kitchen that serves soups and salads will need a different set up as compared to a kitchen that serves tandoori delicacies.
  • Ergonomics and Dimensions: Pay detailed attention to floor planning, fixed and/or flexible seating arrangements, tables, booths, wheelchair dimensions, etc. Pay equal attention to the dimensions of your kitchen work stations.
  • Manpower and Work Schedule: How many people will you need in the kitchen and on the floor? Will you take reservations? Will you be open all days of the week? Will you serve 24/7? Will you close in the afternoon? The answers to these questions will let you determine the ideal manpower strength and the overall work schedule.
  • Understanding Operations – People, Equipment and Products (PEP): You will need to work with different suppliers. Your interactions will not be restricted to internal staff. Think about fresh produce, packaged goods, the machinery and appliances you need to run your business smoothly. This is called Understanding Operations – People, Equipment and Products (PEP).
  • Financial Management (Profit and Loss): One of the most essential pointers is indeed financial management. You may do this yourself or hire an accountant to do so. You must take in to consideration the overall profit and loss and also the money that you put from time to time, into your business. Keep a record of every minute loss, expense and profit.

If you follow these 12 Commandmentsyou will be better equipped to run a profitable F&B business.

Serve good food, experiment, ask your patrons for suggestions and add an affectionate touch. There is always something new in the gastronomic arena. Keep learning, keep cooking, and bring the world together through food. Bon Appétit!


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Post contributed by Vinny Ahluwalia and Amit Ahuja.

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