While the economic downturn of 2008 impacted the economy and in turn individual spending power, much was done by those in the food services industry to keep business from going under. Restaurant goers were encouraged by the fact that menu prices were the same for most part despite an increase in the costs of raw material such as vegetables, grains and poultry. Things were further kept in check by multinational brands and restaurant chains continuing their exploration of the Indian market. In such times, there remained people who were brave enough to venture into the restaurant business.
In the recent times, Chennai has been expanding its culinary palate to provide its denizens a larger spread. Contributing to this trend are several individuals who have readily left behind a corporate career to pursue their love affair with food. Although profitability plays a huge part in a professional moving from one career into the food services industry, the shift is most often out of a personal interest.
Raghu Rao, founder of Emilio’s Gelateria, made a life change when he decided to move from the telecom sector, where he had spent many decades, to the food services industry.. “I used to travel a lot to Italy on business. And during my travels I came across the best gelatos. My friend, Emilio, introduced me to the technique, the flavour, the quality, the texture of gelatos and I decided to leave telecom and start a gelateria,” he says.
The biggest change from being an employee to becoming an entrepreneur were countering the risks involved. At that time, Raghu’s son was still young and his wife was a little taken aback by his decision to change professions completely, especially since the new business often kept him away from home.
A prerequisite for any entrepreneur are the long days learning the business, finding the loopholes and fixing the glitches. And while Raghu learnt on the job, his friend and guide, Emilio pointed him in the right direction. So, from understanding the basics of the business, to investing in technology and infrastructure to managing employees, he learnt on the move.
A little less than 10 years ago, a gelateria would not have been a viable business model, but, today there is a need for new ideas. What makes any idea click is the response it generates. In the food industry, growth might come at a slow pace, but, once consumers take to the idea, loyalty is assured.
There are others who have also taken the plunge, willingly. Says Tangerine owner Arun Rao, who was a ‘marketing guy’ in the electronics and information technology industry, “I have always wanted to own my own restaurant, but, became part of the corporate world instead and one day my wife Manju, who used to be a lawyer and I just decided to do it. The restaurant business is different from what I was doing before, there has been a paradigm shift.” This was a big move indeed as neither had a background in the food business. While with any business, marketing, people management, sales, is a part of the deal, the food business has to impose stringent quality checks. A single mistake can affect the final product adversely, leading to terminal consequences. The Raos were determined to get things right, from the start. The couple worked with consultants to set up Tangerine in 2002 and there has been no looking back.
Whipping up success
For a restaurant to be a success, there are several factors that need to come together. While decor, ambience, location all play an important part in making the business successful, the bottom line is quality.
“Money is just one aspect of the business; your investments also include huge direct and indirect costs besides manpower costs and operational costs. The food industry is not profitable initially. If you are getting in to make quick money, this is not the business to do it. This cannot be a short-term business, as this is an expensive industry,” explains Raghu Rao.
For this telecom guy, he had to learn everything from scratch, finding vendors, suppliers, quality ingredients, understanding and investing in machinery and infrastructure. There was also a phase of extensive testing at Emilio’s’ factories. All of this helped better Emilio’s and in turn, increased demand.
Appetite for risk
The biggest risk in being part of this industry is that it is dependent on external factors. Even with endless preparation, consumer acceptance depends on individual tastes. Unlike other industries where the consumer might give the maker a second chance, it is highly unlikely that he will eat at a restaurant he did not like, first time around.
The risk factor although tantamount, never held either of these entrepreneurs back.
“There was no plan B. I quit telecom and decided to pursue this. While my wife was very surprised initially, especially since we have a young son, I knew this was what I wanted to do. I did not grow up wanting to be a part of this business, but, it happened. And I was learning on the job, this was not what I am qualified to do,” says Raghu Rao.
Arun Rao reiterates the huge risks involved. “Tangerine was a huge risk. We in fact sold our flat and invested it in the business, but, whatever the outcome; there was no turning back for us.” Both he and his wife Manju were committed to Tangerine, they supervised every aspect of the restaurant from the menu to the theme to the staff and service offering.
What held them in good stead was garnering an understanding of the business they were venturing into. Entering any business that is unfamiliar requires a lot of research, there is a need to study the market, the trends, what is missing and if the proposed venture can address the gap.
“We knew we wanted to have a restaurant that served continental food that suited the local palate. We dug around and found out that although there were places offering continental food, there were hardly any takers. So we knew we had to put something out there that people wanted and needed. Nouveau continental is what we offer, it is continental food, but, fine-tuned to make our consumers happy,” says Arun Rao.
Bettering the recipe
Going by the crowds Tangerine draws, the concept has obviously worked, but, the husband and wife team decided to not rest on the laurels. They make a constant effort to try and push the boundaries. Tangerine, besides serving top-notch food, also places importance on ambience. It places emphasis on the music and retro is the genre it sticks to. It has also introduced some novel dining concepts to the city, like getting a live band to play once a month and their promotion of budding artists in the restaurant. Each month sees the restaurant walls display works of a chosen local artist.
Similarly Raghu Rao wanted something to draw everyone in, even those without a sweet tooth. “The priority is the gelatos, when we started we realised that most people cannot differentiate between gelatos and ice creams. Our unique selling proposition is that our gelatos are fresh; they are made daily, 100 per cent vegetarian and 94 per cent fat-free. We also have pastas and cakes but this is secondary, to have something to offer everyone.”
With numerous eateries mushrooming across Chennai, it is clear that the city is working up an appetite. Those restaurants with novel offerings who sustain their consumer loyalty through their quality upkeep are those that get ahead. And when such initiatives come from individuals who possess no background in the industry, it is indeed commendable.
Starting up your own restaurant
- Differentiate from day one
- Work on a business plan with realistic financials
- Location, the key
- Hiring strategy
- Branding and understanding your target market
- Managing your supply chain