Is Lassi Business Profitable in India? How to start One?

Is Lassi Business Profitable in India? How to start One?

Are you searching for a business with low investments and high returns? You have come to the right place.

There are very few businesses where the investments are low and potential earning is very high. One such business is the Lassi Business. The average income of a typical Indian has increased over recent years. This combined with the rise of Super Middle class has increased the consumption of luxury drinks such as Lassi, energy drinks, etc.

So, coming to your question, Is Lassi Business Profitable in India?  Yes, Lassi Business is highly profitable. Typical Lassi Shop earns about 58% profit on each sale. Furthermore, Lassi Market Share share has grown at an average rate of 20.3% for the past 4 years and it is expected to grow at an average rate of 32% in the next five years

So, considering how valuable it has become, we are going to discuss How to set up a Lassi Business and what are all the things we require.

Lassi Business Franchise? or Independent?

The first thing to consider when starting a Lassi Business is whether to go for a franchise or open an independent store.

This is a difficult choice considering, a mistake here could potentially lead your business to failure.

So, lets see the differences between Franchise and Independent store

FranchiseIndependent
Requires 6-15 lakhs to buy licenseNo License required
Equipment are issued along with LicenseHave to buy your own equipment Ex: Fridge, Lassi maker,etc.
They take care of legal licenses and obligationsYou need to do it yourself
Franchise decides products and priceYou decide products and price
Franchise decides offers and other incentivesYou decide offers
Have to pay a fee every month to the franchiseMoney you earn belongs to you
With franchise comes experienceYour experience is key
They help you with analytics and proven techniquesYou have to learn everything on your own
Cant start a franchise anywhereCan start even in rural areas
Lacks flexibility with products and serviceHighly flexible as you own the entity
Products are tested with the public and proved to be in demandYou decide products
recipes are predetermined and cannot be tweakedyou can change recipes and products as you wish
Franchises usually survey area and see if the store can be profitable. This information is very valuable for a store ownerAny market research should be conducted by yourself

The general thumb rule in the food industry is to go for a franchise if you are inexperienced. As experience is key in any food business to succeed

Go for a franchise if it is your first time in the food business. In addition, choose franchise if you don’t know enough recipes of lassis or don’t have experience making them. Experience and entrepreneurial skills are vital or food business and success takes a lot of time for a newcomer.

Market Research for Lassi Business

Market research is important for any type of business. It gives information on how likely the Lassi store can succeed.

For a Market Research for a Lassi business, you have to first

  • Find out who your customers are, based on your prices, products, and their buying power. Narrow down your potential customers to people who will definitely buy your products.
  • Estimate the costs and earnings and objectively analyze whether a Lassi Shop is worth the effort.
  • Ask your potential customers what exactly do they need in a Lassi Shop. Be open to their suggestions and understand their requirements.
  • Give your customers different recipes for free and collect feedback. This helps you to understand their tastes
  • Checkout existing juice shops, hotels, etc and see their prices and types of products.
  • Considering rent, wages, and investments, calculate the breakeven number of sales required, and find out how you can achieve that.

Location for your Lassi Business

Sales are highly dependant on the location of the shop. As much as 52% of sales a typical restaurant receives, is connected to the location. I cannot stress enough the importance of location for success of Lassi Store.

Perfect Location should have the following

  • The store should be visible to the public
  • Lots of people (preferably next to a market or main road)
  • Near and easily accessible to your niche customers.
  • Good seating arrangement
  • with good ambience

To know more, read 14 things to choose a right location.

Licenses required for a Lassi Store

In India, any business requires certain licenses. You can start your business without getting these licenses too, as per the rule that businesses can start functioning without licenses for the first 30 days. For Lassi Store, you need

1) Shop and Establishment Act License for Lassi Store

You need Aadhaar Card, PAN Card, and application fee of Rs.100-200. This is issued by the State labor department.

You can apply by visiting your respective state labor department website here.

2) FSSAI License for Lassi Store

You will need a Basic FSSAI license for a Lassi store. This is because initially your earning will not cross Rs.12 Lakhs (You can easily upgrade to State FSSAI if it does). The processing fee is Rs.200 and it can take from a week to 2 months to get issued.

You need Basic FSSAI License if the business revenue is less than 12 lakhs rupees per annum. When your income crosses 12 lakhs per annum, you should upgrade to State FSSAI license.

You will need a Photo ID, Address proof to apply. Link to apply for FSSAI License here. You can use the same link to update and check the progress of your application.

3) Trade License for Lassi Store

You can get it from your Municipal Office or you can apply for it online. The application fee is Rs.30.

To apply visit this Trade License LInk and enter your state or region in the advanced search section and click on search. This gives a direct link to your respective regions application website.

You need Id Proof and Lease agreement (if you have rented an establishment) to apply. It typically takes 7-10 days to get processed. An agent may visit your business and examine it.

4) Fire Brigade License

Every state fire department issues these permits, visit their website and apply. You will get to approved within 15 days.

This permit says that your business establishment is not a fire hazard.

5) Society NOC

Businesses only need this if your business is in closed colonies, apartments, etc. Lassi Store next to the main road does not require this.

This form states that the residents in the area are okay to have your business running there.

As mentioned earlier, you can always start Lassi Store without these permissions and apply for them later.

Managing your Lassi Business

Successful food businesses earn around 60% profit on each item they sell. This is called the Contribution Margin.

Important trait of every successful food business is they keep the contribution margin on their products not less than 58%.

To know more about how successful restauranteurs run their business read How long does it take for a restaurant to be successful.

Remember that the Lassi business is seasonal, you get huge profits during summer and may make little to no money during winter. So, if you are going to start a Lassi centre, start it just before the start of summer.

Adapt to the times of this Covid19 Pandemic and gain more customers. Show that your store considers hygiene as top priority and impress people.

After setting up, the success of your business depends on your ability to adapt to emerging market conditions. Tweak your ideas, products, prices, and approach as per need. Go online, it will increase your reach and customers love it.

Avoid simple mistakes that keep you away from profits. Check out the most common business mistakes and how to avoid them.

Final Thoughts

Lassi business is highly lucrative and will see strong competition in the coming few years. Every Franchise and independant store tries to achieve a considerable market share.

If anything, the longer you linger to start Lassi Business, the more competition you will have to face.

All The Best

Sandarsh Naroju

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