Vama: Arjun Varma
Arjun Varma serves Indian food all over the world and has clients that include royalty and A-list celebrities.
Indian cuisine entrepreneur Arjun Varma runs a successful business serving food all over the world and has clients that include royalty and A-list celebrities. He tells startups.co.uk how he did it.
Arjun and Andy Varma first opened the doors of the restaurant, Vama, to customers in 1998 with a dream to bring the delights of Punjab cuisine to the UK.
Arjun, the business brains of the two, had studied at university in the UK for several years and wanted to plug a gap in the UK curry market.
“When I was studying here I realised that most curry houses were Bangladeshi and that there was virtually no North Indian food,” he says.
Back in India his brother Andy was already a well-respected chef and the pair decided to throw caution to the wind and start up a business providing authentic Indian food in the UK.
“Andy was a highly acclaimed chef back in India whereas I had been in the UK for 12 years previously and we decided that we should get a restaurant and a food concept going,” Varma says.
“We took a big gamble as Indian food is one of the most competitive food markets in the UK. There are 16,000 restaurants in the UK, 6,000 of which are in Greater London.”
They pooled money from personal savings, family and friends and a bank loan to get enough together to launch the business. And arranged for work permits for six chefs to come from India to come and work under Andy in the kitchen.
“There were a lot of internal pressures on us to succeed as we didn't have a big budget to start with. We just couldn't afford a big PR or advertising campaign.
“We decided that we had to grow the traditional way of word of mouth and recommendation and let the food, hospitality and service do the talking.”
It is a gamble that has paid off considerably as the restaurant, based on the Kings Road, Chelsea, is now part of a business empire with a turnover of around £3m a year.
Success led the brothers to expand but rather than take the obvious route and open further restaurants, the Varmas chose instead to diversify their business. Although still sticking to what they knew best – north Indian cuisine.
In January 2003 they opened Vama Direct, a catering events company, which prepares and provides food at major venues and parties.
“The idea came from when we catered for Rowan Atkinson's New Year's Eve party at the turn of the century,” says Varma. “He is a regular customer here and knows a lot about Indian food – his wife is Indian actually.
“There were about 300 people at the party and Prince Charles was among the guests.”
At the same time as Vama Direct they also opened Vamaji, which delivers their tasty food across south London.
The latest extension of the business is Vama Khana, which opened in January 2006 and supplies food to major airlines.
This business, like Vama Direct, was the result of another high profile diner visiting his London restaurant.
Varma said: “It started with Sir Richard Branson and his wife being regular guests at the restaurant and he said ‘we have got big plan for India and it would great if you can get your food on board to supply to the customers flying to India'.
“It took about a year for us to get all the necessary accreditations and licenses to supply to aircrafts but now we are the sole suppliers of food to all flights to India by Virgin – that's 14 flights a week.”
Other high profile guests include Robbie Williams, the Rolling Stones who had a Christmas party at the restaurant, and King Abdullah of Jordan.
“King Abdullah has dined here for many years and we have become quite friendly with him.
“Out of these discussions he has invited us to do a project in Jordan where we will be supplying to Royal Jordanian Airlines.
“We are also planning a project in Oman, Jordan, which will be a 300 seater open plan restaurant.”
Other deals with airlines are also in the pipeline; KLM and Malaysian airlines are also likely to be joining the Vama Khana client list, so the business could be reaching new heights in more ways than one.
A key part of Vama's success is of course their food, which is cooked on a traditional charcoal stove and gives the food a pleasant smokey flavour.
Vama's cuisine has won many favourable reviews and rewards not to mention the praise of VIPs.
However this shouldn't shield the fact that Varma is clearly a canny dealmaker and that his restaurant is often a venue for high-class negotiations as well as top-notch food.
The business now has a few investors, mostly friends of the brothers, and Varma is currently in negotiations with venture capitalists to grow the Vamaji arm of the business.
If this is successful then there will be an additional 20 sites added to delivery business, which should bring the group's overall turnover to £12m.
However, Varma greets such new soberly and doesn't appear to be getting carried away with the success.
“With growth there comes a lot more responsibility, we have to have mid-management and senior management to handle things,” he says.
Also, despite such all the accomplishments Varma doesn't appear ready to rest on his laurels yet and there is a sense of restlessness about him.
“It would be wrong to say that we are not going through tough times, we are,” he says.
“As an expanding business you have to plough your money back in and you don't see any profitability until to reach your optimum target.
“We feel that we have got another three to four years ahead of us in order to stabilise the business.”
This ‘stabilisation' is likely to include floating on the Alternative Investment Market (AIM) a move could turn Vama into one of the UK's premier curry enterprises.
Varma feels satisfaction not just with having a successful business but also with what he contributes to wider society in terms of employment, training of staff and investment.
However, the intrusions of government and rising tax bills clearly annoy Varma.
He cites the congestion charge as a major reason for the failure of small businesses in central London as well as the exorbitant level of business rates.
“It's not only becoming difficult, it is becoming ludicrously difficult.
“I think the government needs to pay heed to medium and small business because there isn't the right balance at the moment.
“London is out pricing itself for tourists and for residents. If you don't have residents you don't have repeat business. If you have no repeat business you don't have a business.”
The restaurant's business rates have trebled since he began and he feels there is little payback from the council for what he pays.
Varma said: “When I started my rates bill for this whole building was £6,700 and my rent £45,000.
“Ten years down the road my rent is still £45,000 and my rates is £18,000. It has trebled and for what? I don't get a service.
“I have to pay to call the police if there is a problem, I have to pay £2,000 for an alarm system so what am I paying for, there is no real tangible service.”
Despite these concerns Varma is living out his dreams; he has always wanted to run his own company and loves being an entrepreneur.
“I have always wanted to be very entrepreneurial and wanted to do things at grass roots level, building businesses and building brands.
“Before starting this I had a property business which I still have and I really cut my teeth in the property business in the UK.”
Building the Vama brand is very important and Varma says that this is often the case with Indian entrepreneurs and is a reason for their success in the UK.
“They are very keen on building brands, if you go to India even the small corner shop guy is wanting to create his identity through his business.
“The fear of failure is intense, so they are more driven.”
Varma and his brother are both family men and the hours they put into the business, around 80 per week, mean that he cannot be at home as much as he would like. Varma tries to stay at home during the daytime at weekends as much as he can.
“My brother and I are both married and both have young families and it is not easy as there are always cash flow problems as the money is tied up in the business,” he says.
For anyone thinking of heading into their own venture with a family member Varma suggests that like he and his brother they have ‘separate spheres' – in their case Arjan handles business whereas Andy is in charge in the kitchen.
But for anyone starting up there is one message that he has that no successful entrepreneur would disagree with.
“I think that most important of all, get your numbers right,” says Varma.