Potato chip manufacturing has been a core business idea which when planned and implemented properly lets you gain high returns. You can start this business from the comfort of your home as well.
The flexible nature of production in this business has firmly allowed various entrepreneurs to follow their dream of small scale low investment business. Potato chip business comes under the food industry so the risks are always there in this business at different stages of strategies.
Homemade chips are high on demand because of the accountability and reliability people associate with them. The demand for potato chips is going to increase by 4 percent every year.
Chips are healthy food with low fat so the demand keeps on increasing in the market. Let’s find out the various factors involved in this business.
Firstly let’s Make A Blueprint:
Every business needs a business plan. Well in the food industry, your business plan should start with performing a SWOT analysis and deciding which type of business plan you want to opt for.
Further, your business plan should inculcate all the investment and financial analysis. Implementation of strategies according to the required marketing plan is essential too.
The business plan should start with a proper execution plan and should configure achieving the marked targets and attaining profits. So this can be made into a flow chart to describe the steps involved.
Starting a food industry would require an essential business plan. Working on your skills is another yet important element to maintain the quality and accountancy of yours.
Legal operation is similar to opening a private company that you need to complete to kick start your business plan. Make a proper flowchart of the process to excel in this business and earn well
- SKILLS MANAGEMENT
- INVESTMENT PLAN
- INFRASTRUCTURE AND EQUIPMENT REQUIREMENTS
- ALLIANCE AND KEY SUPPLIERS
- ADVERTISEMENT AND MARKETING TECHNIQUES
- CUSTOMER BASE
- PROFIT ANALYSIS
Investment Estimation – Overall Cost In Potato Chip Business
Investment in this business includes capital on assets, infrastructure, marketing, registration, etc.
We will dig the approximate cost that is required. If we take an overall reading on the various costs then, approximately your startup needs 80, 000- 1lakh in your pocket if you thinking to start it on small scale from home.
Although the location, design, and infrastructure will increase or decrease some amount as an estimation, the financial burden is around 1-2 lakhs. Let’s list out the factors of investment.
- RAW MATERIALS AND KEY SUPPLIERS
- PLANT AND MACHINERY
- MARKETING AND LICENSING
- RAW MATERIAL SUPPLY:
Raw materials are very important and getting contracted with the key suppliers. You have to work according to the variety you are willing and planning to distribute in the market.
At the initial stage, you have to decide what type of potato chips you need to introduce to your customers to build brand loyalty and converge with the market demand and supply trend of potato chips. There are a variety of potato chips flavors.
But basic raw materials include :
- SWEET POTATOES
- ADDED FLAVORS
- SALT AND PEPPER
- CHILLI POWDER, ETC
When we talk about the raw material suppliers then you should contract local wholesalers for this. As potato is a staple food item, it is available widely at the average rates. You can buy a quintal of potato for around 1200 rupees whereas sweet potatoes will coat you around 4600 rupees. The flavoring items are also low in cost. This all reduces the total variable cost of your business. You can buy cooking oil, garlic powder, salt, etc. at a bulk in accordance to the need of the order of potato chip placed by your customer.
Legal Registration And Other Formalities:
The food industry binds you with a lot of requirements related to various kinds of permits. The permits are very important before you start your business operationally. Like if you want to serve beer and wine then you need a prior permit for it. Likewise, food and infrastructure-related permits are required.
Given below are some of the import permit that is mandatory apart from music and pollution license :
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1. FOOD LICENSE:
FSSAI ( Food Safety and Standard Authority of India ) license is very important to acquire. You can apply for this permit online on the website (www.fssai.gov.in ). In order to save the renewal fees every year, you should get a license for five years which will cost you Rs.15, 000.
There are various agencies that charge about 5, 000 to get your an FSSAI certificate. You can approach them also to get your work done by giving them the required papers.
GST (Goods And Services Tax) registration is also mandatory. You have to take the help of a CA (chartered accountant) to get your business registered by providing the required papers.
3. MSME (Udyog Aadhar)
4. BRAND REGISTRATION
5. PLANT AND REQUIRES MACHINERY :
These elements eventually decide the bulk part of your investment. If you are deciding production size and quality at a large scale then you need to look for all the factors that accompany it like location, rental expense, and electricity.
You would require a big place also. If you are planning small scale production then you would require a space of 500- 800 sq ft. The machinery investment also starts from.35000 rupees.
Let’s take a look at the types of machinery and other equipment required :
- POTATO PEELING MACHINES
- FLAVORING MACHINES
- AUTOMATED POTATO SLICER
- POTATO CHIP DRIER MACHINE
- DEEP FRYING MACHINE
- POTATO CHIPS PACKING MACHINE
- BASIC PROCESS OF MAKING POTATO CHIPS :
Useful link to Purchase Potato Chips Making Machine
With the above mentioned raw materials and machinery, the process of Potato Chips is :
- PEELING THE POTATOES WITH PEELING MACHINE
- CUTTING INTO STANDARDISED SIZE BY SLICING MACHINE
- THE THIRD STEP IS DRYING THE SLICED POTATOES
- AFTER DRYING THE SLICED POTATOES, DEEP FRYING OF CHIPS
- FLAVORING IS THE SECOND LAST STEP
- IN THE END, PACKING OF POTATO CHIPS
6. ADVERTISEMENT ESSENTIALS:
Marketing is essential for any business. Start with making a perfect logo and display board. An attractive and well-designed board may cost you 25, 000 rupees. Creating your own logo will help you with branding and will make you a unique identity.
Displaying your service items is not enough, you need to have a menu. It should be a proper professional menu enlisting your expert and unique items along with common and in-demand items.
Pamphlets are of great help for marketing. Get around 30 -40 k pamphlets. Website and social media are recommended. You should tie-up with online dating apps. Google is an example as it gives ratings according to customers review.
Also, contract with the local delivery agencies for delivery service purposes thus this will help you with the marketing and advertisement also. There is a lot of profit margin in this business.
You can gain 30,000- 40,000 rupees by approximately investing 1 lakh in raw materials by selling a 100-gram packet of potato chips for about 15 rupees at minimum cost.
It means there is a 30% percent profit margin in this business. Hence, a very profitable business idea.