‘Once there is traction in the business, there are a lot of venture capitalists and angel investors to take it forward.’
Simrandeep S Parmar, an experienced software engineer, left his job to do a Post Graduate Programme in Management (PGPM) at ISB. He took the path of entrepreneurship and founded Employee Street in May 2011 after the completion of the course. The company offers discount coupons for 100 restaurant outlets in the City.
Taking about entrepreneurship, Simrandeep said, “I wanted to do something on my own and take bigger challenges to create value to customers and restaurants. E-commerce is a growing industry and there is a lot of untapped potential. It is also not capital intensive and one doesnt need to invest heavily upfront to start the business. Once there is traction in the business, there are a lot of venture capitalists and angel investors to take it forward. Even, the experience that I gained in the technology sector is also quite close to the business idea.”
The business idea is about creating a link between the finest restaurants in the City and their customers.
“The customer does not want to go unknown restaurant simply because there is huge discount offer. He wants reasonable and standard offers at high quality restaurants where he goes regularly. If we see established food brands, they don’t have a problem in getting the visitors for the first time. There may be a problem in getting repeated customers. As we are not offering huge discounts, the customers they get are the target ones and these customers also help them to fill the left out inventory they have,” he says.
The restaurants also find it difficult to track the ROI on their huge marketing expenditure. However, with discounted strategy, the restaurant can know number of customers visiting it because of the discounts. The marketing of the restaurant happens by offering discount on the money spent by the customer.
“The customer can buy coupons or subscriptions in advance based on how frequently he visit restaurants. The customer can get the discount coupon just by sending an SMS. For instance, we charge Rs.75 for monthly subscription. A customer who spends a minimum of Rs.500 may get around Rs.75 discount (based on 15 per cent average discount) and all the spending he does more than Rs.500 will be savings for him. Any more visits to restaurants that month will be also be savings. We also offer individual coupons at Rs.25 and also at Rs.12.5 (in bulk purchase),” he said.
The five-employee company has invested around Rs.10-15 lakh in the business and has plans to expand to other cities.
Number of registered users: 10,000
Number of targetted users in less than a year: 1 lakh
Expected operational breakeven: 6-9 months
Discount Range: 10-25%