Birth of an idea: When the first Yo! China restaurant opened in May 2003, it was sometimes shut for a few hours during the day. The reason? The restaurant would run out of food. "The response was phenomenal. We were stumped," says Ashish Kapur, managing director of Moods Hospitality which started the Chinese fast food chain.
Kapur was working with GE in the US as part of their global leadership programme when in 2002 the idea of starting his own enterprise struck him. "I really wanted to give entrepreneurship a try. Since I was young and well qualified, even if my venture failed, I could go back to a job. So I took the risk," he says. The instant success of his first restaurant was the result of a lot of planning and hard work.
First, of course, was being sure that being an entrepreneur was not a passing fancy. Then he had to zero in on the business he wanted to create. The Indian economy was booming and after exploring business opportunities in India (he even considered a low-fare airline), Kapur decided on a fast-food chain.
Ashish Kapur, 31
Last job: GE Capital, US
Last salary: $35,000 a year
Time spent as employee: 4 years
Age at starting business: 26 years
No. of years as entrepreneur: 5 years
Initial investment: Rs 70 lakh
Sources of fund: Angel investors
Company: Moods Hospitality
Turnover: Rs 50 crore (estimated for 2007-8)
No of employees: 600
Tips for starting a fast food chain• Research: Kapur spent months studying the restaurant business. It is important to know as much as you can
• Get better people: Kapur hired people who knew more than him about aspects of the business
• Don't compromise on quality: Cost cutting should happen everywhere. But Kapur made sure that the quality of the product did not suffer
Setting up: He struck gold in 2003. Three angel investors decided to pool in about Rs 70 lakh for the first restaurant and scale up as the chain grew. He also offered a stake in his company to a hospitality sector ace and a marketing professional from an airline company so that they could bring in their experience to his start-up.
From the beginning, Kapur bet heavily on getting the right people in his team. On a visit to a trendy Delhi pub, he was impressed by the way it was run and hired the manager-in-charge. Professionals were hired to design the decor, display kitchens, name of the chain and its tagline.
All through, the vision of a food chain was kept in mind-the design had to be simple, yet sophisticated, for it to be replicated across outlets and have an international feel. "We were aware that customers would be drawn not only to the food but also the ambience," says Kapur.
Finding the right chef turned out to be extremely difficult. Kapur sat through numerous kitchen tests till he found the one of his choice. About 40 people were hired for the first restaurant. The cost of equipment- sourced locally-was about Rs 10 lakh.
Dream start: The first Yo! China opened in Gurgaon in May 2003. Any memory of an early crisis? Kapur recalls: "We had invited 200 people for the trial run. About 600 turned up. Even Kapil Dev had to queue up for food."
To the promoters' delight, the situation repeated itself many times after they launched. Yo! China's first restaurant broke even in its first month. The second opened in December 2003. But not all restaurants were immediately successful. "In the beginning we would open an outlet in new malls. But that didn't necessarily result in footfalls. Now, we are more circumspect," says Kapur.
He and his partners study in detail the demographics of a neighbourhood before choosing a location. "The thinking behind such rigorous research is to be close to a catchment area. We don't want our regulars to drive for hours to find a Yo! China outlet. Instead we should be closer to them," he says.
With 20 restaurants (of which 11 are franchisees) in 12 cities, Kapur is still fine-tuning his strategy for expansion. "The requirements for scaling up are so different from starting a new restaurant. I've become an entrepreneur all over again," he says. He knows that retaining customer loyalty is difficult. But he hopes that a combination of good food and good experience will keep Yo! China a step ahead of the competition.