Initial failure spurs major restaurant success
When David Emitu decided to open a restaurant in a brand-new shopping centre in the Ntinda district of Kampala, Uganda, he had no experience in the catering business, but he knew he had to make it work.
“It was my Plan B, there was no Plan C, and I was certainly not going back to the corporate world,” says the 47-year-old former banker who today owns the thriving Inyamat Cafe and Restaurant in the Capital Shoppers Mall, as well as a fast-growing catering business linked to the restaurant.
David’s disastrous Plan A was a broiler chicken farm that he started at age 39 when he grew tired of the banking world where he had worked most of his career. For 18 months, his new venture haemorrhaged cash as the price of chicken feed shot through the roof. He also did not pay enough attention to the marketing side of the business, and was forced to sell to a middle man at a price too low to sustain the farm.
He felt incredibly frustrated that he could not put his produce directly onto the plate of the end user, so by the time he shut the chicken farm down, the idea that he should start a restaurant was lodged firmly at the back of his mind.
He was determined not to go back to banking, and he threw himself into expanding a hair and beauty salon that he had been running as a side project. He had a bit of collateral, got a bank loan, and negotiated a lease for a second branch of the salon in a new shopping centre that was being built in the Ntinda suburb of Kampala.
As the building was being constructed, he would occasionally chat to the owner of the centre when he visited the building site. Almost on a whim, he offered to set up a canteen at the centre to serve the workers of the mall and the anchor supermarket. The landlord agreed to give him space, and David suddenly found himself in the catering business.
It was a daunting project. The centre was set to open in six months, David had no experience in catering and the space he had been allocated was on the second floor – not ideal for the fine dining restaurant that he wanted to set up alongside the canteen.
But David had a few things going for him. He was able to use some of the bank loan for starting up the restaurant, borrowed the rest from family members, and ploughed some of the money generated by the salon into the restaurant. He and his wife each owned 40% of the restaurant, and they brought in a friend who was an experienced high-end chef as a 20% partner.
As a former banker and qualified accountant, David was able to work out a thorough financial plan for the business. It would have been too expensive to start the whole restaurant at once, so the partners established the canteen first, and opened the sit-down section of the restaurant some six months later.
David says it was a scary experience living through the first year or so while the restaurant was slowly making its way towards profitability, but he knew from the start that it was going to be tough.
Fortunately, businesses that wanted to move away from the congestion of the Kampala city centre were flocking to suburbs like Ntinda, and the restaurant was able to grow its clientele steadily.
Inyamat Cafe and Restaurant started with a continental menu and a strong emphasis on coffee, but as the demand grew and the partners managed to build their team and infrastructure, they added a lunch-time buffet of local cuisine.
The restaurant can only grow as far as its space in the mall allows, but David says they found that catering for outside institutions and functions proved to be an important growth point. With a lucrative catering contract for the United Nations contingent in Kampala and growing demand to cater for functions such as weddings, he expects the revenue from catering to soon outstrip that of the main restaurant business.
A growing business such as Inyamat is hungry for expansion finance, and David constantly did his rounds among the local banks. It was frustrating, he said, because the banks were not very flexible. When he came upon Business Partners International, he saw an opportunity to partner with a funder that is interested in the growth of the business. “And when I heard about their Technical Assistance Facility, I grew really excited – no other funder does that,” he says.
BPI’s Technical Assistance Facility is an interest-free loan that a BPI client can use to pay for technical support, from setting up a financial-management system, to building an online presence to hiring industry-specific expertise to improve the operation.
With BPI funding, David was able to invest in new equipment to boost the catering business, including a delivery van. And with the help of the Technical Assistance Facility, the restaurant has a new point-of-sale system integrated with a proper accounting system.
Next, David is hoping to work on a long-term strategy for the business as well as a marketing plan with the help of the Technical Assistance facility.
Meanwhile, David has found the perfect spot for a second branch of his restaurant – an outdoor space for which he has signed a six-year lease, and where he is building a garden restaurant ideal for family groups and functions.
By the looks of things, David won’t be going back to the corporate world any time soon.