It was their reaction to one of the worst possible start-up experiences with the launch of their latest venture, the Col’cacchio restaurant in East Gate Mall in Bedfordview, Johannesburg. The couple refused to give up, swung into overdrive, negotiated breathing space with the landlord, their financiers and their franchisor, took on board a mentor and implemented a rescue strategy. Today they are closer to running their dream restaurant than they’ve ever been.
All the indications were that the Col’cacchio at the East Gate Mall could hardly fail. They had secured a prime position at one of the entrances, the franchisor’s market intelligence showed likely turnover figures way beyond breakeven, and their financiers, Business Partners Limited (BUSINESS/PARTNERS) and the Jobs Fund through the SA Franchising Warehouse, had also given them the green light.
So the Pandays, who are in their 50s, took all their savings, mortgaged their house, put everything into the restaurant, and threw themselves into their first fine-dining restaurant after years in the fast-food industry. They followed the same strategy that worked for them in the past: Joshna, a keen cook who is passionate about food, runs the restaurant on a full-time basis as general manager while Bajith, a former teacher who also runs an education and training consultancy, keeps his day-job, and takes care of the administration and marketing of the restaurant.
There was just one snag, which ended up with disastrous results: everyone had assumed that the landlord would assist with some of the set-up costs such as the installation of an air-ventilation system so as to make the spot suitable for a restaurant. The mall management did not, however, and Bajith and Joshna found themselves with a cost overrun of more than a million rand.
The overrun led to a cash crunch, which led to delays in the completion of the restaurant, which led to the launch date shifting from the busiest time of the year - just before Christmas - to the worst month for restaurants, February. The delay into the New Year also brought annual supplier increases, and the restaurant did half of its projected sales in its first month.
Lesser entrepreneurs would almost certainly not be able to deal with the pressures of such a situation, but the Pandays proved their worth. While Joshna set up a tight and smooth running operation for the restaurant, Bajith started negotiating for the business’s survival with the three stakeholder parties: the franchisor, the landlord and the financier.
At first he tried to get all three parties into a room together, but that proved too difficult. He sat down with each and managed to convince them to give the business crucial breathing space. The landlord agreed to waive a month’s rental, and also adjusted the rent for the outside area of the restaurant. The franchisor deferred the business’s royalty payments and changed it to a flat rate, and BUSINESS/PARTNERS agreed to a moratorium on the repayment of the loan until the business was out of the woods.
Crucially, BUSINESS/PARTNERS post-loan department also agreed to link them up with an experienced restaurateur and business mentor, Roy Lailvaux.
Bajith says Roy’s involvement in the business rescue was very important. A business owner dealing with a survival crisis experiences extreme loneliness and feelings of being overwhelmed.
“You feel that you are out of your depth,” says Bajith, but with the introduction of Roy they could “speak to a person who is also a business owner, also a restaurant owner, who’s been through it, and he comes with a positive message. Firstly he is able to understand where you are - having been there himself - and then he is able to help you get out of it.”
Bajith says Roy, with his strong financial acumen, experience and wisdom, was able to facilitate a way out. It also helped that, like Bajith himself, Roy has a strong marketing focus, which made the two of them work together well in finding a way out. Roy’s ideas have all been tried and tested, and he is able to advice on their implementation, says Bajith.
The Pandays are less than a year into their start-up, and they still have some way to go before they are out of the woods, but the latest sales figures are looking very strong.
It’s been difficult, says Bajith.
Bajith is philosophical about the difficult time that they have been through, and describes it as part of the “peaks and troughs” of an entrepreneurial life. “Rather than being flattened and exhausted by the challenges, we are actually enthused by the potential.”