Skip to content

How to Start a Banquet Hall Business in India

Banquet halls or marriage halls are very popular in India. And starting a banquet hall business is highly lucrative for entrepreneurs who want to start a business in the hospitality industry. This article includes a detailed business plan guide on how to start a banquet hall business with the necessary aspects. It also includes the cost of the business, profit margin calculation, and marketing plan.

Basically, the banquet hall is a large building or room used for feasts. They are specially used for parties, functions, ceremonies, occasions, or celebrations.

Generally, people hire banquet halls for different purposes. The list may include birthdays, weddings, anniversaries, social gatherings, personal events, festivals, and corporate parties.

In the corporate party segment, some of the major functions are meetings, training, product launching, award ceremony, product promotion, trade fairs, etc. So, there are a lot of parties when people search for a local banquet hall depending on their specific requirements.

Initiating a banquet business is cash-intensive. Also, it requires proper planning and expert implementation. You must have sufficient cash in your hand in starting this business.

Suggested Read: Profitable Food Processing Business Ideas

If you have your own land in a good location, you can build a hall of your own. Otherwise, you can start this business by hiring a hall from others. In India, most of the big residential complexes have this type of hall. And often the promoters look for knowledgeable entrepreneurs for having a business tie-up. Definitely, this is also a lucrative opportunity that comes with a low-cost model.

12 Step Guide on Starting a Banquet Hall Business in India

Step 1: Understand the Market Demand & Competition

Generally, the professional banquet halls arrange any type of party as such. However, analyzing the specific demand helps in preparing the marketing plan and promotion. In most cases, people want to hire a nearby banquet facility. So, it matters heavily. If you establish the banquet in a commercial area, then surely, you will get the corporate events more than the social or personal functions.

Also, check who are your competitors in the market. What facilities are they offering? What about their marketing policy? These all will help you in creating a successful business model.

Step 2: How Much Does it Cost to Start a Banquet Hall Business in India

Initiating a banquet hall business requires a lot of capital investment. And you will need to invest most of the funds even before raising a single bill. So, you must have a clear conception of how much it costs. First of all, you need to have a location. Decide whether you want to buy or hire a space. And if you have already a suitable space, then you need to build the construction.

Banquet Hall or Marriage Hall Construction Cost Calculation

Generally, marriage hall construction cost depends on several aspects. it depends on the area of the hall, material cost, labor cost, number of floors, and the quality of the materials you use. Also, it varies depending on the specifications for the type of flooring, frames for doors and windows, wood for doors and windows, material for bathroom and kitchen, finishing on exterior walls, and a lot more.

Secondly, you need to invest in decorating the hall. The most crucial aspect of a banquet hall is the decoration. You will need to make it gorgeous and luxurious. Hence, you need to put money into flooring ceiling, walls, lighting, sound system, furniture, air conditioner, and utensils. Also, you need to invest in kitchen and maintenance tools. So, according to the area, you must have a financial calculation in hand prior to setting up the business.

Step 3: Prepare a Business Plan

Preparing a business plan is a must. Broadly, a banquet hall business plan includes the financial aspect and marketing plan. Calculate the fixed cost and variable cost separately. Also, calculate an expected revenue return and ROI.

You can prepare a construction plan with the help of a civil engineer. Also, they will provide you with a detailed estimate sheet along with the plan. It will help you in getting overall building costs in hand.

If you want to apply for a bank loan, then the bank will ask for the business plan. However, most banks provide finance in the case of the promoter’s own property. And even then you will need to deposit the collateral security depending on the loan amount.

Step 4: Select a Good Location

In the banquet hall business, location matters heavily. You must select a space at a prime location that has a wide entrance. It must be located on the main road or high street. Also, you will need to provide a parking facility for your guests.

If your space is not on the ground floor, then the building must have a lift. The generator facility for the uninterrupted electric supply is a must. Also, you need a sufficient water supply, separate ladies and gents toilet and toilet for your employees. Some of the banquet halls have open-air spaces for large parties.

Step 5: Arrange Finance

If you don’t have your own fund, then the scope of getting a loan is very limited. You can only apply for a loan in the case of having your own property. Sometimes bank also provides loans on furniture, fixture, and equipment. In India, the partnership format is a highly successful way of generating the initial fund in the banquet hall business.

Step 6: Banquet Hall Business Registration & License in India

Opening and running a banquet hall business in India requires a lot of registration and licensing from different Govt authorities. First of all, determine the form of your organization and register it accordingly. Then apply for MSME Udyog Aadhaar registration online. You will need to have the GST number for the tax filing. As you need to hire sufficient manpower for providing the services, you must have the PF and ESI registration for your employees.

In running the banquet hall, you will need to maintain the guidelines of the Food Safety & Standard Authority of India. Depending on your annual turnover you will need to have an FSSAI license also. Additionally, you will need a license from the health authority and a Fire License. Apply for a Public Entertainment License from the local Police Commissioner. And finally, you need a bar license from State Government authorities for serving alcohol within the premises of the banquet hall.

Step 7: Floor Plan

Depending on the facilities you want to provide, you will need to craft a floor plan first. It’s advisable to take the help of an interior designer to get this intricate job done. You will need to have specific spaces for providing a dance floor, DJ area, bar, buffet area, etc.

Generally, most banquet halls arrange the interior according to the specific requirement of the guest. Definitely, a corporate party decoration will not be the same as a wedding ceremony. Hence, you need a large storeroom also to keep the equipment when they are not in use.

Additionally, have proper space for the kitchen, staff room, office, etc. If you can provide separate rooms for staying, then you can earn more profit from the business.

Step 8: Banquet Hall Decoration & Features

First of all, plan about what different features you will provide to your guests. And you will need to decorate the banquet hall in a wonderful way as much as possible. Central air conditioning, free WiFi, a music system, a CCTV camera for safety, and a conference table are a few of the list. Even you will need to be prepared for arranging the theme party according to the client’s preference.

Step 9: Banquet Hall Profit Margin

First of all, we must say the banquet hall is a highly profitable business. However, the business has certain risk factors also. You have to pay staff salary, basic electricity bills, and other utilities even for the days when the hall has no booking.

Generally, the banquet halls earn profit from the food and other value-added services that they arrange for their clients. Some of the majors are providing an anchor, videography, projector, special theme, etc.

In calculating the profit margin, you must find out at least how many bookings you need in a month to get the break-even.

Step 10: Menu & Tariff

You will need to fix the menu and tariff carefully. Keep the menu with the most preferred food items of the local demographic. You must keep a range of North Indian, South Indian, Italian and continental foods on your menu. Mention clearly whether you will allow an external caterer or not.

Generally, banquet halls offer a customized estimate to the clients according to the specific requirements. And for that, you will need to prepare a tariff plan that can be changed accordingly. It’s better to use the right software solution to maintain stock and daily activities.

Step 11: Terms & Conditions with SOP

Whenever you cut a deal, you will need to have a contract paper mentioning all the rules and regulations along with the estimate details. So you need to prepare that prior. Running a banquet hall properly requires the organized efforts of all the employees. Therefore, you must prepare an SOP prior to getting everything done properly.

Step 12: Resources

Employees are the most valuable resources in this type of business. You need trained and skilled employees who can deliver everything even in a critical situation with a smiling face. They must be hardworking and understanding to their guests. it’s always better to engage manpower who have specific educational qualifications in the specific industry. Provide proper training and orientation to your employees from time to time.

In conclusion, we must say running a banquet hall is not everyone’s cup of tea. The business requires strong dedication, skill, knowledge about the hospitality industry, and the risk-taking ability of the entrepreneur.