MBA CHAI WALA Case study : How Prafull Billore bootstrapped an Rs.4 Crore turnover business from Rs.8000 by selling tea in just 4 years.

 

From a big dream of grabbing an MBA degree from one of the top colleges in India to being a dropout from MBA college and opening a tea stall in Ahemdabad being a 20-year-old B.com graduate who was neither a foodie nor had any interest in cooking but still hustled day and night to bootstrap his tea stall with an initial investment of Rs.8000 to an Rs. 4 Crore turnover company  at the age of 24 named

 Mr. Billore Ahmedabad Chai Wala (MBA CHAI WALA), became the 2nd world's most famous Chai Wala after our honorable prime minister Shri Narendra Modi. Yes,  we are talking about this young, passionate, and visionary entrepreneur and founder of MBA CHAI WALA, Mr.Prafull Billore. Let's take an insight into his business case study and essential learnings from them.

The Beginning of Prafull's journey: CAT Preparation

Prafull Billore was born on 14 January 1996 in Indore, Madhya Pradesh. He graduated in 2016 with a Bachelor of Commerce (B.Com) from Devi Ahilya Vishwavidyalaya (DAVV), Indore. Prafull began training for both CAT (Common Admission Test - to get into top business colleges of the country) and GMAT (Graduate Management Admission Test) in 2016, but failed the CAT exam twice, despite his best efforts. Prafull was disappointed by his CAT exam results because bagging an MBA degree was his dream, but his passion for being an entrepreneur drove him to travel places by train, bus, or rickshaw – wherever and however the money allowed. He always believes in learning from people and venturing into new places. In 2017 Billore came to Ahmedabad in search of a job to overcome his failure to earn an MBA degree. He began looking for opportunities in different cities. Finally, he was recruited as a delivery boy at a McDonald’s outlet in Ahmedabad for Rs 37 per hour for 4-5 months. He got a promotion soon and learned how to interact with 100's people, how to communicate and do marketing of your product, and how to sell coke, ice cream, and french fries to a customer who came to buy only one Aloo Tikki burger in the name of discount.

Take Home Msg:- Never hesitate to work at a small post to learn something new, Prafull's job at McDonald's didn't offer any good salary not respect but he did it to learn marketing, improve communication skills and talking to customers, understand their mindset, and how to sell multiple products by using simple tricks of discount and free offerings to a customer who only came to buy only one small product (like a burger in case of McDonald's)  which later helped him to grow his tea stall and become a multi-millionaire entrepreneur.

But there was always pressure from his parents to enter a full-time college so that he could complete his education and earn a living. 

The Begining of MBA CHAI WALA: Started a tea stall in Ahemdabad

His parents wanted him to get an MBA degree and to fulfill their wishes, Billore took admission in a college. He continued with part-time jobs while studying. He left college on the seventh day. I gathered courage, bought everything I needed, and started a tea stall on the roadside. He wanted to start his own business but had no money. He was left with 2 choices - 

a) Either to start his business with a huge investment of 1-2 lakhs in a restaurant or something.

b)Or, to begin with, a small investment and grow that business to heights by his passion, that’s when the idea of launching a business that needed small capital struck him. He zeroed in on the idea of setting up a tea stall on the roads of Ahmedabad. To get the initial money, he lied to his father, Billore told him he needed Rs 8,000 for college. With this money, he started his own tea stall on the Sarkhej-Gandhinagar Highway in Ahmedabad.

Take Home Msg:- No work, No idea is small. You don't need lakhs of Rupees to start your startup, you can start from scratch with some small investments. The benefit of such a business model is that you don't have fear of falling because you invested only a small penny of the amount in your startup and not lakhs of Rupees that will be lost if you fail. It increases your focus and challenges you to focus with full zeal on your work without any fears and forces your brain to look for new ideas to scale up your startup.

Initial Challenges faced by MBA CHAI WALA  and how Prafull overcame them:-

Prafull didn’t know how to make tea and on the very first day, he messed up by adding too much sugar or tea leaves. But gradually, he learned how to make a delicious tea.

His friends and relatives used to make funny memes about him and his ideas but he ignored them.

Many times he suffered exploitation from the local police and he was forced to remove the stall from the road.

The next challenge he faced was in sales. Initially, no customers came then Prafull started approaching customers with his unique marketing strategies. He started serving tea to people walking on the road by speaking in English to them, which surprised them and attracted more customers.

Billore’s ideas became the talk of the town. He started to organize poetry talks like 'CHAI-e-MEHFIL', ludo games, open microphone sessions, organize live telecasts of cricket matches, and also put up a whiteboard where people could leave messages for their dear ones and could advertise by writing that they want a job or looking to hire someone for a job; this gave people something new to look forward to every time they visited his tea stall. It helped MBA CHAI WALA to gain popularity on social media but his popularity skyrocketed when he conducted the 3 most successful and innovative events on his tea stall which were-

1) On one Valentine’s Day, he offered free tea to those who were single, and this idea went viral. He also got calls to set up his tea stall at weddings and other events.

2) In 2018, MBA CHAI WALA donated Rs. 2.5 lakhs which he collected by running campaigns from his tea stall to social media, to help rescue people and aid them with basic necessities who were suffering from Kerala flood.

3) Giving free chai to people during elections when a particular political party wins and also to Police, Doctors, Ahmedabad colleges, soldier, and policemen, these events helped him to attract customers to his outlet.

Take Home Msg:- If you can't make your product unique, you must know to sell it in a unique way. The same was the case with Prafull, he organized events on various occasions and connected them to his product to gain popularity on a large scale which played a key role in getting investors for his business and expanding it gradually to heights.

Shifting from B2C to B2B model:

MBA CHAI WALA uses the KIOSK FRANCHISE MODEL to prepare their various chai cups with the help of machines to maintain efficient procedures and this model helps to keep sanitization up to the mark. They ventured from the B2C ( Business to customer ) model to B2B (Business to Business) model by giving the franchise to people. They are having 50+ franchises and a couple of Dealerships.

, the franchise gets promising returns around (1-2L with a high footfall outlet) in a month.

Their terms and conditions to apply for a franchise are:- 

• The company mostly prefers an agreement period of 5 years. Comparatively, It’s good than other brands in the market. they prefer 10 year agreement period with a high franchise cost.

• Space required around 100 – 200 sq. ft

• Franchise Fees would be (INR 3 Lakhs)

• Space rent for good locality costs approx (INR 2- 5 Lakhs)

• Maintenance and other related costs Rs 1 – 2 Lakhs

• Total Cost Rs (INR 10 lakhs)

 After operating from the SG Highway outlet for two years, Prafull then expanded into a franchisee cafe in Bhopal. Starting with a simple tea stall with an investment of Rs.8000, MBA Chaiwala now runs 50 cafes. However, the goal of MBA Chaiwala is to serve the masses who would like to have a cup of tea at Rs 40-50, sitting comfortably in a cafe.

The tea market in India is being driven by healthy production and consumption. In 2020, nearly 1.10 million tons of tea were consumed in the country.

The market in the country is projected to witness further growth in the forecast period of 2022-2027, growing at a CAGR of 4.2 percent. In 2026, the tea industry in India is expected to attain 1.40 million tonnes. 

MISSION OF MBA CHAI WALA:  A Startup from every small town

Besides the tea business, Prafull has also started an MBA Chaiwala academy. His inspiring journey and being social media friendly gave him 1.41M subscribers on his YouTube channel which he says also played a pivotal role in brand recognition. As a business coach on social media, Prafull talks about entrepreneurship and motivation. He is also planning to open around 100 MBA Chaiwala outlets by the end of 2022. 

The Covid-19 outbreak has ravaged India. Billore wants to do his bit in these difficult times by raising funds for those who are suffering from cancer and heart ailments

Talking about how his parents reacted when he successfully built a successful business, Prafull smiles and says that Indian parents are hard to convince, unless you give them results, they won’t trust you, 

In his initial days, he makes 150 rupees only. Now he reached 10,000 teacups daily. He also did interviews with Josh Talks, and he had also delivered his motivational lectures in IITs, IIMs, and TEDx.

Take Home Msg:- Once you build your audience and created your Brand value you can shift to the B2B model and offer franchises for your brand to expand your business in less time and generate more revenue. Also, to convince your parents, you can simply show them some results by starting your startup without letting them know and when the results will come they will start believing your ideas and will support you.

Conclusion:

In the business world, no idea is small or big, a person who is an MBA degree holder can remain unemployed or a person like Prafull without an MBA degree can start to open a tea stall by investing just Rs.8000 and reach this level that He charges Rs 50,000 per day for serving tea at weddings.

His one famous saying is, 'Either you should marry the one you love or you should start loving the one whom you get married ', Prafull couldn't fulfill his dream to pursue MBA to be an entrepreneur so he started loving selling tea and used it to be a successful entrepreneur.