Blunders that almost killed my dream business

Many of us have a dream, a calling, something we feel complete doing. For Ann, food was it. She was the head caterer at a high school in Murang’a for 12 years before she decided to start her own cafeteria in Nairobi’s Zimmerman Estate in 2000.

Eight years later, she expanded into outside catering under the name Noni Caterers. And that’s when things began to go south.

Why did you start a cafeteria business?

After 12 years as head caterer, I was itching for something that I could put my name to. At the time, there weren’t many cafeterias inside or near estates, so I saw a gap and a need, and opened a cafeteria in Zimmerman.

How much capital did you inject into it?

I put in Sh40,000. I didn’t need much — rent, a few tables and chairs, and kitchen equipment.

How did you get into outside catering?

It actually happened by mistake. My brother was living in the UK. He was about to get married and wanted to have the ceremony in Kenya. Since I was here, I offered to organise for the food. Instead of hiring a caterer, I decided to do it myself.

So outside catering was never really in your initial plan?

Not really. But after doing my brother’s wedding, I got so many people asking me to do the same for them for graduations, weddings, baby showers, home parties … it was impossible to say no.

What was it like in the early years?

Busy. And I thank God I never disappointed any of my clients. I suppose when you want excellence, that’s what you give.

When did things start to go wrong?

The industry changed. There were many young people coming out of campus who would end up without jobs, so everyone started going into business. Catering and event management were the two businesses almost anyone could start with very little capital. The industry got flooded. To make matters worse, the younger generation was charging half what established caterers were charging. We lost a lot of business.

What did you do to stay afloat?

Perhaps I didn’t react fast enough. I realised my income versus expenditure was not aligning. I thought we could weather the storm, but then the cafeteria business also started to drop.

Was this also caused by an influx of new businesses?

Actually, this one was predominantly caused by supermarket chains opening food delis. In the past, when a young person was going home, they would pass by our cafeteria and buy food. Now supermarkets were offering the same service, sometimes at a cheaper rate than us because they have economies of scale. It was an assault from both sides — the younger generation taking the catering jobs, the supermarkets taking the cafeteria business.

When did you realise you were in trouble?

When I had to borrow money from my chama for the business because I was struggling to get supplies, pay workers or pay rent. But even after injecting the fresh capital, things didn’t pick up.

When did you hit rock bottom?

The day I couldn’t repay the loan from my chama. I remember balancing tears as I explained to them that I didn’t have the money. I thought they would throw me out because I hadn’t even been making monthly contributions either. Instead, they all chipped in to repay my loan. I was so grateful, yet at the same time I couldn’t understand how things had come to this.

What difficult decisions did you have to make?

I have two cafeterias. One in Zimmerman and one in Garden Estate. I had to consider shutting one of them down. But it killed my heart so much that I stalled.

How did you turn things around?

Honestly, it was many different aspects that came to my rescue. I scaled down business operations and my lifestyle. But most importantly, I refocused my energy on my original dream, which was to own cost-friendly neighbourhood cafeterias. The moment I made this decision, I turned the tide. We are now in profit.

What Sh80 taught me about building a multi-million firm

Cleaning Ecobank books sends lender into losses