Tuesday, December 20, 2011
1) Cooking area - This means the area used for preparing the food - large commercial gas burners, tandoor, grill etc. depending on your cuisine.
2) Work tables adjoining the cooking area for preparing and keeping the final cooking ingredients ready. This could include veggies & meat cut appropriately, sauces, spices etc.
3) A Wash area that can be used for washing the cooking utensils & accessories and another wash area for serving dishes (plates, spoons, forks etc. - cutlery, crockery). In small restaurants, the wash areas for both tend to be combined.
4) A Small Store area - This is a dry area used to store the most commonly used provisions in the kitchen. Even if the restaurant has a separate larger store, the kitchen will need a small store or atleast a few storage shelves.
5) Pantry Area - This is the area where the juices, desserts, maybe even salads and other items which do not need cooking, are prepared.
6) Food Pick-up tables - Generally, you have a small table which is used to assemble the dishes to make it easy for the server/steward to come and pick-up the items and take them for serving to the customers.
7) Preparation Area - This could be an area used to cut meats, maybe have a grinder for grinding flour etc. In small restaurants, the same work table area is used for this. This would depend on your cuisine.
8) Staff Toilet Area: This, in my opinion is critical and a very basic need you need to provide for. A number of small restaurants do not provide this and you can see the kitchen staff using the customer toilet area.
9) Staff Changing Area: A small area for the staff to change to their work uniforms/dresses and hang their clothes and keep their personal belongings.
10) Space for keeping clean cutlery and crockery: This area can be provided for adjoining the kitchen or within the customer area in the form of "Side Tables" - The next time you go to a restaurant, you can see small shelves used to store plates, spoons, forks etc. Providing a space for keeping clean water glasses is also critical as these tend to be fragile and if you do not provide for it, you will end up with lots of breakage.
11) An area where the used cutlery, crockery and glasses can be kept for washing - This is a small area where the steward / clearing boy can leave the used the plates, cutlery and glasses for the washing staff to take and clean.
If you include all of the above, you will probably need 400-600 sft even for a small restaurant kitchen. Again, the exact space requirements would depend on the concept/cuisine. So please use the above as a broad guideline for the kind of space you would need.
Monday, December 12, 2011
- Company Registration - Any accountant/accounting firm will help you with this. You can register the company as a propreitership (easiest, but the firm and you are the same from a legal perspective), Partnership firm (minimal paperwork and minimal ongoing statutory requirements) or a as a Private limited company (reasonable paperwork and costs to set-up and reasonable ongoing activities). LLP is also a new option you can consider. Out of the lot, I would recommend the "Partnership Firm" approach - delinks you (the individual) from the company, gives it a more formal feel and the paperwork/costs involved are minimal both during set-up and on an ongoing basis. Plus if you accountant can help you plan your taxes creatively, you may be able to save some money by paying lower taxes on the profits you make through the presumptive income based model available for small businesses with revenues upto 50 lakhs per annum. Again, I am not a CA or a tax/accounting expert. I would recommend that you talk to your trusted accountant and if you don;t have one talk to 2 or 3 accountants and pick the one you are comfortable with.
- Permits / Licence Procurement - Once you find your location, these are not as difficult as it seems - it will just cost you money. So don't worry too much about it, unless you want to serve alcohol, in which case you will need to figure out the way to get the permits/licenses for this earlier. For the standard licenses, your local corporation office and your accountant can help you get all of those. See my post on licenses required for a restaurant business for details.
- Financials / Funding - For a restaurant business startup, it will have to be your own money with some support from friends/family. You can get a loan from a bank for property as collateral - Loan Against Property - most banks have a scheme for this. Here you mortgage your property for the loan - in the event you cannot repay the loan, the property will become the bank's and they will dispose it off to recover the loan amount. Working Capital Loans are not typically not available for new businesses. Let's say you have 3 restaurants operational for the last 4 years and your bank has a record of all your business transactions for the last 4 years with them. Based on this history, they may give a working capital loan / overdraft facility. The interest rates for commercial loans are currently in the 14-18% per annum range. I would suggest that you go and talk to the branch manager at the bank where you have your personal account - they will be able to provide you specific details on what options you can avail of in your situation. When you determine the total investment you need, I would strongly urge you to include working capital requirements for the first 3-6 months in your total investment figure, as you will need that time to build your business to an operational break-even level. So you need to have the funds ready to sustain your operational expenses for the start-up period.
- Location Search - It is worth hiring a good broker for this once you determine the kind of place you are looking at. You can also drive around, call the numbers from the To Let boards.
- Staff Hiring / Training - Staff hiring will be a painful part. The main guys you hire should be able to bring in the rest of the team, but getting the main guys will be the challenge. You can request an existing restaurant business owner to help you find someone good. If you are looking at a reasonable investment (say 25K per month + salary), then Naukri.com, Monster etc. may be a potential source for finding the key staff. Training is not established in this space - There are some consultants who can do some form of training. The main guy you hire should be able to help you train the staff initially.
Sunday, December 4, 2011
Interested Readers can purchase a copy of the NRAI White Paper on the Restaurant Industry for a fee of Rs.500/- for Delhi and Rs.600/ for outstation. The payment can be made in cash or cheque drawn in the favor of National Restaurant Association of India. The correspondence address is
Meanwhile, here are some press releases that provide a very high level summary of the research report. All these links are also available on the NRAI website - http://www.nrai.org/news.asp?id=6
Monday, November 28, 2011
Tuesday, November 22, 2011
- Restaurants can list themselves on Justeat and their menu will be uploaded on the Justeat website. Justeat also actively solicits restaurants to list for free on their website. Justeat works on a commission model - i.e. the restaurant pays Justeat 10% of the order value for all order generated through Justeat.
- Customers visiting the website can choose from the various restaurants listed on the website, place an order online. Since they have their profile stored on Justeat, they do not need to enter their address everytime they order. For select restaurants, Justeat also allows payments to be made online (This is a very small percentage currently though I expect this number to increase in the future)
- Upon receiving the order, a Justeat representative calls the restaurant and places the order. They have recently introduced a device that is distributed to the restaurants, which can communicate the orders automatically to the restaurants.
- The restaurant then fulfills the Justeat order, like they would do for a normal delivery order. They deliver the food, collect the cash.
- At the end of the month, Justeat sends an invoice to the restaurant listing all the orders placed by them with the 10% commission that needs to be paid to Justeat. They send a guy with a hard copy of the invoice and collect the money/check from the restaurant.
- They offer billboards to restaurants for a discounted fee, but include their logo in the billboard generating a very low cost way to market their brand.
- They offer carry bags (used for delivery) with the Justeat logo prominently marked on them. They offer these bags at a discount of 20% to the restaurant owner. Again a very creative and low cost way to increase awareness of their brand.
- They also partner with the restaurants and share the costs of printing flyers - again the Justeat logo is prominently displayed on the flyer alongwith their number. In some ways, customers may call Justeat for the order since their number is the one visible on the flyer. Again they subsidize the cost to the restaurant owner by about 20%.
- They are also starting to provide restaurants with napkins, napkin holders, standees for the table and everything else a restaurant needs at a discounted price, but with the Justeat logo on them.
Tuesday, November 8, 2011
Tuesday, November 1, 2011
- The Waiter notes down the items that you want to order – usually most restaurants will have their own short name for each item that all the staff understand. E.g. Gobi Manchurian could be G.Manch.
- The pad/paper on which the waiter notes down the order is called KOT (Kitchen Order Token/Ticket). Usually, KOT books are printed as a 2 copy (Duplicate) or as a 3 copy (Triplicate) – i.e. The first sheet could be white, the second sheet will be of a different colour (say yellow) and the third sheet (if it is a 3 copy KOT) will be in yet another colour (say blue) – then the sheets repeat themselves in the same colour order. There is also a serial number generally printed – 1 number for one set of 2 or 3 pages to enable tracking if required.
- KOT books are usually of A8 size (one fourth of a A4 sheet) or of A5 size (half of a A4 sheet).
- The waiter inserts carbon sheets to make automatic copies – 1 if it is a 2 copy KOT book, or 2 if it is a 3 copy KOT book. Nowadays you get self copying paper (i.e. a carbon sheet need not be inserted to make a copy) at reasonable prices. Most banks now issue check books of this nature.
- The waiter starts with writing down the table number (in most restaurants, the tables are numbered and allotted to waiters – i.e. one waiter is responsible for a set of tables – say Tables 4 to 8). The waiter then notes down the order.
- One copy of the KOT is given to the cashier (for billing purposes). Another copy is given to the kitchen for preparing the dishes - Usually, to the “Barker” in the kitchen. The waiter keeps the third copy with himself. In small restaurants, a 2 copy KOT is sufficient as the waiter does not need one and can always refer to the cashier’s KOT if there is any confusion with the orders.
- The role of the “Barker” is to collect the KOTs, literally shout out the orders to the respective kitchen staff (i.e. for juices, he shouts the order to the guy in the pantry, for starters to the cook who is responsible for making the starters, for the entrees to the main cook who prepares the entrees etc.). Once the respective food items are prepared, the barker then assembles the dishes according to the KOT and hands over the prepared dishes to the respective waiter.
- Having a good barker is very critical in most restaurants – especially during busy times. Think of the Barker as a Orchestra Conductor. The Barker also makes decisions on whether to send an order in full or in parts – e.g. if a table has ordered drinks, starters and entrees, the barker will make a decision to send the drinks and the starters first and then the entrees. In some cases, if the food order is going to be delayed, he may send some of the entrees earlier.
- The waiter then hands over the dishes to the respective table.
- Additional orders are noted down on a new KOT, with the same table number and the process is repeated. The cashier collates all the KOTs received by table number and when the waiter asks for a bill, the cashier prints out the bill.
- Once the payment is made, all the KOTs for that particular table are stapled and filed. At the end of the day, the cashier and the manager are expected to compare the KOT orders with the bills that have been generated to ensure that all orders have been billed. The kitchen is also typically instructed not to prepare any food without a KOT for audit/control purposes.
Sunday, October 23, 2011
Tuesday, October 18, 2011
Sunday, October 16, 2011
Restaurant review sites are becoming popular and with the increase in the number of discerning customers, there is more interest in gathering feedback about a restaurant before making a decision to visit one. Given restaurant spends are a low-ticket, impulse decisions, the impact of review websites may not be as high as in categories such as Cars, hotel stays etc. If you are a fine dining restaurant or a very unique concept, there is a small chance that you can create a fan following on these review sites, which will lead to an increase in the number of visitors to your restaurant. This is a tough one to crack though, as the reviews are posted by end consumers and there is no control over the content that they write. In general, customers like giving feedback in extreme situations - when they are upset with something or when they are mighty pleased with something. So from a planning perspective, you will need to figure out a way to get a lot of reviews written about your restaurant business and hope that your restaurant gets more good reviews than bad ones. Other than reviews, these sites also offer paid options, where your restaurant is featured on top of search results – e.g. if a customer enters a search keyword, “Italian” or selects “Italian” as the category, you can pay “Burrp” to show your restaurant on the top of the list. These paid options are fairly inexpensive (about 15-30K per year), and may be worthwhile for new, unique concepts, to generate some interest and get the word out to active foodies.
Tuesday, October 11, 2011
What could possibly be some of the reasons you want to start a restaurant business?
- I am tired of sitting in front a computer all day along – I want to do something different. The restaurant business seems easy enough and attractive.
- I want to be an entrepreneur and create the next big brand/company.
- The food business in India is expected to grow significantly over the next several years and I want to ride the wave.
- It could be a “Recession Proof” business – as the food is a basic need and will never lose money
- It seems to be a very profitable business – most people I talk to tell me that I can recover my investment in 3 years (That turns out to be a 33% annual return on the investment – fascinating)
- I have a passion/strong interest in this business and want to be seen as a restauranteur.
- Other Reasons you may have
Reactions to the “Whys” 1 & 2.
- I am tired of sitting in front a computer all day along – I want to do something different. The restaurant business seems easy enough and attractive.
The best way to convince yourself that sitting in front a computer all day along is absolutely worth the effort and the best possible option for you (Return on investment for the amount of work you will put in and the sacrifices you will make), then I would encourage you to quit your job and start a restaurant. You will find yourself running back to the same cubicle you came from, sooner than you can imagine, and this time, you will use Araldite or something even stronger to hold on to your job.
- I want to be an entrepreneur and create the next big brand/company
If you are want to be a true blue entrepreneur (bootstrapping approach), then I believe there are better opportunities available – ones that are more Venture Capital friendly. With external investment your chances of building a large brand and a business is tremendously accelerated. Professional investors, who invest in start-ups, generally pick businesses where the founders already have some experience in the same business area. Plus they like IP (Intellectual Property) creating businesses, where scaling requires much lesser investment compared to the revenues/profits that can be generated.
I believe that the restaurant business fundamentally is NOT a Angel Fund/Venture Capital friendly business. Why?
Like I mentioned earlier, Angels Investors and VCs seem to like businesses that can create a product/solution/offering using the initial money they invest, that can then be scaled at a rate that is positively disproportional to any additional capital investment. For a restaurant business, even if your first unit is very successful, to grow, you would need a lot of capital again and again. If "x" is the investment for the first unit, to grow revenues by 100 times, you would need an investment of 100x (probably more if you need more money towards marketing/branding). VCs like businesses where if they invest “x” initially to create a product, then to grow revenues by 100x, they would probably need to invest 10x/20x, primarily towards sales, marketing and customer support. Having said this, there are quite a few restaurant businesses in India which have received VC funding so far. Plus with the market expected to grow significantly in the next few years, VCs may start getting more interested.
Reactions to reasons 3 to 7 to follow soon.
Saturday, October 1, 2011
There seems to be something fascinating about owning and running a restaurant, a coffee shop, or even a really small business in the food industry. It is probably something like getting attracted to the opposite sex. A large number of people are infatuated towards the restaurant business, and by the law of averages, a small percentage of them actually end up doing something about their infatuation.
Why does this fascination/infatuation happen?
Reason 1: Everyone Understands this Business
Cricket – The unofficial national game of India, evokes significant emotions both when we play and when we watch India play. Almost everyone in India plays cricket or strongly believes that he or she knows how to play cricket. While watching from the dugout or on TV, you feel that your team member batting in the centre is not playing the shots he should and you feel you should be there whacking the ball around or telling him how to play. But when you go out to play, you end up struggling the same way as your team-mate or even worse.
I met with a seasoned professional in the investment banking space and one of her statements really caught my attention. We were talking about a specific restaurant "Biryani Merchant" that was set up in Bangalore a few years ago. The restaurant shut shop after about a year in operation. She told me that service in that restaurant was really bad and that was the reason they shut down. Though I quickly wanted to ask her how many times she had visited the place and on what basis she was making such a strong statement with so much conviction, I wanted to be nice. But my guess would be "Once" or maybe 2 or 3 times at best.
Almost all of us have visited a lot of restaurants over the last several years. We all have opinions about what is good and bad in any restaurant we visit and what needs to be done to fix the restaurant. This repeated exposure to the business as a customer leads us to believe that we understand the business and what works. Add to this, the age old adage that “If you understand the customer needs and fulfill them, your business will be very successful”.
Reason 2: The Restaurant business seems very successful a.k.a profitable
Most restaurants we visit are typically crowded whenever we visit them – it is another matter that we mostly visit restaurants during weekends or the same times when everyone visits the restaurants. We also typically visit restaurants that are good, recommended by others and the ones we like. Most of these businesses have typically figured out the basics of the business and tend to be operationally profitable. But given our incorrect sampling (even if we have visited over 100 places, most of the 100 end up belonging to the same sample set), we tend to intrinsically believe that all restaurant businesses are very profitable.
Now you have an easy formula – I understand the customer need, the business seems very profitable – let me get into it and make some money and become famous.
Reason 3: Low Entry Barriers
Starting a restaurant business has very little entry barriers. The only real barrier is having some cash to invest. Most people end up saving enough money over a decade or so to be able to invest in a restaurant if they have a real interest. In a number of cases, a few like minded friends are willing to chip in with some money for you to play around with.
Reason 4: The Cool Quotient
Owning a restaurant seems to evoke certain emotions, which make you feel really good and proud – you are probably considered “Cool”. Maybe it is about having a popular place everyone knows about, a place where you can invite friends and contacts and show them a good time. Visiting a restaurant is a “Feel Good” experience for customers – the restaurant is typically filled with positive vibes – the business in general evokes only positive emotions. I believe this is one of the big reasons for a lot of people to get infatuated with the business.
Reason 5: Advice from Successful people & I can work hard
Once you have an initial interest, you talk to a few restaurant business owners – typically the owners of the restaurants you frequent (essentially from the same sample set above of restaurants which are successful and have figured out the basics of the business). In general, we tend to talk to successful people for advice, the media writes about success stories that we read. The unsuccessful people like to forget their bad experiences and move on – so they don’t really want to talk about it or build associations with their unsuccessful efforts. I am firm believer that “Success breeds success and confidence”. So when you talk to successful people, they tend to encourage you and indirectly push to take the leap.
The only real negative thing that successful restaurant business owners will tell you is that it will be a lot of hard work. Even when they tell you this explicitly, we tend to feel that if others can do it, I can – so you really don’t assess how much hard work setting up and running a restaurant business is, compared to most other businesses.
So what you have is a cool profitable business that is easy to understand – so you get infatuated. And then if you have the money and the time, you jump into it. Now isn’t the world becoming very analytical where we try and make every decision very rationally after diligently evaluating the pros and cons? So when you are putting your life, your career and your money on the line for starting a restaurant business, why aren’t we rational about the decision making process and the approach we take?
Friday, September 23, 2011
Since the restaurant business typically targets end-consumers as customers, it is critical to create a “PULL” for customers to try out your restaurant. So from a marketing perspective, you will need to think like a FMCG (Fast Moving Consumer Goods)/Consumer services company. The trouble is that implementing a good Marketing plan costs a lot of money (when you look at absolute amounts required). Like in most businesses, you will want to allocate a portion of your revenues as marketing expenses – say 5-10%. For a FMCG company like ITC, their revenues for each of their products run into several hundred Crores – so 5-10% of such a large amount is substantial and lets them do some great things with their marketing budget. For a Restaurant business your annual revenues will typically be 1-2 Crores per annum per unit. So, unless you have a large number of units (like say Dominos Pizza), your marketing budget will be very small in absolute terms. So realistically, you cannot use some of the same marketing options that the larger players and other FMCG/Consumer services companies use, but will need to efficiently reach out to your target customers and create the “PULL” factor.
The biggest and the best marketing investment a restaurant business can make is by picking a great location that has very high levels of visibility. We have already beaten to death and even more the topic around the “importance of location”. This is just another nail in the same coffin.
The second best marketing for your business will come from “Word of Mouth”. You need a lot of your customers to talk about/recommend your restaurant to their friends. If you have read the book “Outliers” by Malcolm Gladwell, you need a lot of connectors and mavens to visit your restaurant, like your restaurant and then spread the word as much as possible.
As a restaurant customer, if you look at the number of new restaurants you have made a decision to try out – i.e. it does not include new places you go to because you are invited there by someone else, I can bet, without doing any kind of research or surveys, that over 50% would be because of its location –
1) You are in the area, the place looks like something you want to try out, or
2) You keep seeing the place so often (it is in your neighbourhood or in an area that you frequent) that you almost feel bad not to check it out.
The remaining 20-30% would be because a friend (someone you trust or someone in your circle who is considered a foodie) recommended a certain place.
So that leaves the other 20% or so new restaurants, which you have visited, to other marketing initiatives that have caught your attention – maybe an ad or a flyer or a review you saw.
If you get the drift of what I am getting at, 80% of your marketing impact will come from your location and “Word-of-mouth” referrals from customers who have visited you. So if you don’t get these two right, whatever else you try will make absolutely no sense and the results will leave you disappointed.
So in reality the remaining marketing options we are talking about are like the cherry on top the cake – they can help improve the number of customers visiting your place by a bit, but will probably not turnaround your business by opening the floodgates.
One caveat to the above theories: When you are launching a new restaurant, a number of these marketing options mentioned below may help drive the initial traffic to your restaurant and may be quite effective.
The secondary marketing options that are available to you and those that restaurants typically tend to use.
- Advertising in Newspapers – Paid Ads
- Advertorials in Newspapers – Paid articles written about your restaurant in a newspaper
- Just Dial and similar Directory Services
- Bill Boards
- Restaurant Review websites such as Burrp.com, eveningflavours.com
- Online Menu and Order enabling services such as Justeat.in/Hungryzone.com
- Flyers in the Newspaper
- Deal Websites such as Taggle, Snapdeal, Koovs, DealsandYou, Dealivore etc.
- SMS marketing providers such as mGinger.
- Google Adwords
Thursday, September 15, 2011
The post below is from http://bangalore.citizenmatters.in/blogs/show_entry/141-interview-kiran.
This was an interview conducted by Anjana Vivek, that was published in Citizen Matters on Apr 28. 2008. There are some useful insights - so I am sharing this through my blog. All credits and copyrights related to this interview belongs to Citizen Matters.
Interview: Kiran Nadkarni, Founder Kaati Zone
It gives me great pleasure to start the interviews on this blog with Kiran Nadkarni. Kiran is Founder & Director at Kaati Zone, a chain of quick service restaurants specializing in Indian foods.
Kiran was among the early VCs in the country. Prior to starting Kaati Zone, he has held positions such as President, ICICI Ventures, and Managing Director, Jumpstartup Ventures. He has been an entrepreneur for over three years now and has raised funds for this venture.
Read on to know more about why he turned to entrepreneurship and his experiences in running his venture started in Namma Bengaluru with global aspirations...
Question: You have been one of the early VCs in India, what triggered you to move from someone who invests in entrepreneurs to an entrepreneur who is invested in by someone? We have heard of many entrepreneurs who become investors, you are following the reverse route!
Answer: I had spent 18 years in early-stage venture investing, and wanted to rediscover myself in a way. I was living in the US during 2002-2005, when I first thought of doing the Kaati Zone venture. I felt there was an opportunity to take a brand in Indian foods to the mainstream US markets. Initially, I had planned my involvement in the venture to be much like that of a venture investor, providing strategic inputs to an operating team. However, when I returned to India, I realized my full-time involvement with the venture was very important for it to succeed. You can say, I got sucked into full-time entrepreneurship gradually.
Question: Why this industry, how did you zoom in on this?
Answer: I was living in the US from 2002 to 2005. I noticed that, while Indians were a significant minority in the US and Indian food is popular among locals, most Indians who entered this industry were targeting the ethnic Indian community and did not address themselves to the larger local population. I felt there may be an interesting opportunity to take an Indian food brand to mainstream American market. We chose the quick service format, as it is a scalable business and one can build a significant company with this format. We studied the characteristics of and the current trends in the quick service foods industry in the west and planned our venture accordingly. We had planned to build out the concept on a pilot scale in Bangalore before moving to markets overseas, but things changed as we moved forward.
Question: Did being an investor in companies help you when you started your own venture?
Answer: My involvement as an early-stage venture investor in young companies did help in conceptualization, planning and defining strategies. However, I must admit day-to-day execution was something new to me.
Question: In your mind, what is it in your business that has helped you raise venture capital funding for your company? Any lessons you learnt that you would like to share with entrepreneurs re the fund raising process?
Answer: An early-stage investor assesses three important parameters in a business. He invests in the management team, a business idea that is scalable and can be built into a large enterprise, and a product offering that stands differentiated in the marketplace. My prior experience in venture industry clearly helped me define the initial goals to be achieved before tapping external capital. We invested in a central kitchen that serviced all outlets and demonstrated the hub-and-spokes model that can be scaled. We established a unique identity for Kaati Zone through our products and packaging that signified quality, health and elegance. We built a strong customer base not only for dine-in but for take-away and deliveries (including bulk deliveries to over 80 corporates in Bangalore, many of whom are multinational corporations). We have also ensured that we have retained most of our talent (from restaurant manager level upwards) during the difficult phase of our company. We have achieved it through regular interactions and communication about our vision, growth plans and innovativeness. Our team members have seen opportunities in Kaati Zone and have benefited from our growth.
Question: What is the best thing about being an entrepreneur?
Answer: The idea of introducing innovation in marketplace and making it a success drives the entrepreneurs most. I have also enjoyed charging up my colleagues with entrepreneurial zeal and passion. Young companies are usually unable to hire the best and most experienced talent. The entrepreneurial passion among team members can, to some extent, make up for this handicap.
Question: Is there anything you dislike about being an entrepreneur?
Answer: There is nothing about entrepreneurship that I dislike. I have always respected entrepreneurs and the spirit of entrepreneurship. However, I am extremely disappointed with the system within which we expect our entrepreneurs to deliver success.
- There is not much early-stage venture capital in India. Most investors focus on late-stage private equity deals of multi-million dollar size. I can count only a handful of silicon-valley style venture firms who are willing to back start-ups. Even the silicon-valley based venture firms which have entered India are shying away from start-up deals. I would have liked the Indian national financial institutions, banks and insurance companies to create a pool of capital that could support private initiatives in venture capital to support start-ups and young companies. The Small Business Administration (SBA) in the US contributed significantly to the growth of venture capital industry there. We require similar initiative to create an ecosystem of risk capital.
- The large-scale corruption in different agencies of Central and State Governments takes a heavy toll on young companies.
- Entrepreneurship is a high-risk game, and failure is part and parcel of it. Unfortunately, failure carries a stigma in our society and among investors.
Question: Are there any other insights / learnings / experiences you would like to share with an early stage entrepreneur in Bangalore or someone who is thinking of becoming an entrepreneur?
Answer: Here are a few suggestions for potential entrepreneurs:
- Entrepreneurship is a tough business. It requires staying power and perseverance on the part of entrepreneurs. Do not get into it because it appears glamorous. Attempt it only if you are passionate and are willing to hang in there for a long-term.
- Plan a business that can be built into a large enterprise. Very rarely do venture capital firms invest in small niche businesses.
- Innovate and stand differentiated in the marketplace. Build entry barriers for competition.
- Work actively to hire and retain quality talent. With most industrial sectors booming, employment opportunities are aplenty and retention of staff a very difficult task. This is a test of leadership skills of the entrepreneur.
- Leverage your contacts and networks to grow the business quickly. Also, focus on growth of topline even if it means sacrificing profits in short-term. Profits will grow with scaling up of the business. Venture capital investors like a growing business. They may not necessarily like a business that is profitable but growing moderately.
Monday, September 5, 2011
1) The Location - Great single storey building in a prominent road in Koramangala with parking available quite easily around the area.
2) The Concept - Focused around Dim-Sums with a larger Chinese style menu. The quality of the food seemed to be pretty good going by all the reviews.
3) Sensible Pricing - Priced reasonably well. Average spend per customer - approx. Rs. 200-400 with some value lunch offers. Value for Money for customers while allowing enough margins for the business to make money.
4) The Setting - Quite unique and nice with a mix of outdoor and indoor areas with water bodies. A unique visible kitchen area.