New Generation, Old Values. New Venture, Old Enterprise.
Vision is never limited to that of the founder. It is a continuous journey of growth the following generation takes up and leads to next level of enterprise. The Bawa Group is an example that shows how on the original vision of real estate and construction, has been added an extra edge of hospitality, wellness and F&B. The second generation is excited about the growth that will shape up across all these verticals. In an interaction with SMEntrepreneur, Vikramveer Singh Bawa, second generation entrepreneur shares his vision and growth strategies for the family business.
The Bawa Group was founded in 1972, in the initial years it would take up construction projects. Gurinder Singh Bawa joined the family business at a young age and established the company amongst the largest in Maharashtra to undertake industrial protective coating projects. GS Bawa laid the foundation of the group by setting up separate divisions for real estate and hotel businesses, and the second generation is doing their bit and are excited about the new phase of growth that they will bring. Vikramveer Singh Bawa, the younger son, is excited about the growth he perceives for the new emerging segments.
On the legacy of a successful, growing construction business owning a number of hotels, Vikramveer has a dream of having a boutique budget hotel chain and a growing wellness arm. While elder brother Karanveer Singh Bawa looks after the construction business of Bawa Group, founder GS Bawa continues to spearhead the real estate business; Vikramveer’s sister Kiran works with him in the wellness vertical.
Entering the Family Business
After completing his post graduation in hospitality management from the Les Roches Institute, Switzerland, Vikram leveraged his education, expertise, professional approach, fresh ideas and positive energy to scale the family business. In 2003, he joined the Hospitality and Services division of the group. His present role in the group is to handle the hospitality and F&B segments; and he is responsible for the growth of the Iosis Medi Spa venture through strategic planning.
Why did he choose the hospitality side of the business? “I always have been interested in the hotel side. As kids, we used to visit our hotels. The interest came from there to take care of the family business’ hotel side. Of course, construction was also a part of it but I was never attracted too much towards it. The interest was always there in the hotel business, so it was not something that was enforced on me,” says Vikram.
Vikram was 22 when he joined the family business. He has always sought the advice of Karanveer Singh Bawa, his brother who is elder by two years, before making crucial decisions. Karanveer started working in the business when he was 17, while still in college.
Is there clarity of roles between the two brothers? “I take care of the hotels, and he takes care of the construction part. Wherever I require his opinion on strategic decisions, I always consult him,” explains Vikram.
Bringing in New Focus and Growth
When Vikram joined the hotel business, the group had three hotels under their belt. But the hotels were mainly managed by the managers and Vikram found that the personal touch from the owners’ part was missing.
“Primarily, my father is a real estate person. Hotels for him have always been a way of investment, as he is not an industry person. After I started taking care of the business, we upscaled the properties to better services and interiors,” recalls Vikram.
The Bawa Group of Hotels has been into the budget segment of hotels owing to the high occupancy and lower overhead costs. Vikram renovated properties at Juhu and Bandra, and right now, the hotel at the airport is also undergoing renovation. The company is looking at increasing the number of rooms and adding more services to its bouquet of offerings.
Are they playing it safe in the budget segment and what are the plans for expansion? “We believe in placing ourselves where the opportunity is. If we get an opportunity to grow through holiday destinations, we will definitely look at it. We are consciously looking at hotels which are there in business cities. We are now moving into Tier 1 and 2 towns. These towns have huge scope as there is less competition and investments are coming from both government and people,” revealed Vikram.
The hotel division has also started franchising. They have one hotel in Kolkata and are expanding to other cities. The company is doing one property in Baroda, which is a 50-room property with limited F&B choice. Vikram is clear that the hospitality segment will grow either through joint ventures or leased out properties. Presently, Bawa Group has five hotels under its umbrella.
Bawa Group has also started Fairdeals, a travel site. It is an offline business of hotel reservations done by the Bawa Group. Herein the company takes care of the hotel reservation and plays the role of a travel planner.
Growth in F&B
The F&B arm of the group was started almost seven years back by Vikram. It was started as a chain of fine dining restaurants with the hookah as an integral part of the concept. With the ban coming in Maharashtra and other states, the group had to convert the chain from a fine dining concept to a QSR format with similar cuisine. How are they going to do that? “I am taking some time to re-launch it probably at the beginning of the next year. In the F&B segment, we have Bistro Grill that we will be rebranding as Lebanese Express. So Lebanese Express is the new brand that we are launching. It is going to be in QSR format at malls and high-streets,” informs Vikram.
Apart from moving from fine dine to QSR, the group also intends to bring restaurant brands to India for different cuisines. The group had seven restaurants running, so it has taken a standstill on all of them because the numbers are not matching to their expectations. “QSR is always much easier to scale up because you can match up to the service expectations and you can concentrate more on the F&B part and the quality of food. Of course, the overheads are less, so you can grow in size and numbers and mushroom everywhere,” states Vikram.
Riding on the Wellness Wave
Vikram’s sister Kiran always had a keen interest in cosmetology. At a time when in India the spa was an unheard-of thing, she started with a wellness centre in Lokhandwala, Mumbai. It turned out well. The group wanted to take it ahead as a similar concept of wellness chain across the city.
It was then that a friend of Kiran, Shilpa Shetty, the Hindi film actress who is also renowned as the fittest of her fraternity, also joined as an equity partner and a celebrity endorser to the brand. The two combined well and it turned out well for the brand, and then the group wanted to take the brand across India.
Although the brand was incepted in 2007, Iosis started franchising in 2012. In February 2012, the brand opened its first franchised unit in Guwahati. Once the brand started its own three centres in Mumbai, they were confident of managing it well. The brand hired a staff of top notch professionals in the industry with dermatologists and dieticians on board. The founders knew that now they could go ahead because human resource was now in place. The franchisees, which Iosis is running, are at two distinct places – Guwahati and Lucknow. Managing this new business, which is a first generation idea, has come easy owing to their hospitality background.
On expansion of Iosis, Vikram says, “Tier 1 and 2 cities have a huge scope of wellness centres which cater to the needs of people related to hair or skin and slimming. Spa is again a part of it because that is something about luxury, but again the small town also want to indulge in spa services. But with regards to skin and hair it is a necessity. Going forward, we are doing it in Tier 1 & 2 cities. We are doing it in Benares, Indore and Ghaziabad, so before touching Delhi, there are so many cities where people are awaiting good quality products.”
In this financial year, Iosis will have 15 centres. Growth takes time because average unit size being bigger at 2500 sq. ft. The brand aims to achieve the 50-unit mark by 2015.
Multiplying Profits with Partners
On expanding with multi-unit franchisees, Vikram says, “We prefer multi-unit franchisees. It is easier to deal with few, and they can be our partners in growth because every person is different. Their thinking and their expectations are different. Of course, my preference will always be to have a bunch of people who are looking at a similar growth strategy like ours and who are on board with us. We want to give away master franchise of different territory level. It can be state or city.”
To partner, the first requirement is the financial backing of the partner. Iosis prefers people with business background and the people who have a stronghold in their territory with regard to manpower, relations with government bodies and local municipality authorities. “If we associate with these kinds of people, the growth for us will be faster. As a result, we can concentrate on our core business of providing the right management and looking at going to every part of India, spending our resources with regard to shortlisting the properties, having the right people on board and training them,” says Vikram. A single unit franchise of Iosis costs Rs 1.3 to 1.5 crore. It also depends on the size and other factors like area and location.
Growth in the Bawa Group
So which is the fastest growing business segment for the group? “All segments are growing and supporting each other. We are improving the branding in the hotels. Also, we are increasing the number of units in Iosis. At the real estate front, we are doing a number of projects every year. But wellness is something looking very promising because the requirement of capital is quite low as compared to real estate sector and hotels. The growth there is much faster, as we are serving everyday needs as compared to selling flats or booking hotels,” explains Vikram.
With Rs 70-crore turnover for this year and 500 employees, the group is now all set for its next wave of growth in which franchising will play a vital role.
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