Chulha

A Case Discussion

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Context• Typical situation you will face in your campus• Students have an idea and eitherA) feel strongly about it but don’t know how to go about it

ORB) have already done some research work and come to you to vet the idea

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Words of Caution for students

• If you are fundamentally in a lousy business, you will not get very far irrespective of the efforts and the talent.

• No matter how talented you are and how much capital you have, if you have not given your idea a rigorous, critical examination before starting out, you could be heading for a disaster.

• When you buy a car, you take it for a test ride. Why not do the same for your idea?

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The Case

Chulha is a case of two techies who recognized an opportunity in a problem faced by themselves – unappetizing canteen food.

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Is Chulha a viable business?

Based on the opportunity evaluation framework you have been introduced to and with the help of the checklist, evaluate if Chulha is a viable business.

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Case Analysis

• Market– Have the customers been clearly identified?– Is there a definite customer problem being solved?– Will the customers avail this tiffin service at this price?– Is the size of the target market substantial?– Is there enough potential for growth?

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Case Analysis

• Industry– Are you able to understand how this product is going

to be delivered to target customers?– Are there substitutes for this product?– Is there anyone else already doing it?– Will it be difficult for others to replicate this business?– Does the business employ superior organisational

processes, capabilities or resources that others would have difficulty in duplicating or imitating?

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Industry StatisticsFood products are the biggest consumption category in India, with spending on food accounting for nearly 21% of GDP and 31% share of the consumer’s walletIndia’s food industry is estimated at over USD182 billion, accounting for about two-thirds of the total retail sectorCAGR of 6.4% from 2004-08Expected to reach $300 billion by 2015Largely unorganised industry

[Source: India Food Report 2008]

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Case Analysis

• Team– Do the entrepreneurs have the skills to execute the

idea?– Do they have a network that can benefit the business?

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Case Analysis

• Risk and Reward– Is it a highly risky business proposition?– Is the business profitable?

Substantiate with calculations.

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Did you do your Math?

Assumed monthly income for an IT professional 20000

x 2 persons 40000

Veg Non-veg Total

Selling price of tiffin 35 45 80

Cost price of tiffin 15 20 35

Profit per tiffin set 20 25 45

Assuming 50 sets each of veg and non-veg sold per day (Total 100 sets)

Total profit per day 2250

Total profit per month (22 days) 49500

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Chulha is a real business www.chulha.co.in

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Where is Chulha today?

Started in April 2007They have now expanded their operations, servicing more than 15 locations in Bangalore.They offer full Tiffin's as well as mini Tiffin's (both vegetarian and non-vegetarian), providing a non-standardised menu of variety of cuisines.They cater to corporate, PG accommodations, individual customers and private parties.

Delivering Mouth-watering & Healthy Food to people in need of the same

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Key Learning's

Asking the right questions while evaluating the opportunityAssessing the three main domains Market, Industry, Team Quick back of the envelope calculation.

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NEN Resources

All materials used in this session are available in the NEN CD Kick-Starting the Entrepreneurial Campus under

Inside the Classroom – section “Entrepreneurship Concepts”,

subsection “How to evaluate opportunities”