The business story from the Indore dosawala

The cool winter breeze has started to blow. Moist is in the air, and up the hummock where IIM Indore sits cozily, the weather is turning out to be cooler as every day passes. I and Jam went out to the city to the beauty parlour (well, euphemism apart, it was a hair dressing shop), had some snacks and, as we entered our campus and started climbing the hill, we clearly felt the chillness in the evening air. I'm told that Indore is known for its extremes, and that it might touch as low as 3 degrees in winter and 45 plus in summers. For a typical South Indian like me - hailing from more temperate places that is - this certainly isn't amusing. But all this is an experience, I'm told. Whatever!

We've also made it a weekly habit to visit a dosa shop some 10 kms from our institute. These days, dosas are really at a premium. Some of us would pay any amount to get a bite on a tasty bit of dosa. The dosa shop we are frequenting isn't a shop really. It's just one of those mobile fast food pushing carts you could spot on any Indian city. But don't underestimate it. What surprises us is the number of customers the shop manages to attract, despite not owning a place on its own. We could see Fords and Esteems waiting in queue for the dosas. One of the owner opted for this business after obtaining a B.com degree.

The unavoidable questions on our minds were: what's making the business so successful? What warrants the owners to leave jobs and travel hundreds of Kms to setup shop? Why don't the store owners upgrade the shop to a bigger one?

There are reasons behind every move made by the dosa shop owners.

What's the income made by the dosa shop wallas? When a group of us went to have dinner there, we spent an approximate 200 Rs and consumed some 20 mins of their time. They open the shop for 7 hours, and the demand is almost full everytime. At times, the demand even overflows. We calculated that the dosa selling at Rs 10 would cost a max of 5 rupees to prepare - considering that the owners were willing to give us a 40% percent discount since we hail from the same place as they were. That means a revenue of approx. 2100 per day - translating to abt 60K per month, evaluating the least possible figures. This would be shared by about 3 to 4 people - a far cry for people who would've otherwise earned much lesser. Additionally, it makes a lot of difference to work for oneself than for others.

Well, what attacts people to the shop? [In business terms, what's their USP/UMP?] I guess the 'Madrasi' tag is definitely a decisive factor. People around here would definitely be interested in eating dosas prepared by people who're from the place dosas originated. Secondly, the taste is good. That's definitely one reason we go there; and as Kotler says, we definitely increase the demand by word of mouth. When we asked why they didn't go for a shop upgrade, one of the shop owner mentioned that small mobile shops are the ones that attract mobile populace. He said that such shops are real 'hits' in North India, and that his relatives alone have covered places like Rajasthan, UP etc with similar dosa shops. True words, considering the fact that an estiblished regular shop nearby attracts hardly any customer even after selling similar tasting dosas at the same price.

The whole episode has been quite a learning for us. Foremost, down to earth people from a remote hamlet in Madurai showing such a lot of business sense has firmly instilled a lot of humility in us. Second, common business can be learned by such experiences in real life. McDonald's and Starbucks alone don't make miraculous success stories!