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The food manufacturing business is a profitable business in India. Since India is an agrarian economy, it is known for manufacturing varieties of organic food products. India generates most of its revenue from food production and agriculture. The demand, possibilities of diversification and expansion are tremendous for a food manufacturing business. It has emerged as one of the leading industries in India.
The food processing business means various techniques and operations through which the raw food materials are transformed into food items for storage, cooking and consumption. It includes many processes right from the basic preparation of the raw food to converting it to fit for consumption.
There are many kinds of food manufacturing businesses that you can start. Some of the major food manufacturing businesses are listed below:
When you have decided to start a food manufacturing business, you require the following seven things to run your business:
The first thing required to establish a food manufacturing business in India is to decide and set up a business structure. It may be a One Person Company (OPC), partnership firm, Limited Liability Partnership (LLP) or private limited company. You should decide the business structure for your food manufacturing business based on its scale and management type.
After deciding on the structure of your manufacturing business, you need to mandatorily obtain the company or firm registration for your food manufacturing business from the Registrar of Companies or Registrar of Firms, respectively. The company registration or firm registration will help you get funds and run your business legally.
Before starting a food manufacturing business, you need to research and understand the market to choose the right product to manufacture. You should research the economic and industrial outcomes of the current units of food processing. While selecting the food product, you should keep in mind the availability or viability of the product in the market as it helps you to determine your competitors, current trends and market size.
Every business needs proper capital and funding for establishing and running its operations. There are many ways to obtain funds for your business. You can go for crowdfunding or get a business loan from banks when you don’t have enough capital for your business. You can even raise money from your family and friends.
You can approach venture capitalists or angel investors who can contribute to your food business’s funding. You can also apply for funds from government schemes that provide assistance to agro-industries, such as Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) scheme, Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), etc.
You must decide on the location of the manufacturing unit. Selecting a location away from the city is recommended as manufacturing units require vast areas. But, ensure that the location is close to the resources so as to reduce logistics costs. The location should be easily accessible to resources like workforce, transportation facilities, raw materials, electricity sources, etc. It should also be close to the location where you will be selling your products.
It is mandatory for people involved in food businesses to obtain an FSSAI registration or license. As per the Food Safety and Standards Act, 2006 (FSS Act), all food manufacturing business owners in India must obtain an FSSAI registration/license. There are three types of FSSAI registration. The kind of registration you need to apply for depends on your food manufacturing business’s annual size and turnover.
You need to apply for an FSSAI Basic Registration when your business has an annual turnover of below Rs.12 lakh. You should apply for a State FSSAI License when your annual turnover is above Rs.12 lakh but below Rs.20 crore. When your annual turnover is above Rs.20 crore, you should obtain a Central FSSAI License.
You need to obtain certain other mandatory licesnes/registrations for your food manufacturing business before starting its operations. You need to obtain a fire department NOC for your business. You need to get a water testing certificate from a certified agency as water is an essential ingredient for preparing food items.
Shop and Establishment Act Registration is required since all shops and commercial establishments need to obtain this registration. You need to obtain a pollution clearance from the respective State Pollution Control Board (SPCB) since the food manufacturing industry is considered as a polluting industry as per the CPCB and SPCB.
If you plan to export your food items, you need to obtain an Import Export Code (IEC). You will also require a GST registration. When you sell your food products or items for consumption or storage under a brand, you can get a trademark registration to protect your branded products from competitors.
Lastly, after obtaining all the required licenses/registrations, deciding on the location and arranging funds, you need to obtain the equipment and hire staff to run your food processing business. Since food manufacturing involves processing raw materials to food items for sale or consumption, you will require a variety of equipment and machinery for processing the food.
The equipment and machinery vary according to the food item to be manufactured. However, most food manufacturing businesses generally require food cleaning, grading, peeling, blending and sorting equipment. Additionally, machinery is required to pack and label food items manufactured and processed for sale or consumption.
You would require a good workforce to run your business. You must hire people for various designations, including factory workers, cooks, marketing, sales managers, cleaners, and HR managers.
After establishing your food processing unit, ensure that you are marketing it adequately. A good marketing strategy will help to grow your business. Build a website of your business containing all the key information so that consumers and suppliers know about your manufacturing unit. You can post your food products on social media channels such as Instagram and Facebook to gain more customers or suppliers.
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