Tiffin Service Business Pros and Cons with full

calculation
As we have started the tiffin service business, I have self-experienced lot of ups and downs
starting from managing the staff till meeting the customers requirement and trying hard to
retain them.
I am writing this blog to point out the pros and cons for the people who are serving the tiffin
services across the country and the people who are taking the tiffin service. This will be
beneficial for both parties if they both understand each other's requirement and accordingly
fulfill the loyalty.
Pros. for the Provider:
1. This could turn up in good profit.
2. This is a noble service in hospitality business which gives you satisfaction if the
customers are happy.
3. You also make a very good social network which could be good for you and your
business in future.
Cons for the Provider:
1. But all these above require a very well managed staff and good number of resources.
Serving 50 to 100 customer base a day will at least require 2 expert cooks, 2 helpers and 3
to 4 delivery boys serving the different areas. Managing staff now days is very challenging
job as you never know when one of your cook or helper will be off from the work. So you
need to plan the things well ahead. Many times you need to always hire an extra cook for
such cases or pay extra from your pocket and hire new one to fill the gap. So you need a
risk and contingency planning in the food business.
2. You need a very good customer base to make the profit depending on the type of tiffin
service you provide. When I say good customer base that means considering the above
number of staffs, one will at least require 100 customers for lunch and 100 for dinner if you
fix the price of the tiffin as 60 to 70 Rs to run into a good profitable business.
Profit/Loss and Cut off customer required for tiffin business.
Lets calculate the cut off number of customer base required:
1. Salary for all the cook and workers with above number of staff will vary from 50K to 60K.
Wow a huge expenditure in tiffin business. But yes this is true.
2. Lets assume that one charges tiffin at 70 Rs. with a dry vegetable, daal, rice, chapati,
salad and chatani. That means for 25 days serving in a month you will fix subsidized rate to
1500 to 1700 Rs for a month.
3. Each tiffin food cost comes to 25 to 30 Rs. in which the most costly thing is vegetable
today which shares 50% of your food cost.
4. If you have 30 customers for lunch and 30 for dinner then total cost comes to 60*28
(Average cost)*25 (number of days) = 42000 Rs.
5. 1 cylinder on an average serves 150 customers. That means you will require 25/(150/60)
= 10 cylinder for a month.
6. 1 commercial cylinder cost 1800 Rs. therefore total cost = 18000 Rs for a month.
7. On an average to serve 60 customers across 2 times you will cover 200 KM with 4 bikes.
(25 Km each time each bike). That means total petrol cost is almost 350 Rs. per day and
almost 9000 for month.
8. 4 Bike maintenance and service cost will come to at least 4000 each month.
Total Cost: 60000+42000+18000+9000+4000=133000 Rs per month.
Total Revenue = 60*1600 (Average price) = 96000 Rs.

Profit = 96000-133000= (-37000)

Ohhhhh.....are we in loss?.....yes definitely we are in loss with only 60 customer base for the
day.
Now lets decrease the cost of the tiffin to 15 Rs. (Just serving vegetable with masala and
lot of water and also serving in a very less quantity, no quality grains and oil used) and
decrease the cost to 45 Rs each tiffin. In this model you will not get the variety in vegetable
dishes because all type of vegetable cannot be prepared with water.
Total Cost: 40000 (Cheap labor) + 22500 (cost of food for 25 days) + 18000+13000 = 93500
Rs.
Total Revenue: 60*1100 = 66000 rs.
Total profit = 66000-93500= (-27500)
Oops still in loss and almost similar loss as above. ( In such cases business owners try to
reduce the cost by decreasing the labor cost and low quality grains, oil and stale
vegetables) That hits the quality of the food and delivery mismanagement.
The first model costing is done based on our daily served food which has a very good
quality with a reasonable quantity to serve a person sufficiently. We also eat the same what
we serve. Thus we always follow the first model and still try to cope up the market because
of the mindset of the people. I will talk about the general customers mindset and will try to
point out how one should think when it comes to a very basic requirement of the life as daily
food.
Moral of the story is with any kind of model above, to meet the cut off you should at least
require 60 to 70 customer base in low quality food business and 100 customers in high
quality food business. You can do your own calculation. Therefore it is not easy business to
run untill you have well know good customer base esle you will keep on loosing money
every month.