Entrepreneurship takes wings when ideas become much more than just passion. Read on to find out how an idea clicked into a full-fledged business option in hospitality
Entrepreneurship often is a result of an individual’s passion for giving life to a dream. It could take birth anytime and anywhere and
can become successful as long as you get your timing right. While the first phase of entrepreneurship is all about living your passion, the second leg or phase is all about getting it right strategically. This is a defining phase for the enterprise and the entrepreneur's leadership leadership skills are put to test. How does one transform an individual entity into an enterprise? Many things go into it but the primary requisite is the entrepreneur’s ability to think big. It would make it more interesting if I tell you one such story....
The CEO of Compact Hometel, Suresh Tota, started his entrepreneurship journey in a small way like many. What triggered his business idea was the thought of cost saving. As a software professional, Suresh had to travel to many tier I and tier II cities but what pained him most was his accommodation bills. In the early 90’s, for a person with a monthly pay packet of Rs.3,500, the travel bill on a weekly basis was even higher. The cost conscious Suresh wanted to do something about it, “I felt it was a crime to pay a daily rent of Rs.500-600 per day and what was worse was the lack of choice. Either we had star hotels or very ordinary hotels,” recalls Suresh. He decided to do something about it. His thinking was, why not make the company pay the same money to him? He came out with the concept of serviced apartments.
Serviced apartment was an unknown or lesser known concept during those days. Suresh took a loan and built a house with 12 rooms in a prime location in Bangalore and offered it to his own employer. To be successful, all he had to do was tell a couple of MNCs about the facility and business started flowing in.
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Suresh Tota You have to think like a large company as you get older in the business. Only then growth will take place. |
When a business idea attains success intially, you can be sure that competition is round the corner. Either you have to scale up your enterprise to the next level and turn innovative to keep the ball rolling; else success will be short-lived. It was the same case with Suresh too. The acceptance of the concept itself posed a challenge as good demand meant shortage of rooms and these in turn meant clients’ requests for rooms being turned down more often than not. Clients began to look elsewhere. Suresh recalls, “All of a sudden, business fell by as much as 40 percent and when I approached my clients, they told me that they began to look at other options as I didn’t have rooms to offer when they needed.” I realized that I had to change my business model. Rather than creating a property and waiting for my clients to use them, I decided to offer what they needed. I started looking at multi properties and scaled up continuously by setting up facilities in different locations," he adds.
The expansion has been continuous with the room strength for the serviced apartment increasing at a rapid pace. If the first landmark of 100 rooms was achieved in 2001 after a good five years, he has taken only nine years to push it up to 1000. Suresh is looking forward to reaching a milestone by the end of the current calendar year. But the interesting story has been the shift in the strategy at regular intervals.
While he started off the business by constructing a property for meeting the business needs, the strategy was different during the second phase. During the mid 90’s, Suresh entered into an agreement with various property owners who let out their property for serviced apartments. As the business began to expand in line with the customers’ growth, Suresh realized that he needed larger manpower which was trustworthy. As he points out, in the hospitality business customer’s interaction is with the staff at the ground and not with the CEO. Hence, keeping the employee happy and committed is a challenging task. Of course, not to mention the fact that keeping 600 odd employees is more challenging than humoring 10-12 people.
Needless to say, the transformation has to be within and from outside. While it is all about creating a good revenue model for an entrepreneur with his dream idea in the early days, building the enterprise requires creation of process, inculcating value system amongst the employees, a good HR policy for the workforce and more importantly, a strong cashflow management for sustaining growth.
After a decade, Suresh, like many entrepreneurs, is bracing up for the next leg of transformation of his business. As he points out, the business in itself has been divided into three verticals with a senior manager handling a vertical. The tie-ups with property owners are no more ad-hoc and instead there is a written policy for every deal. In fact, a property developer or owner has multiple options to choose from for revenue sharing. On the HR front, employees go through rigorous training and more importantly they have the option of becoming partners through their contribution in property acquisition.
Ask Suresh about the strategy for transformation from entrepreneurship to enterprise, his answer is simple. “You have to think like a large company as you get older in the business. Only then growth will take place.” He is also a firm believer in outsourcing as according to him that is the only tool for effective time management. His word of advice for all entrepreneurs is delegation and more delegation.
Srikala Bhashyam
Srikala Bhashyam is an investment consultant and runs her own consulting firm in Bangalore. She has been a regular columnist for the print and internet media on personal finance.
To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Srikala Bhashyam'.
Disclaimer: The views expressed here are that of the author and do not represent the magazine's.
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