Thursday, September 20, 2012

Software for Restaurants

Over the last several weeks, I have been researching software and technology solutions available for restaurants. The results are not too encouraging - most of the vendors who offer solutions for the restaurant business have simply taken a product they have for the retail segment, made some changes to suit the needs of the restaurant industry and are marketing the solution currently. Plus, since they need to build a product that needs to work for every kind of restaurant, they have added a lot of features and functionality that are not mission critical. Above all this, the thing that really struck me was the poor User Interface and lack of focus on the "Ease of Use" factor. In my mind, whatever application is being designed for the restaurant industry has to be highly intuitive and exceptionally easy for the staff (waiters, kitchen staff, cashier, manager etc.) to learn and use. In some ways, the real requirement of the restaurant industry is a solution that can simply replace the pen and paper methods currently being used. As you can see, I have been spoilt by the iPad. For context, I hate "Touch", but have been fascinated by the iPad and am able to use it easily. The feature I love the most - If I get stuck anywhere, I can simply press the only button on the iPad and it brings me to the familiar home page.

Getting back to the topic under discussion, I have been quite disappointed with my research and have been surprised that I have not been able to find a single solution that I can intuitively see as being "PERFECT" for Restaurant Businsesses and does all the basics really well. No wonder all the big guys have developed their own software - McDonalds, Dominos, Pizza Hut etc. Not to take-away any credit from the existing vendors who offer Restaurant Software, they offer pretty good solutions for the price they charge (a one-time license fee between 15K and 30K), but not the kind that makes me go "Wow! This is Perfect". Maybe it can't be done at the price points the restaurant businesses wnat to pay.

I have initiated a project to create a solution that is designed specifically for restaurant businesses with the primary focus on "Ease of Use" for the restaurant staff, and have found a bunch of seemingly skilled programmers who are willing to develop this application for me at a ridiculously low price, based on the screen design, process flow charts and requirements I have given them, If I can actually get this solution developed at the price they are asking for, I will make it available for "Free" on this blog. Maybe, I am simply dreaming about the "Ideal" solution.

Tuesday, September 11, 2012

ESI Compliance for Restaurant Staff

ESI (Employee's State Insurance) offered by the ESIC (Employee's State Insurance Corporation), is a government run program that allows employees earning below Rs.15,000 per month, to access ESI hospitals and several government run hospitals for free treatment. For the restaurant industry, any business that employs more than 10 people (even if some of them are non-permanent and some of them earn more than 15K per month - essentially 10 includes all those employed by you, including the manager, chef etc. not just labour), is legally required to offer the ESI benefit to the employees. There was some confusion if the minimum number of employees needed for compliance is 10 or 20, but I have confirmed that for restaurants the number is 10.

While we always keep throwing brickbats at the government and complain about inefficiencies, the ESIC department seems to have made some significant improvements in the quality of services and the ease with which a company can enroll and comply to the legal requirements. I would urge business owners to visit By visiting an ESIC office, you can easily enroll in the ESI scheme and pay your monthly dues and file your employee details statement online. There are some small fees payable during the enrolment process (both official and perhaps a small amount unofficially).

Once your business in enroled and you obtain a ESI number, you can enter your employee details and instantly generate temporary Pehchan cards (ESI ID Cards) with a unique number. The employees will then have to go to the ESIC office, get their photographs taken and collect their permanent Pehchan cards. The good thing now is that these Pehchan cards are now transferable - i.e. if a new employee joins your company and already has a Pehchan card, you can simply enrol him using his existing Pehchan number.

The cost to the business in providing this benefit to employees is equal to 4.75% of the employee's gross salary (Please note: The amount is based on the Employee's Gross Salary and not Basic like in the case of PF). In addition, you will need to deduct 1.75% of the employee's gross salary as the employee's contirbution towards ESI. The amount needs to paid on a monthly basis alongwith employee details statement that needs to filed online every month.

From what I have heard the quality of service at the ESI hopsitals has improved significantly and is a boon, especially for worker's who have had serious health issues.

For a change, it is time to congratulate the government (specifically the ESIC department) for some great progress made and I sincerely hope they keep and improve the services offered by ESIC. Hopefully business owners will slowly start seeing the benefits of the ESI scheme and will want to offer the benefit to employees rather than simply seeing ESI as another statutory obligation they need to comply with for the sake of it.  

Sunday, September 2, 2012

Getting Money for your Restaurant Concept

I have had several readers enquiring about where to get the money to start their restaurant. While I would love to say that you can go to a bank and get a loan easily or go to a particular angel investor group and get the money, the real answer is what you already know - you will need to find the money on your own.

For a concept on paper, you will need to dip into your own savings, get money from friends and family (either as debt or as equity - I prefer debt as it is clean and you are very clear in your mind that this is a loan that you need to pay back, preferably with interest). If you own a property, banks will lend you money not so much for your business, but based on the value of your property. Essentially the property will be the collateral for your loan. Even these loans are not too easy to get as banks will be worried about the usage of the funds and need to be convinced about your ability to payback the monthly dues. They may want someone to underwite the loan - i.e. someone else takes responsibility of paying the monthly dues if you fail. Of course, if you have a few wealthy friends, you can coerce them into funding your business idea or underwriting your bank loan.

VCs typically look at this space once you have established your business, are operationally profitable and have demonstrated execution and scaling abilities. So you will need to get to a 8-10 unit level before getting any serious interest from VCs. Angel Investors may not have the appetitie for large Capex restaurant concepts.

In summary, you are pretty much on your own to find the funds required for your restaurant business concept.