Six successful businesses which people will always buy or patronize


The world is undergoing a massive transformation. Globalization is slowing down. Voices of protectionism are emerging everywhere. A brilliant former Army Captain superbly summed up the so-called largely unorganized service sector as "India Uninc". There are the millions of small time businessmen who have been doing business in the most traditional way. This article focuses on such businesses and the more formal sector businesses that will always find a responsive market in India.

Introduction

These are days when very much stressed IT professionals are entering the Service Sector in growers. There are hundreds of entrepreneurs emerging everywhere. Hundreds of thousands of such people are employed in the ever growing service sector.

There are six types of businesses that will keep surviving any recession. They will be present in many formats. They may offer the customers a variety of experiences. But the crux of such businesses will be the same market, but different segments of it. The particular business will survive. There will be some crucial variables that need to be taken care of. But once these variables are taken care of, the business will survive. In different formats. The key will be one variable called pricing as the bulk of Indian customers who look for such products will only increase in the years to come.

Here are the six businesses. a) Quality vegetarian restaurants b) Low cost textile goods c) Petty shops d) Organic food products and specialized restaurants e) Specialized tuition Centers and f) Grooming business enterprises. There could be other businesses. But these are simply " People will always buy/patronize businesses".

Quality vegetarian restaurants

Contrary to public perception, people do not commonly consume meat for dinner or breakfast. Non-vegetarian restaurants get to do most of their business only during lunch time. For both breakfast and dinner, they mostly serve only vegetarian food. The pure vegetarian restaurants, more so, those near the bus stations or the railway stations, will always make money as the huge floating population will always seek only such restaurants for a quick breakfast or dinner. They will be guided by the local people and if a restaurant has a good reputation for quality, it will survive through word of mouth publicity of a very tall order.

For example, there is this vegetarian restaurant situated at a strategic location of approximately one hundred kilometres on the Chennai to Bangalore Highway. So, hundreds of thousands of customers who travel by bus or by car drop in at this restaurant called " Murugan Iddli Shop" have breakfast and then proceed. The hotel grows through word of mouth publicity. It's superb in what is called " chilli powder iddli" that is sold for Rs25 apiece. People do not mind the cost. This strategic location is not very far away from another competitor called "A2B" also known as Adayar Anandha Bhavan".

Now, look at who the customers are. An estimated 12000 cars ply between Chennai and Bangalore between 7am and 12 midnight. An equal number, if not more, ply between Bangalore and Chennai as well. Among this crowd are honeymoon couples, tourists from North India, with money in their hands who want to visit so many places in both cities by car and are well informed about hotels too, rich students from the neighbouring educational institutions, the Chartered Accountants who often travel to Bangalore and so on. This rich class can never ever become poor even in a recession like the post 2001 twin towers attack. So, people will positively spend anywhere between Rs.800 and Rs1200 for the ambiance and food. Consistency in taste, the variety and quality of the so-called side dishes are important variables.

The not so lucky middle class and the lower middle class people flock to the much smaller restaurants that one can find aplenty within a distance of just fifty meters or less from the Highway. It is segmentation, typical text bòok style. Everyone needs to eat when they travel and carrying food from home is not so much welcomed at all. The hotels pitch in to close the gap. The train passengers who get to board the passenger trains to Chennai, for example, have a quick bite in the numerous "mobile shops" near every possible big station. Arakkonam, Katpadi, Gudiyatham, Arcot and Walajah Road are big deal business centers where at least four lakh rupees would change hands within three hours. The scope for new entrants is so very big. Since the differentiators are quality and taste, the crowd flocks to the best ones. The other guys also get to make a profit, as the time of arrival of these office goers is also one vital factor that goes into choice of the outfit. The business is a perpetually profitable business, irrespective of whatever segment it caters to.

Low Cost textile goods

The city of Surat is said to be the Mecca of this trade. It is a fact of life that the wholesale market in this Gujarat city is home to some of the brightest minds in designs pertaining to textiles. The wholesale market is the 'kamadenu' that enables hundreds of thousands of small and medium trade textile traders to earn a decent living, across India. When even big retailers in Chennai can afford to sell three shirts for a ridiculous amount of Rs625, most of which are stitched through thousands of outfits in Surat, as one is given to understand, the volume game is there for the asking.

It is very simple. In every major metro and even B and C class towns and millions of villages surrounding the small towns, an estimated 25 crore adults, who earn nothing more than Rs 12000 to Rs16000 per month at 2019 prices, cannot afford the fancy garments sold at the branded outlets. They would simply lap up anything that is "use and throw" for them. This is precisely the same market that is also the bulk market millions of small, medium and big retailers in every small or big city or even the metro. For instance, T.Nagar which is one of India's richest commercial districts in Chennai, has an estimated fifty lakh people who buy textile goods from the numerous outfits there. The customers come by the EMU trains and the metro buses from distances as far away as one hundred kilometres. The smartest big retailers never allow any family to get out before spending at least three hours. They have the canteen in one of the upper floors where the men do happily eat. Their wives do their shopping and kids freak out in the special places where the children happily play. The sweet talking saleswomen pitch in too.

The game is on. Discount sales attract hundreds of thousands of customers. The city police have a big challenge in regulating traffic on the legendary Renganathan street, where most retailers are situated.
This business will survive any recession, as it is central to the basic" roti, kapda and makkan" equation of mankind. And India has the numbers. The segmentation can offer many a lesson to any MBA student from anywhere in the world.

Petty Shops

This is the real India. Petty shops offer very good self employment to at least fifty lakh people in India. Even this number is only approximate. This is a pan-India phenomenon and does offer superb conveniences. These are the shops that sell cooking oil lose and customers buy for just Rs50 at any point in time. The entire range of goods stocked comes from the unorganized sector and the supply chain management is very smartly done on either mopeds or bicycles. The range of goods is shocking.

The lower middle classes actually patronize these shops to enable these shopkeepers to survive. More often than not, the shopkeepers play many roles. They keep a big tag on strangers entering the nearby residential localities and inform those concerned. The poor who buy snacks here keep the unorganized sector growing from strength to strength. Recessions may come and go. But these petty shops will go on for ever. Those within a two hundred metre distance of major temples also have a grand gala time as many things needed for the temple Pooja is sold here. The temple economy grows from strength to strength.

Organic food products and specialized restaurants

This is also growing day after day. YouTube is a huge marketing tool. Mil lions have understood the value of a whole range of organic foods. The specialized restaurants that mostly serve an amazing variety of organic good that has superb medicinal properties is now the order of the day. It is the big "in-thing" . It is there in most cities of South India and it is just a matter of time before companies like ITC enter this market.

Branded outfits in cities like Coimbatore are laughing all the way to the bank. People want to eat outside. When something healthy is available, they lend to patronize this far better than ever before. The market is growing. This could become a Pan India phenomenon.

Specialized tuition centers

Tuition Centers abound. The IIT JEE and the NEET coaching Centers can be found in small towns with just 1.5 lakh population. Retired teachers with some good experience in the core subjects have entered this business. Recurring deposits have become so regular now. Even with a ten year span. Ask the parent and he would reply that the money would come in handy for his son or daughter, just to enable the child to join these tuition centers.

In Tamil Nadu, the craze to get one hundred percent in the core subjects of Physics, Mathmatics and Chemistry is so huge. The parents spend a huge amount of money to just ensure this. It is an irrational obsession, though. But it is not so for these tuition centers. Batches of even forty students, who pay as much as Rs600 for each subject are so common in cities like Coimbatore. The teachers drive around in the latest cars and happily take off to Singapore for a holiday with their families. In the years to come, such talented teachers might as well holiday, effortlessly, in Europe as well.

Grooming business centers

Gone are the days when grooming of the bride or bridegroom prior to the vital reception on day one, was done at homes. Today, the beauty parlors are booked heavily right from 1PM in the afternoon. The amounts that change hands are very huge. But who cares? Marriages will keep the Indian society going for hundreds of years. These grooming centers will keep growing too. There is absolutely no stopping this from exploding in the years to come.

This business has takers even from the lower middle classes. Talk about unemployment. Those who specialize in this business receive the best formal training and are very much gainfully employed.

Conclusion

We always need to understand the uniqueness of Indian markets. Even when real wages are falling, the markets that are recession-proof, will continue to thrive and keep growing from strength to strength. For entrepreneurs, these are the businesses to be in. Debts can be easily liquidated, as the cash flow will always be good. Positively contributing to a minimum of 6 percent growth in GDP, year on year.


Comments

Author: DR.N.V. Srinivasa Rao20 Feb 2019 Member Level: Platinum   Points : 9

A very good article by the author. He has given some good areas where we can get some returns on our investment and we can make some profits.
Small petty Kirana shops are on the rise these days. Even inside the colonies, small shops are being opened. They are purchasing goods from wholesale shops like D-mart where the rates are less and they are making good business. These days in many middle-class families, the purchasing of commodities are not being planned and done once in a month. So as and when required they will buy the item from the nearest shop. This is giving encouragement to the small vendors.
Another area where we can do some good business these days is the service sector. Many big companies are outsourcing many works for small companies. No big company is running the canteen on its own. They are giving it to people who are running the catering business outside. Like this many labor-oriented works are being offered on contract. If we can manage a small workforce with us we can take up those jobs also and we can do a good business.
Another business these days I am observing in Hyderabad and which is flourishing is Curry points and caterers. In the families where both wife and husband are employed and unmarried youth are trying to make rice in the house and get curries from outside. This attitude is making a chance for these curry points and caterers. In our area in Hyderabad, there are 5 to 6 curry points which are making good business.



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