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How to make profits through a Vegetarian South Indian Restaurant

South Indian dishes like idli and dosa are today national dishes that one can find even in remote parts of India. Yet the tact of running a successful restaurant with a vegetarian South Indian menu is not understood by many entrepreneurs. For budding entrepreneurs and also those already in the business, here are some imperatives.


With some minor differences, the Vegetarian South Indian menu across all the five states of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh and Telengana is deceptively similar. The Udupi restaurants from Karnataka is a national phenomenon. Yet in recent years there has been some metamorphosis in this business. These realities have to be appreciated to run a profit-making business. In this article, the focus is on a)identify the target audience and right location b) understand competition c) build unique competencies d) constantly innovate and e) be always consistent in every aspect of business.

Identify target audience and right location

This is very important. The location should always be near the bus station or the railway station. The logic? It is only here that you will find the massive floating population. Till your brand name is established and your unique identities are well established, it is vital to know the target population. Questions such as "who will be the regular customers?" and "how many of them" are as important as the location itself. The floating population also needs to be clearly understood.

For example, imagine your restaurant is one kilometer away from the bus station. If you are budding entrepreneur, there is every likelihood of most customers flocking to the nearest South Indian restaurant, even if their quality is not okay. So, even if you start in a small way, it should always be very near the place where hundreds of thousands of people come and go. You can always scale up.

Understand competition

Even when you understand all the competition, it is vital that you always give a) what the other fellow does not give and b) serve it with a smiling face. Here the behavior of your staff is vital. Any show of anger or even a single harsh word spoken will bring you bad reputation, even if the customer is a transit customer.

The logic is simple. There are simple realities. If that guy does not offer the Rava dosa in the morning, you give it. If he does not give the dosa with a golden color, you better give it. Understand the process thoroughly. Once you get the chemistry right, the rest will follow. Never offer the full meal in the nights, are there are no takers. Here are some towns in Tamil Nadu, where there is a huge potential for even small, but high quality restaurants, very near the Bus station and/or Railway Station. They are Kanchipuram, Tiruvannamalai, Vellore, Erode, Salem, Tirunelveli and Karur. Of course there are several other towns, but these are towns with huge gaps in terms of what is needed and what is currently available. Of course, I do not know much about other cities but Tirupathi, both in the plains and atop the hill, is a big market waiting to be tapped.

Build Unique competencies

Whatever be the price, there is always a growing demand in the metros and big cities, with huge people and deep pockets, for high quality South Indian dishes. Here are some examples.

Customers are ready to pay any amount to drink the unique sambar at Saravana Bhavan. Thousands simply lap up the huge "paper dosa". It needs to be noted that this is an International Brand, with a huge growing base of customers in India and elsewhere. Similarly, the idlis soaked in chilli powder and retailing at around Rs.25 a piece are a huge hit in an upper middle class restaurant called "Murugan Idli shop". These are some examples of superb competencies.

Want to enjoy dosa with a deep golden color, with ghee floating on it? Go over to the Partha Vilas Hotel near the temple at Tiruvanaikoil, Srirangam, Tiruchirapalli. They have a kitchen where the dosa is prepared on a stove with the heat generated from wood. You need to understand from such examples. The consistency is something that needs to be understood.

Saravana Bhavan has standardized all its processes through what is commonly called as "Total Quality Management". This is the secret. Ditto for a huge chain called the Annapoorna and Gowrishankar group of hotels, Coimbatore. There are hotels that offer huge variety.

If you are a budding entrepreneur, be prepared to live with low profit margins. Never compromise on quality. Never ever use reheated oil at all. If you can afford it, in the rear portion of your hotel, put up the traditional stove set up where you can cook with wood. Please do note that it works.

Remember, contrary to popular perception, the best cooks can only be found in the interior villages of any State. Go and check with those who cook so well and they will be either sixty or seventy years of age. Though you cannot hire them, hire some poorer but deserving cooks and bring them in. Give them good salaries and decent accommodation. Cover them through the medical insurance scheme.

Standardize your processes and offer great variety. This will build on your name and bring you repeat customers.

Constantly Innovate

Customers look for variety. They look for quality. If the prices are somewhat reasonable, you can mint money. For example, there are many hotels offering a vada made out of banana flower, sago, cabbage, spinach and bajji made out of brinjal, carrot and potato. If you go on offering such items at Rs.9 apiece, if you are budding entrepreneur, you can still laugh all the way to the bank. Announce your good intentions. That you do not use ajinomoto or reheated oil. Use only sunflower oil or the gingely oil.

Another secret which I have advised many as an entrepreneur. Everyday, prepare sambar, a vital side dish, in all South Indian restaurants with small onion, even if it costs Rs. 100 per kg. It now retails only at Rs.40 a kg or less. Never ever compromise.

When you innovate, people will flock to you. Do you know that some seventy varieties of dosa are offered at some places in Chennai? Source the youtube to look for details. Dosa made out of organic ingredients are now a big craze everywhere in South India. Try to offer the Ragi dosa, the millet dosa and so on. When you constantly innovate, you can always win.

Be consistent in every aspect of business

I was stumped to eat the same quality masala dosa at Saravana Bhavan at Dubai with exactly the same taste as what I had at T. Nagar at Chennai. They are an international brand for good reason. The standardization and consistency in quality is simply world class. Their turnover of Rs.1300 crores ( estimated from trade sources) is growing every single day.

You can also reach there. All that you need to do is to learn from success stories. The so-called "masters", that is, the cooks are your real strength. When you start a business, you will not make profits from day one. But South Indian dishes are huge volume, low profit businesses for a start. Once you scale up, you can increase business.

However the very huge volumes are always available for low cost competitors. This is exactly why there are so many competitors to the likes of Saravana Bhavan and the Sangeetha Chain, which are very highly priced restaurants of South India, not only in Chennai but in every location. The huge variety offered in some smaller hotels is just breadth taking. There are nimble footed competitors everywhere.

The key is consistency. Everything works through word of mouth. If you offer good quality at fairly reasonable prices, you will always be seen as alternate destinations for the best-in-class in every single town, anywhere.

Is it possible to set up these in North Indian cities like say, Ranchi, or Indore or Ahmedabad? The answer is a resounding yes. There is a huge gap I have identified at Tirupathi. May be there could be other bigger gaps everywhere. The secret of success is simple. Reasonable prices, greater variety and the uncompromising quality of all offerings. Never compromise on basics.

Take off in this superb business!! All the very best.

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Author: Reena Upadhya06 Sep 2018 Member Level: Diamond   Points : 7

One easy way to earn profit through a Vegetarian South Indian restaurant is to offer takeouts to the customers. Takeouts are referred to as parcels in our day to day language. This kind of service is common. It prevents blocking up of table space. During the busy hours, customers get to sit on the tables and enjoy the food and those who want to take their food to their homes should be offered takeouts. Many people don't prefer to sit and dine. They are in hurry and if your restaurant is located near bus stand or railway station most of the customers will be the travellers who are in hurry. They quickly want to grab the meal and eat it while travelling. Make sure to keep everything ready to cater to the specific needs of such customers. The takeout food should be carefully packed so that customers can enjoy your packed food as per their convenience. What can be a better way to earn revenue than to offer effective take-out service at your restaurant?

You know the saying that customers are always right. If you want to generate good revenue in the restaurant business you need to know that customer contentment should be your top priority. South Indian vegetarian restaurants are the favourites and attract a huge number of people. Most of them might be travellers and might be visiting your restaurant for the first time, it does not mean that you don't have to leave a lasting impression on them. If they feel satisfied, they will spread the word of appreciation to everyone around them. Words spread fast and thus whether the customer is regular or just a one-time visitor, make sure to prioritise them over everything.

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