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For the love of coffee

Love of coffee is a personal thing, and nobody knows this better than entrepreneurial brothers Chris and Andrew Brown, the joint owner­ managers of workplace coffee bar chain, The Daily Buzz. Andrew, a qualified CA, is the financial expert while Chris, the "operational guru", provides the food and beverage knowledge and the required creative flair.

But investing in a new business is not without its challenges, with rough estimates putting failures of new South African businesses in the first two years at between 65% and 75%. The stakes are high - especially when your home mortgage has provided most of your start-up capital.

Andrew explains: "My background is originally in finance and risk management. Some years ago, after first-hand experience of a mediocre coffee offering at my workplace, I approached the bank where I worked with a proposal for a better caffeine experience. My employer liked the idea and the next step was to link up with my brother, who has a background in hospitality and travel and has worked in some of the world's top hotels and restaurants .

Training up

As part of their start-up plan, Chris trained at the London School of Coffee and since then has continued to widen his knowledge of all things coffee-related through further targeted travel and experiences.

Their first coffee bar opened in August 2006 on the trading floor of the Investment Bank at Standard Bank in Johannesburg. Now in their seventh year of operation, the brothers are currently operating a total of six outlets of The Daily Buzz in blue chip companies, with the intention to expand where opportunities arise. From their original humble beginnings, they are pleased at what they have achieved so far.

The challenges

Andrew says: "Certainly, the most difficult element about starting a new business is the first contract. Getting someone to believe in you is critical - reputations can be at risk with offering someone a new business contract. Fortunately, in a situation in which our initial capital was my house bond, my financial background meant that I was aware of all the requirements from a legislative and compliance

perspective. It took us three years to break even before we made a profit, as we were constantly reinvesting back into the business

The brothers think that South African legislation could be significantly more supportive of new businesses. Andrew believes that lighter labour regulations are needed,as well as easier access to capital. There is also a plethora of tax issues to be aware of. He says, "I believe there is over-regulation of smaller businesses. It's difficult to start a business and comply ,,,jth all the laws when you should be concentrating on sales.

Tips for start-ups

Asked for his tips for people wanting to start a business, Andrew offers the following:

  • Be aware of location - it's very important.
  • Make sure that you have a marketing strategy.
  • Invest some money in a good corporate identity and brand from the very beginning.
  • Prepare a proper business plan -it makes you think about all the different aspects you need to be aware of, including cash flows, supplies, profitability.
  • Sales must be decent from the word go to make your business viable
  • Bring in quality and experience to make your business stand out
  • Train your staff members appropriately and strive to pass on invaluable experience
  • Watch trends, both local and international, that may be appropriate for your business.

They also advice that it is important to look around you for experts and mentors. In this vein, they make use of a business coach, both for themselves as well as members of staff for your business.

“We strive to operate at a higher level than others players in the same space. All new staff members have a proper induction and learn about the 16 non-negotiables of our business that are included in our standard code of conduct. We make sure that we operate an ongoing in-house training programme to keep up those essential levels of quality,” Chris concludes.