Shunning jewellery business, Go-Gola's Sachin Jain finds profit in ice lollies

Mumbai-based Sachin Jain's future was pretty much set in stone, with his family'sjewellery business awaiting him after graduation. So, after a commerce degree from MMK College, Bandra, in 2002, he opted for a part-time business management course from NMIMS while working with his father.

"After three years of managing the family business, I realised that I was not interested," says the 31-year-old. So he picked a job at Egana India, a firm specialising in retailing branded watches.

"The job gave me an insight into the operation of retail companies since I was keen to tap the demand for food retailing. It also helped me save money for my venture," says Jain, who did not want his parents' help.

He managed to save Rs 5 lakh during his two-year stint at Egana and, along the way, zeroed in on his business idea: golas or 
ice lollies. "Golas were a childhood favourite for most people, but they were reluctant to let their kids try it because it was perceived as unhygienic," he says, adding, "Despite the huge potential of the business, it was limited to street vendors.

I figured if I could organise it and rid it of apprehensions, I would have a hit venture on my hands." The problem was three-fold: the ice used for golas came from impure water, the syrup used synthetic raw material, and the vendors were unhygienic.

Jain began by looking for ways to use natural fruit juice. Over the next 2-3 months, he managed to crack the problem and hired three people to handle the front end of the business. "I trained them on presentation and hygiene while serving people," he adds.

In March 2008, he managed to find an ideal location for his first outlet, a 25 sq ft kiosk at Bandra Linking road. The kiosk was just big enough for two people to stand and serve customers. But since it was a prime shopping destination, he still had to pay a monthly rent of Rs 30,000, and a deposit of Rs 2.5 lakh. He also had to find a vendor who could deliver ice made from mineral or purified water.
"However, the one I found only delivered ice in cubes, not slabs. So I imported a machine worth Rs 15,000 to convert the ice cubes into the format we needed," he says. In the same month, he finally launched Go-Gola. "We got a very good response, and on the first day, we sold around 1,000 golas, at Rs30 each," says Jain, who kept the margins low, pricing it at Rs10 more than that charged by the street vendors.

The move paid off. Within a year, he set up kiosks in eight more locations in Mumbai and increased the staff to 18-20. "In the first year of operations, we got a business of around Rs 10 lakh," he adds. According to Jain, another thing he got right was the lease model for his realty expansion, making it easy to shut down any outlet posting sluggish sales. At present, he has retained only five profitable outlets.

"We are planning to set up bigger, 300 sq ft outlets now," he says. The first one opened shop in Mumbai recently. They will offer more varieties of international shakes and toppings, besides the current menu of 20 gola flavours, each priced at Rs 55 currently.