“A Study On

Mr. Beans the Coffee Lounge

and
The Entrepreneur
Mr. Abhimanyu Garha
and
Understanding the
Business Model of the Venture and
The Risk Associated with It”
By Anuj Tayal
P0116460
ENTREPRENEURSHIP
IN BUSINESS TODAY
Content Page

Executive Summary Page 3

1
 ANSWER 1 Page 4-5
ANSWER 2 Page 5-9
ANSWER 3 Page 9-10
ANSWER 4 Page 10-11
Conclusion Page 11
REFERENCE LIST Page 12
APPENDIX 1 Page 13

2 Page 14

And 3 Page 15

Executive Summary:

The report includes a brief talk about the entrepreneur Mr. Abhimanyu Garha his

venture Mr. Beans cafe lounge and how has he changed the coffee lounge concept

2
in India and focuses on the business model of the venture the risks associated with

the business are highlighted.

Answer 1.

An entrepreneur is ‘one who always searches for change, responds to it, and

exploits it as an opportunity’ words used by Mr. Drucker. Clearly states that in the

3
current market situation how a person looks for innovation and grabs the opportunity

that other businessman operating in the same field cannot identify and exploit the

opportunity. Entrepreneurs see change as the norm and consider it to be healthy.

Therefore entrepreneurs can also be defined as “shifting resources from low output

and relent to areas of high productivity”. Entrepreneurs have an approach that

forecasts the potential rather than the problems created by change (Drucker.F.P,

2007).

Schumpeter argued that the essence of entrepreneurial activity lay in the creation of

“new combinations” that disrupted the competitive equilibrium of existing markets,

products, processes and organizations. He mainly focused on innovation and spoke

about having a creative edge to overcome competition and raise the bars for the

players operating in the market. (Murphy,P.J 2009).

The idea of the coffee lounge to Mr.Garha came when he was studying in Europe.

He came to Indore and applied for Barista and Cafe Coffee Day franchisees, but was

rejected because Indore at that time was not the market the bigger players were

looking for, and hence Mr. Beans came into what it is today.

Mr. Garha can be said to be following the quoted words of Mr. Drucker unknowingly

as he looked for an opportunity i.e.; cafe lounge which was at its infancy in India in

the year 2002 and exploited the opportunity by opening it in India with a new feature

added to the cafe lounge known as sheesha and hence tried to create a change in

the working environment of the market that was only of coffee and thus have

become a successful entrepreneur. (Bragg et al, 2010)

During the setup he faced a lot of problems like he had no mentor to guide him and

did have the technical knowhow as well did not have any concept of what the place

4
will look like and totally believed on his intuition to setup the business. (Bragg et al,

2010)

As per the conversation dated on feb.1/2010 Mr. Garha said that Society has helped

the entrepreneur a lot in a way that the families that come to his lounges reflect the

entrepreneurs venture and the person himself, like the Royal Family of Jaipur are the

regular visitor of the lounge that is present there. This reflects the niche that the

entrepreneur has setup for himself and the venture also. He believes that people of

the society are the ones who shape the product/the venture. The venture reflects the

personality of the entrepreneur, and the venture has created that niche for itself as a

high class coffee lounge.

He has helped the society in many ways such as he has tried to bring in new

concept to the city, introduced us with terms such as sheesha. He is associated with

CRY, an NGO for children welfare and also many other NGO’s in the locality. The

entrepreneur has given the society a platform to explore anything they wish to and is

successful to certain extent as said by him during the meeting held on Feb. 1. /2011

Answer 2.

A business model describes a company’s operations which include everything such

as components, functions and processes of the enterprise, which results in the cost

for the company and value for the end users. A business model can said to be the

heart of the business because without this a business cannot function.

The business model used by the researcher is known as Business Excellence Model

(BEM) also known as European Foundation for Quality Management Model (EFQM)

which focuses on two aspects which are:

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1. Enablers which are measurable indicators of working style inside the

organisation and that can lead to business success and

2. Results which are measurable indicators of business success. These are not

simply measured in terms of money gain but also on employee and customer

satisfaction. (Bessant ,J.,2011)

The former include

a) Leadership Management – the behaviour and the involvement of the senior

management towards the business culture and its growth is huge in Mr.

Beans as in just 8 years they are able to open their stores in seven different

cities and are successful (Appendix 1).

b) Policy and strategy: the management is very successful in framing policies

and strategies and implementing as we have seen that they are able to fulfil

are the regulatory factors and thus no police raids have taken place on any of

their outlet. Strategies like they have an agreement with the coffee blending

company so they cannot blend coffee for others and hence try to have a

competitive edge and are successful in implementing this strategy

(Appendix 1).

c) People management – this part tells about the people working in the

organisation and people working in Mr. Beans are very efficient, it can be said

because cross check is done on timely basis on telephone by the senior

management by randomly asking recopies of the products and the close

relatives of Mr. Garha unknown to the workers go and check the work and

inform the senior management if improvements are needed (Appendix 1).

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 d) Resource management: the organisation manages its resources very

effectively and efficiently. The new technology is used effectively and the

skilled workers get use to new technology very easily. The security risk in

terms of health as they serve beverages and snacks is strictly followed as the

ambience and the aura is very healthy in the lounge and the snacks served

are fresh and coffee is made as per the order at the time only (Appendix 1).

e) Processes resources: this is the part where management identifies, manages

reviews and improves the processes as the time passes on. The machinery is

modified and changed as and when the time needs it and all the sheesha’s

are brought from abroad. The coffee beans that are used are specially

blended for the lounge and no other lounge can have such type of coffee

beans produced from the company as they have a contract made. The

entrepreneur is in talks with SAP, a world leader in developing software for

ventures so they can function better (Appendix 1).

The later include:

a) Customer satisfaction: Mr. Beans mostly has its customer base which comes

at least twice or thrice in a week which shows that customer satisfaction is

very strong as they work according to the customer needs and try to provide

what the customer needs (Appendix 1).

b) People Satisfaction: It includes mainly the employee satisfaction and can be

measured from checking employee absenteeism, job pride, staff turnover and

remuneration and incentives. People’s satisfaction in Mr. Beans is strong as

said by him that one employee joined him with a salary of Rs. 1200 and now

earns 25000 Rs. which shows that remuneration and promotion is given on

the performance basis. People have a strong job pride as it has created niche
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 in the sector that it operates in. The staff numbers initially were 15 which

today amounts to 115 approximately (Appendix 1).

c) Impact on Society: Mr. Beans owner has impacted and helped the society at

large, he has its association with CRY an NGO which helps the

underprivileged children for a better living and from time to time they offer

donations to the local NGO’s and put charity boxes in the store to help people

(Appendix 1).

f) Business results: This is the most important factor as it considers all the

financial and the non-financial gains that the business enterprise is earning.

The Mr. Beans is very successful in non-financial gains as we have seen

above and as far as the financial gain is considered the enterprise is a $ 1.25

million which can be seen as quite an impressive figure for just an 8 year old

coffee lounge enterprise. The business is solely the cash business in forward

integration and wholly credit business in terms of cost of the inputs. The cost

of inputs is saved by having a fixed vendor/ supplier for coffee beans and

other products like the milk for making coffee and the products like sauce

packets and other bakery products (Appendix 1).

Proposed Improvements by the researcher are that the entrepreneur can divide his

risk as well as increase his revenues by having investment partners and providing

franchisee, this will help Mr. Garha to reach out to different the destinations at a

faster pace and less cost while earning profit at a nominal rate. Customer

satisfaction can be increased by having separate lounge for families as this will

increase the number of families coming to the lounge. They can have tie-ups with

International hotels and airports to advertise themselves as at these places

international customer base is available and they are known to the concept of

8
sheesha and this will help the entrepreneur increase his customer base

internationally and help the venture know what that customer base like as the

venture wants to grow internationally. They can introduce coffee mugs made out of

mud which are used by the railways which will save cost as well as openly advertise

about being eco-friendly thus helping the environment to remain safe(Appendix 2) .

Answer 3.

The contribution of Mr. Beans coffee lounge can be treated as a milestone in the

sector, because many big players were not considering Indore as their market and

Mr. Garha opened the lounge and proved them wrong and thus seeing the success

of the Mr. Beans the bigger players came to the city and tried to exploit the

opportunity thus helping Indore’s growth in the sector. The entrepreneur was the first

one to enter the lounge concept as well as was the first one to commercially launch

sheesha in India and seeing the success other players came in with similar concepts

of lounges and that showed that people just did not sit there to have coffee or other

beverages but can hold informal meetings, conferences, parties and get together

with the family members. The concept changed the whole meaning of just sitting and

having coffee to all other possibilities that could be done in terms of lounging system.

Mr. Garha said a very nice line ‘Any business that come first with innovation and

retain it is a successful business’, this shows that he tried to innovate or rather fill the

gap of the lounge concept and help the sector grow. The sectors augmented product

which includes the aura and the experience around the core product had been

completely changed and coffee lounges had started to be seen with a different

perception of spending time with families, friends and colleagues as said by

Mr.Garha on while having a meeting with him on feb.1/2011

9
. The law of karma ‘the effort of today is the destiny of tomorrow’ can be applied here

as he has tried to change the concept of the coffee shops into rich and classy

lounging system and his efforts has given him fruitful returns in the sector and many

other players are imitating the concept and growing (Vaswani,J.P., 2004).

Answer 4.

The risk of any business needs to be looked after and sorted out through

precautions

As per the conversation dated on feb.1/2010 Mr. Garha said that during the start-up

and even today during operations of the company Mr. Garha faced and faces many

challenges such as:

1. Technological risks: are the machines that they bought initially from abroad

mainly American and German machineries like coffee-maker and other

machine types, only some were successful and not all which use to lead to

problems such as delay or not the final product that the company were looking

for, to serve their customers and hence technological risk was a big hindrance

for the performance initially and sometimes during operations even today

when company try to introduce new machines.

2. Management risk in the business is huge as the business is scattered in

seven different cities and managed in the hierarchical structure in a way that it

is managed from the head office which is situated in Indore. One of the

biggest management risk faced by the business was when they first planned

to open an outlet outside Indore as they needed to strengthen their system

and function as a strong team to write another success story in the new city.

10
 3. Market risk can be treated in terms of competition and thus to overcome this

risk Mr. Beans try to give the best experience and the product to the

customers coming to their lounge. They try to keep innovating with time and

work according to the environment as they introduce more hot coffee in winter

season and vice-versa.

4. Political risk is huge as the entrepreneur is related to a family which belong to

a particular political party and thus sometimes the opposition party create

some problem for them to operate as some consider sheesha’s bad for health

and try to make it a political issue and hence political risk for the entrepreneur

as well as his venture is huge.

5. Regulatory risk: As hookah’s are served in the cafe lounge so some rules and

regulations needs to followed compulsorily, sheesha’s cannot be served to

the person who is a minor i.e.; below 18 years of age and hence government

approved Identity cards are checked before serving and no other identity

cards are accepted. Bill is given to every customer, if bill is not provided then

the amount is deducted from the staff’s salary and thus maintains and tries to

follow the rules as much as possible and are successful at a great extent.

Future prospects of the company are the entrepreneur is planning to enter into

airport lounges and wants to open an outlet in Chennai as well as planning to go

International and has finalised the location in Dubai as it is a hub for sheesha’s and

are in talks for fulfilling the legal formalities in Dubai.

Conclusion:

11
The researcher can conclude that Mr. Beans has changed the whole scenario of the

cafe sector and helped the sector grow dramatically and Mr. Garha has taught the

researcher that with a concept in your mind, if you nail the opportunity at the right

time you ought to get successful no matter what ever is the condition.

(Word Count : 2393)

BIBLIOGRAPHY:

1. Bessant John, et al 2011. . [ONLINE] Available at: http://www.managing-

innovation.com/tools/Business%20Excellence%20Model.pdf. [Accessed 04

February 2011]

12
 2. Bragg, A., Bhushan, S. & Garha A., (2010). Abhimanyu Garha & Mr

Beans Lounging towards Success . , Daly College Business School &

Leicester Business School ,Entrepreneurship Case series , July 2010 pp 1 -6

3. D Watson, 2005. Business Models. Edition. Harriman House.

4. J.P. Vaswani, 2004. What You Would Like to Know About Karma. Edition.
Leadership Processes: Business Results
Sterling Publishers Pvt.Ltd ,India
The leader here is This is an Mr. Beans is very
5.
solely Mr. Garha Mann,R,. Adebanjo, O. & Kehoe,D. (1999) "Best practices in the food
important part and brand in the
successful
who looks after and being in the cafe lounge sector as
the whole drinks industry", British Food Journal, Vol.
business 8 years 101 Iss: 3, pp.238 - 254 in just eight years it
business and from now the has created a place in
6. Patrick J. Murphy, (2009) "Entrepreneurship theory and the poverty of
under his venture try to people’s mind and
supervision the historicism", Journal of Management History, Vol. 15 Iss: 2, pp.109 –people
bring in new 133 have a set
business has machinery and perception for the
grown 7. Peter F. Drucker, 2007. Innovation
technologyandto Entrepreneurship. 2nd Revised edition
lounge. This is a very
commendably keep the big achievement as an
exceptional. Edition. Butterworth-Heinemann
market enterprise and in just
competitive. eight years it has
Having the first become a $ 1.25
mover billion enterprise
advantage the which itself speaks
venture and the about the result the
entrepreneur business is giving to
keeps on the entrepreneur.
continuously
improving the
business as h e
is in talks with
SAP to develop
the software
and run his People Satisfaction
company
The people working
better.
in the venture are
happy and content
People
Appendix 1: Management because of the niche
created by the
The management of
venture as they can
the venture is nice as
associate themselves
it is checked from
with the venture.
time to time on
They are treated well
phone by the
and are provided
entrepreneur himself
and his close friends
with good incentives
and remunerations
13
and colleagues go
from time to time.
and check and faults
are corrected if any.
 Policy and Strategy :

The venture adheres

to strict rules and
regulations as they
Leadership Processes: Business Results
serve sheesha and Customer Satisfaction
only govt. Approved Marketing can Cost can thus be cut
The leadership The customers base
i.d.cards are be done on down by introducing
can be divided by the venture has a
accepted. The much larger mud made coffee
introducing strong satisfaction
contract made with platform like in mugs and the revenue
investment level as the customers
the coffee blending International can be generated by
partners and at least come to the
company is a very hotels and focusing on the
giving out lounge twice or thrice
good strategy which airports and international
franchisees and in a week.
helps them to have a cater to the customers and
thus risk can be
competitive international dividing risk and
divided and the
advantage. Impact on Society:
business can grow customers as he increasing the number
at a faster pace. wants to open The impact on society of outlets by
his venture has been huge as it introducing franchisee
internationally changed the whole system.
in the near concept of coffee
By introducing
future. shop into lounge
separate family
concept. Mr.Garha
lounges they can
has helped the
increase their
society at large by
customer size and this
donating money to
will help them
local NGO’s and CRY,
generate more
an NGO who helps
revenues.
APPENDIX 2 underprivileged
People Satisfaction
children.

People Management
PROPOSED IMPROVEMENTS IN THE BUSINESS MODEL:

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