Strategy
Business model of Chayoos is not sustainable
Chaayos has not made profit since it started in 2012. The costs of running tea cafes outweigh the revenues. Venture capitalists are shying away from investing in new retail store businesses.
Forbes reported that its losses are under control. Its losses have jumped from INR 24.5cr in FY19 to INR 35.5cr in FY20. That’s a 50% jumped loss. It’s revenue grew from INR 70.1cr to INR 102.6cr. For every 100 rupees it earns, it has to spend INR 130. Till date it has raised INR 300cr.
As per Forbes: “The recipe to make tea varies every few kilometres,” says KS Narayanan, food and beverage expert. There are more challenges to contend with:Lower unit value per consumer as compared to coffee; and need for more transactions per day to stay in the business.”
Food business owners should learn from Ari WeiWeinzweig. He runs a community of businesses from a coffee roaster to a sandwich shop to a restaurant. The businesses employ about 500 employees. He suggests ’12 natural laws of business’ to all small business owners.
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