Away from the corporate jargon, swanky plush offices, suited up people walking back and forth, laptops buzzing with presentations, the serene state of Tamil Nadu houses lots of businesses that have been developed by first generation entrepreneurs. These business do not have the monthly review meetings filled with power point slides, neither do they have flow charts or graphs. But these are the ones aggressively developing, charging ahead with their expansion. Some have their camps at USA and UK too.
Not many around the world would have heard of these companies. There are quite a few, but I would like to talk about the 2 distinct ones, that have touched the billion rupees in turn over. One is a restaurant chain and other is a retail store – Hotel Saravana Bhavan and Saravana Stores. I must point out that, they are not held by the same parent firm. They are two different firms which happen to have the same name, and sustain next to each other without fighting over it.
Both these firms, started off small. The parents of the owners were not entrepreneurs, and they started with a low capital. Knowingly or unknowingly, they found their market very fast. Like all hoping-to-be-entrepreneurs try, they found the need and served the need quite well.
Saravana stores – They are a retail chain, Walmart sort of. From pin to an elephant, you could purchase almost everything that your house might need. Groceries, dress, kitchen ware and the list goes on. However the catch was this. With the volumes they sold, they were able to surprisingly bring their costs low. They did not invest in ambiance or marketing. But for the TV ads, and fliers, Saravana Stores did not go around spending so much. By this, they were able to sustain the costs and provide quality goods at low prices. There is one more thing to note. They did not sell Hettich or high priced products. The ones they sold were extremely cheap themselves. What this really did was this – attracted the below-average income group. This sky rocketed them to newer heights. Sans six-sigma or anything, this retail chain has managed to keep costs low, quality high.
You can find them here –
www.saravanastores.net/tnagar/english/index.html
So much did they expand that, they own almost an entire street full of shops. 🙂
Next we go to Hotel Saravana Bhavan (H.S.B) – This is a chain of restaurants which serve vegetarian south Indian food. Starting from one hotel near Ashok Nagar in Chennai, they have around 25+ hotels around Chennai, and a couple of them in USA, some in UK, Canada, and the middle east too.
So what was H.S.B’s USP? – On incessant eating in this joint for about 15 years now, this is what I gather. Their USP is multi fold.
1) First, they gathered the customer base by serving delicious south Indian food. But the real thing was, they were really consistent about it. Unlike McD or KFC, this restaurant does not have a scientific protocol or a measure recipe to make their dishes. They are made usually by chefs in a normal kitchen like the ones in your houses, except it is a bit bigger. H.S.B does not have machine made food, and the structure of south Indian cuisine will make it hard to prepare the food in machines. This gives rise to two challenges – How do you avoid chef attrition? How do you expand?
2) They differed from the other hotels by offering this best customer experience. This can be categorized into three attributes – cleanliness, serving speed and courteous behavior. Impeccable tables and foods that reach you in matter of minutes. You should note that, back then and still to a large extent today, the food served by other south Indian hotels can not match HSB’s speed or hygiene. I really dont know why that is the case!
Over the past 15 years of my experience, the color or texture or taste of the chutney or sambhar they serve has not changed a bit. And this consistency was not maintained by electronic machines, but humans! They owners were not engineers or business graduates. However, they rose to an unimaginable extent.
What is more? None of these above businesses, have a strong online presence. They do not invest into aggressive marketing. Seldom you can see these names on a news paper or TV shows. Yet, people flock in millions to their shops, and their per day turn over reaches millions of rupees.
I do not wish to make this a rags to riches kind of tale. But what startled me most was this. These people with absolutely no background in management or business or engineering have raised an empire. Without any corporate structure, these have sustained over more than a decade and served with consistent quality. What was their secret? Were they just lucky that they were the first entrant or found the market by stroke of luck? Perhaps, but surely the luck would not help them survive more than a decade or help them expand over the world.
What you need to focus is on the customer, not on how corporate you are. The feeling though is good to be suited up, but here are the heroes of India who roamed in veshtis and earned the titles of Business tycoons of South India.
Design around you 
Nice one.
A very good article!
Awesome article. A breath of fresh air from the normal business insight.
Good work =)
At the risk of sounding a tad cliched, necessity is the mother of all inventions & patience is the mother of all virtues. Together they are Indian & Invincible.
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Awesome post! I am from Chennai, and I can totally relate.
Yep! Chennai has lots of such stuff. It has been around. Sometimes the delay in getting your food makes you think of such stuff!
What are the corporate tax amounts in India? What is the average commercial rent for a shop premises? Wages are of course cheap. These are the biggest costs for a business and India has them super cheap. That is why its easy to be a succesful entrepreneur in India right now.
Hey Andrew, The taxes and rents are cheaper when compared to other countries. However, the bureaucratic nature of system hampers entrepreneurship in India. The red-tapism and corruption leaves a bitter taste on young entrepreneurs which diverts their focus from business operations to getting the legalities done.
the answer to your question is, the Indian “Family Pride system” , unlike in america or even in Upstreet Delhi, in certain food chains, families tend to be in the same business for years, the quality is sustained due to years of years of repititive acceptance of the fact, that son (mostly) needs to maintain the name of the business his father has created, though many of these successor are educated enough to earn a middle class income, they tend to emerge themselves into the family business. The ‘I don’t want to be my dad’ thing from movie Inception, doesn’t exist here.
I know a south Indian restuarant in Delhi, though it does not have a big turnover as mentioned above, but for the past 12-15 years that I have been visiting that place, the sambhar has not lost its touch, the food is hygenic, the speed is above normal, and the taste.. the prices.. it is a good business model they have here.
Such is the case of Sweet shops as well, one name synonymous in west as well is Bikaneri Sweets and Haldiram .. who until a decade ago, were hardly having just 1 shop, and today are multi-million business, though the prices have increased, and the quality has INsignificantly dropped, the variety they bring to the snacks business is tremendous, we cannot imagine snacks with tea, without these two.. biscuits are not as popular in India, as these ‘Namkeens’ are 🙂
Very nice observation Rika! The same is the case with a lot of firms here. The business passes along the family. So much that it is called the family business! It may be a restricting tradition in terms of freedom for the younger ones, but it ensures sustenance of business and quality.
Indians are really consistent – anywhere they go, they still smell bad.
A really awesome read. Nice way of putting things.
“people with absolutely no background in management or business or engineering have raised an empire” – Why is that remarkable?. In fact, throughout history that’s exactly the kind of people who have raised empires, commercial or otherwise !! . Medicis of Italy or Chettinad merchants of Tamil nadu?. Degrees – management or engineering – are a very recent requirement in business.
Hey gokul! The corporate attitude gives a whole structure to the business. I do not mean to do away with that structure. While it has lots of benefits, I only intend to show that people have achieved success without such knowledge. And without knowledge in management, it is quite harder to maintain and expand a business, which these people have shown!
the serene state of Tamil Nadu … a good joke
Brilliant! Thanks for writing this.
I guess one thing that these guys figured out way earlier is ‘Common Sense’. The Common Sense of doing what they love to do, passionately and consistently. As an entrepreneur myself, I firmly believe that a good product or service will always find takers, no matter how bleak the circumstances or the environment.
Exactly Bhavesh! That is the whole theme that I was trying to point out. Btw, what is your startup about?
Great article, man. True, what you say.
One key point – there is a huge market for high quality ‘traditional Indian Food’ which is still not completely served if you ask me. You have the KFCs and McDs for the western food. So even now, if anyone starts a high quality Indian/vegetarian food chain it would make good profits. Same is the case with Saravana Stores – there is still a huge untapped market for ‘one-stop shop for cheap products’ – anybody with this model in India would survive. Its all about understanding the Indian market – demographics and psychographics.
Hey Raghav! That is the entire theme of this. Probably these guys were at the right place at the right time. But it is amazing that these fellas found the niche and served that market quite well consistently. But as such, the Quick Service Restaurants business in India is quite fertile!
Awesome one da! I liked it all! Btw, what made you write on this one?
One thing we need to admit is they have neither had the business education nor angel investor. But they had experience which they learned from their mistakes to become phenomenally successful. Also we can’t not say them unstructured. They have been very well structured in terms of their supply chain and also in staffing with structured hierarchy. When you see HSB, you can find people with different colored uniforms. Importantly they have managed to keep some guys for quite longer terms which have been their biggest strength.