Successful professionals are giving up their jobs to set up restaurants. Anoothi Vishal meets some of them.
Any survey of “dream jobs” will likely throw up “owning a restaurant” as a top pick. Of course, few of the foodie-dreamers really appreciate how fickle or tough the business is. And in most cases the dream remains just that. Yet today, middle India’s growing appetite for risk means that more people are now ready to turn restaurateurs.
An increasing number of professionals with an interest in food — investment bankers, software engineers, pilots, architects and even the odd journalist — are chucking well-paying jobs to risk restaurant start-ups. Mostly, they have strong opinions on food but no background in hospitality. Delhi-based restaurateur Sudha Kukreja notes: “Every year, I get 10 to 15 young people who want to start their own restaurants. Sometimes, these are IIT and IIM graduates earning fancy salaries.” Kukreja puts these novices through the paces at her restaurants — sometimes for a couple of months (unpaid, of course) — so that they can look at the business in detail and decide whether they like it enough.
Many chicken out, but there are many, such as one IIT graduate, who do not give up. “He worked eight months in the kitchen learning various cuisines because he didn’t want to depend on a chef when he started his restaurant. And I have to give it to him, he was the first one in and last one out on most days,” says Kukreja.
At Café Diva, chef-restaurateur Ritu Dalmia is similarly mentoring three women so they can open their own restaurants “one day soon”. Ayesha is a former software professional who left a “boring job” after a chance meeting with Dalmia and doesn’t regret the long hours she is putting in managing the cafe. Annapurna, a young architect from Bangalore, is happy being one of the service staff and learning from scratch. There is also former banker Neera Kehr (industrialist Analjit Singh’s daughter-in-law) who is here simply to meet Dalmia for advice. But is setting up a restaurant, when the failure rate is about 60 per cent (few conclusive studies have been carried out though), advisable?
According to a white paper put together by consulting firm Technopak, “the restaurant industry is one of Indian economy’s best-kept secrets.” Current revenues are pegged at Rs 43,000 crore, with 5-6 per cent growth per annum. Within this, the organised segment is estimated at Rs 7,000-8,500 crore, and growing 20-25 per cent per annum. With eating out becoming one of Indians’ three most popular leisure activities, according to the Indian Leisure and Entertainment Report 2008-9 (Knowledge Company), the restaurant industry is clearly witnessing a boom. Young Indian professionals perhaps recognise that.
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Thirty-something Gaurav Rekhi, who aspires to create a portfolio of restaurant brands, says confidently: “They used to say it for show biz but there is no business like F&B (food and beverages).” He should know. Rekhi opened FU, a “better than Chinese” (it serves pan-Asian street food) restaurant in Delhi late last year. Working for Goldman Sachs in New York and later London, Rekhi says he was exposed to diverse cuisines and formats which he wanted to replicate in India. Having moved back to India a year-and-a-half ago, he believes Indians have begun to experiment with food. “Delhi is five years behind London which is five years behind New York.”
Rekhi has the numbers all worked out. He tells you why a restaurant must break even in five or six months and how “at about 3 per cent return on your investment per month after the first two years, this business makes a lot of sense”. He is rightly cautious: “This [the money he’s investing] is what I earned myself. I don’t want to lose it.”
Kukreja reckons a full-service high-street restaurant in Delhi can cost up to Rs 50 lakh. Eighteen to 30 per cent of the earnings go on food, 20 to 30 per cent on rent, 10 per cent on salaries and 5 to 6 per cent on disposables and breakages. Operating profits can thus range from 15 to 45 per cent.
Varun and Wasiqua Soni, 29 and 28, respectively, too have recently come back to India. They met while studying in the US and worked briefly there. Together, they discovered food in New York. Back in India, they decided to do “something in hospitality” with the money they had saved (the rest came from family). The initial idea was to open an eco-chic lodge/resort in Jim Corbett National Park. When that proved unviable, they got into a restaurant project with other friends. Circa 1193, with a heritage ambience and a view of the Qutab Minar, serves Asian-Western fusion. Ask the couple why a restaurant and they say: “Of course, it is a good business to be in; but it’s only when you do something that you truly like are you really successful.”
In Bangalore, Satish Bangalore knows all about that. Formerly managing director of Phoenix Global Solutions, a global technology-business solutions provider, Bangalore got into a hospitality venture when Phoenix was acquired by TCS in 2004. Last year, he set up Modak, a full service organic Indian restaurant — the first of its kind. This year he wants to develop the supply chains and after that, go pan-India.
In Pune, Akshata Pagnis dreams of building a chain of takeaways. Working with an insurance company in Dubai for the last couple of years, Pagnis travelled back home to study the market for her concept. She has some savings set aside and plans to be in Pune even as her husband continues to work in Dubai. Clearly, India is a better market for any investment after the bubble burst in Dubai and elsewhere.
In Delhi, Abhi Karan Singh Garewal, a young pilot by training, has also turned to the F&B business despite no prior experience. Ambarsari (set up with an interior designer cousin) serves Amritsari food. It is (‘slowly’) proving to be a satisfactory investment, says Garewal. Then there’s Romil Malik, Miss India finalist and former television journalist, who runs the Sidewok chain of pan-Asian eateries.
A new trend in the restaurant space in the last year has been the entry of private equity. While there is much optimism in the industry due to this, only well-established chains — rather than startups — have managed to attract it. However, most startups hope to reach that kind of a critical mass soon. Most people who set up restaurants think in terms of chains/replicable models than can bring in the money later. However, prohibitive real estate prices remain a challenge. Despite the fact that most restaurants are set up on rented premises, rents too can dent the balance sheet. Nevertheless, the new restaurateurs think they have the numbers worked out.
Dishing out their best to the now-discerning middle class, they hope to taste success.
