How to Start a Restaurant Business in Pakistan: A Complete Guide

The idea of opening a restaurant business in Pakistan is very profitable due to the great opportunities available. Pakistan’s food market is still growing and according to the estimation, the food market revenue of Pakistan will be USD 103.00 billion in the year 2024.

Statista found out that the growth rate of the market is at 7.50% (CAGR 2024-2029) showing that there is a gradual appreciation in the consumption of dining and food services.

This growth is great news for anyone wishing to open a restaurant because the field is growing rapidly.

Nevertheless, obtaining a positive experience in the restaurant business is possible through certain planning, a solid business model, and a comprehensive analysis of the potentials and threats needed to set up a business.

This step-by-step Ways Tax guide will help you understand how to start a restaurant business in Pakistan and become profitable.

How to Start a Restaurant Business in 13 Steps

Without successful planning, wise decisions, and the provision of restaurant business legalities, it is extremely challenging to open a restaurant in Pakistan successfully.

Below is a comprehensive guide covering all 12 steps

Step 1: Decide the Concept of Your Restaurant

The most basic and underlying aspect of your restaurant is your concept, which affects all areas of your business from food and drink selection to the atmosphere of your restaurant.

1. Define Your Cuisine:

Will your restaurant offer Pakistani BBQ, Chinese Wok, Italian cuisine or a combination of cuisines?
Choose a niche, like the type of cuisine to offer such as deserts, barbeques, or vegetarian meals.

2. Choose a Service Style:

Casual Dining: Suits families because it is comfortable.
Fast Food: These strategies include an emphasis on quick service delivery and low prices.
Fine Dining: Luxury restaurants that offer quality foods as well as a quality environment.

3. Identify Your Target Audience:

Urban professionals, families, tourists, or students?
Research their preferences and budget.

4. Theme and Ambiance:

Decide on which theme you would like to set the dinner table depending on whether you would like to make a cultural design or a modern look.

Step 2: Get Investment to Fund Your Restaurant Business

An idea will not become real without funding, therefore it is an important factor to consider when bringing an idea into existence.

1. Self Funding:

Spend your savings on small-scale restaurants.

2. Loans:

Approach banks to borrow business loans.
Prepare a clear business proposal paper in order to obtain investment.

3. Partnerships:

Collaborate with investors or co-founders to share capital and risks.

4. Grants:

Consider possibilities to attract government grants for small businesses in the sphere of hospitality.

Step 3: Evaluate All Restaurant Costs Involved

Control is crucial and it’s a key factor that is why the costs should be estimated well in advance.

1. Fixed Costs:

Property rent or purchase.
Equipment and utensils, furniture, and interior.

2. Variable Costs:

Wages, light and water, and stock.
Marketing expenses.

3. Hidden Costs:

Immediate repairs and maintenance, emergency and incidental expenses.

Create a financial model to project your monthly and yearly expenses.

The estimated cost to open a restaurant in Pakistan ranges from PKR 1,800,000 to PKR 3,000,000, depending on factors like location and the scale of the business.

Step 4: Decide the Location for Your Restaurant

The location is the most important factor that determines the success of your restaurant business.

1. Factors to Consider:

Visibility and accessibility.
Being close to your target market.
Parking availability.

2. Options for Location:

High traffic areas within city regions.
Specialty Cuisine sites for tourists.
Siting for a residential location for families with Kids seeking for restaurant services.

3. Lease or Purchase:

New entrepreneurs benefit from leasing.
Long term benefits result from purchasing but it involves massive capital investment.

Step 5: Get All Licenses Required to Start a Restaurant Business

Regulatory Authorities Restaurant owners must obtain licenses from key organizations:

Intellectual Property Organization of Pakistan (IPO)
Food Safety Authority (FSA)

Licensing Duration and Renewal Restaurant licenses are valid for one year and require renewal with applicable fees.

Operating without proper licenses can lead to legal troubles and fines. The following are the important licenses required to operate a restaurant business.

1. Food Safety License:

Borrow from the provincial Food authority to ensure that all aspects of hygiene were meet appropriately.

2. Trade License:

This has to be done at your local municipal office.

3. Environmental Clearance:

Observe proper drainage, hygiene, and waste disposal methods and; respect the environmental standards.

4. Tax Registration:

Get NTN from the FBR and GST from the FBR as well.

All documents that may be necessary such as the CNIC, rent agreement, and business plan should be developed.

Essential Requirements Restaurant owners must maintain:

Valid health certificates
Medical certifications for all staff members
Proper hygiene standards
Suitable dining environment
Appropriate infrastructure
Current business registration and licensing

Ways Tax can simplify this process by handling the paperwork and legalities for you.

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Step 6: Register Your Restaurant in Pakistan

Every restaurant must obtain registration and license before it begins to operate. Here is a brief description of this process together with the papers needed for compliance.

Registration Process

1. Apply for Registration

It is mandatory for every restaurant or hotel owner to apply for registration before starting a business.
Operating without registration or licensing is prohibited.

2. Simultaneous Registration and Licensing

Registration and licensing procedures are as often combined, that is, they happen at the same time.
The license is valid for one year and has to be renewed from year to year on payment of a fee set by the government.

Documents Required for Registering a Restaurant Business in Pakistan

To obtain a restaurant license, the following documents are required:

1. Application Form (Form-G)

Properly filled, typed, signed, and stamped.
Available for download from relevant municipal or government websites.

2. Ownership or Lease Agreement

A notarized copy of the commercial lease or rent agreement.

3. CNICs

Copies of CNICs for the director, owner, and partners.

4. Employee Records

A detailed list of employees with:

Copies of their CNICs.
Diplomas or certificates.
Medical fitness certificates on Form-I, issued and stamped by a registered physician.

5. Menu Card or Price List

A copy of the restaurant’s menu or price list.

6. Restaurant Building Plan

Approval of the structural safety of the building.

7. Food Authority Certificate

Proof of compliance with food safety regulations.

8. Fire Safety Certificate

The most recent firefighting certificate was issued by Civil Defense.

Compliance and Penalties

Operating without proper registration or licensing can result in:

Monetary fines ranging from PKR 10,000 to PKR 500,000
Potential imprisonment from 3 days to 1 year

These regulations aim to ensure food safety, maintain quality standards, and protect consumer interests across Pakistan’s food service industry.

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Restaurant Business Registration by Waystax

Step 7: Get Manpower for Your Restaurant Business

Everyone knows that your team is the pillar of your restaurant business.

1. Staffing Needs:

Kitchen Staff: The bakers, cooks, and dishwashers.
Service Staff: Waiters, cashiers, and managers.

2. Hiring Process:

Advertise on job boards and social media.
Conduct interviews to evaluate skills and experience.

3. Training Programs:

Ensure that all the staff is taken through courses on customer relations, handling food, and hygiene.

Step 8: Design a Stellar Menu

Your menu should reflect the concept you are trying to convey and be appropriate to your target clients.

1. Menu Design Tips:

Make sure to have a great variety of meals that are common, at the same time as have meals that are innovative.
It’s important to incorporate specials and signature dishes.

2. Pricing Strategy:

Research competitors’ prices.
Maintain profitability without under or overcharging a customer..

3. Seasonal Menus:

Revise your menu with the food that is in season, this will help enhance the freshness of the foods, and to avoid a repetitional menu, which can bore customers.

Step 9: Arrange Vendors & Suppliers for Your Restaurant

Companies with reliable suppliers are assured of an unintermitted flow of the material and/or resources they require.

1. Types of Suppliers:

Food Suppliers: Raw vegetable products, meats, and seafood.
Beverage Suppliers: Soft drinks, coffee, and tea.

2. Evaluate Vendors:

Compare prices and quality.
Keep the right schedule and maintain quality.

3. Build Relationships:

Establish long-term contracts for better deals.

Step 10: Use the Right Technology at Your Restaurant

Automation makes working and serving clients more efficient all the time.

1. Point of Sale (POS) Systems:

Manage billing, inventory, and sales data.

2. Reservation Software:

Allow customers to book tables online.

3. Customer Feedback Tools:

Use digital surveys to gather insights and improve services.

Step 11: Register Your Restaurant

Registering your business makes you legal.

1. Business Name Registration:

Choose a unique name and register it with the SECP.

2. NTN and GST Registration:

Obtain tax numbers from the FBR.

3. Provincial and Municipal Registrations:

Apply for trade and food licenses.

At Ways Tax, we specialize in registering your business on your behalf so you can focus on your core business activities.

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Step 12: Promote Your Restaurant

Marketing is the process of attracting customers to your business and encouraging them to make purchases while also creating awareness of your company’s existence.

1. Digital Marketing:

Create social media profiles.
Paid Advertisement on Facebook, Instagram, and Google advertisements.

2. Collaborations:

Working with celebrities and food bloggers.

3. Launch Events:

Open with a big sale and with special offers.

Step 13: Monitor Operations and Profitability

The successful running of the restaurant depends on frequent assessment.

1. Track KPIs:

Watch overall sales, customer frequency, and rate of their satisfaction.

2. Optimize Operations:

The algorithm adds value by cutting waste and increasing efficiency.

3. Analyze Financials:

Always look at the balance sheets of profit and loss.

By following these steps religiously, one will be ready to begin a restaurant business in Pakistan as the basis for the business’s success is laid down.

Strategies and tactics must be properly defined and implemented and always have to be a work in progress for an enterprise to survive in this competitive industry.

Types Of Restaurants in Pakistan

Common types of restaurants in Pakistan include:

Fast Food Restaurants: Quick meals at affordable prices.
Casual Dining: Family-friendly options with diverse menus.
Fine Dining: High-end services focusing on luxury and sophistication.
Cafés: Coffee, tea, and light meals with a relaxed ambiance.
Specialty Cuisine Restaurants: Focus on regional or international cuisines like Chinese, Italian, or BBQ.

Why Start a Restaurant Business in Pakistan?

The restaurant industry offers unique opportunities for entrepreneurs:

Booming Demand: Stereo-typically, people in urban areas have changed their tastes as well and people’s lifestyles have changed and this they portrayed by dining out.
High Returns: There seems to be a revelation of the fact that restaurants are among the most profitable businesses given proper strategy and operation.
Creative Freedom: They say restaurants are a great place to experiment both in terms of culinary skills and ways of perceiving art.
Long-Term Growth: One thing that has remained solid and ensures that new business ventures in the food industry can work efficiently is the steady growth in Pakistan.

How Much Investment Is Needed to Start a Restaurant in Pakistan?

There are often different demands for investing during the creation of restaurants depending on, among other things, size, location, and kind.

In general, to establish a small to medium restaurant in Pakistan, one needs an investment of 6 million PKR to 30 million PKR.

Some factors influencing the investment are:

Location: A high level area attracts higher rates.
Restaurant Type: Themed or fine dining restaurants need higher capital.
Size: More capital is required for infrastructure, human resources and other requirements in larger spaces.

What Is the Cost of Opening a Restaurant in Pakistan?

Let’s break down the typical costs involved in opening a restaurant:

1. Property Rent:

Small locations: PKR 50,000 to PKR 150,000/month.
Prime locations: PKR 300,000 to PKR 500,000/month.

2. Interior and Ambiance:

Design, décor, and furniture: PKR 1 million to PKR 5 million.

3. Kitchen Setup:

Equipment like ovens, refrigerators, and stoves: PKR 1 million to PKR 3 million.

4. Licenses and Registrations:

Trade and food licenses: PKR 100,000 to PKR 300,000.

5. Staff Salaries:

Depending on the size, monthly salaries may range from PKR 200,000 to PKR 500,000.

6. Marketing and Advertising:

PKR 100,000 to PKR 1 million for launch promotions.

What Is the Cost of Opening a Restaurant in Pakistan?

Monitor inventory to minimize waste.
Ensure consistent food quality and service.
Introduce seasonal or special menus to boost sales.
Regularly train staff for enhanced customer experiences.

Restaurant Non-Registered and Non-Licensed Penalties in Pakistan

Operating without proper registration and licensing can result in:

Fines of up to PKR 500,000.
Temporary or permanent closure of your restaurant.
Legal actions and loss of reputation.

4 Tips for Marketing Your Restaurant’s Grand Opening

Invite Influencers: Hire food bloggers for your launch promotion.
Special Discounts: Lure customers with calls to action such as ‘this week only.’
Social Media Campaigns: Create buzz with teasers and countdowns.
Free Tastings: Engage potential customers with free food samples.

How Ways Tax Can Help

At Ways Tax, we help entrepreneurs set up restaurants in Pakistan with ease. Our services include:

SECP Company Registration: We help you in the process of legalizing your restaurant’s establishment as a sole trader a partner or as a legal entity – a company.
Tax Filing and Compliance: This is another important service through which we serve our clients to make sure that your restaurant is in complete abidance of the Federal Board of Revenue (FBR) regarding sales tax, income tax, and other formalities.
Document Preparation: Whether it is a trade license or food safety permit, from the preparation of the application documents, to filing them at the proper city offices.
Consultation for Licensing: We advise clients on where to get the licenses including the food safety license and trade license to ensure you are legally prepared to operate.

How to Start a Restaurant Business: FAQs

A restaurant business revolves around preparing and serving food and beverages to customers in exchange for payment. Depending on the type of establishment, services can range from dine-in experiences to take-out, delivery, or catering.

Yes, running a restaurant business in Pakistan can be profitable, but its success largely depends on several key factors. These include:

Location
Size
Expenses
Management

The most profitable food businesses in Pakistan are Fast food chains, Catering services, Coffee shops, and fast food restaurants specializing in non-traditional Pakistani food. They have high demand and reasonably good profit margins, mainly in the urban areas.

The average net profit for restaurants in Pakistan typically ranges between 5% and 8%.

A ghost kitchen is a delivery-only restaurant that operates without a physical dining space, relying on food delivery platforms for orders.

It is impossible to say what kind of food is the best for selling because it all depends on your concept and your target customers.

Some of the most common options are burgers and pizzas, fried chicken or pasta, salads and smoothies, and the specific dishes that are specific to your restaurant’s concept.

Pay attention to national prerequisites and trends to design attractive meals.

The process typically takes 2-4 weeks, depending on document preparation.

Get Started with Ways Tax Today!

If you were also wondering how to start a restaurant business in Pakistan then you might understand that the journey is filled with opportunities and challenges.

The conceptualization process, as well as all activities associated with it and arising from it, must be approached with strategic planning.

Seeking help from Ways Tax will make the registration process less of a headache and more on how you can offer your customers an excellent dining experience.

CONTACT Us to Register Your Restaurant Business!