Business rules to live by from Coffee Republic’s Sahar Hashemi OBE
"I used to think that to be an entrepreneur you had to have a magic chromosome" - Hashemi shares her success story...
Before the likes of Starbucks and Costa Coffee were a mainstay in the UK, there was Coffee Republic.
Founded in 1995 by Sahar Hashemi OBE and her brother Bobby Hashemi, the coffee chain emerged out of an idea to replicate coffee bars in New York that Sahar had fallen in love with during her travels.
This trip to the Big Apple – where Sahar developed a penchant for tall cappuccinos – would prove a fruitful one as the business she later co-founded would evolve to operate 110 stores and generate £30m turnover before Sahar's exit in 2001; a decision she now describes as “emotionally taking a toll”.
At this week's Sage Summit UK, Sahar spoke candidly about her business story; going from start-up to scale-up despite “never wanting to become an entrepreneur”, and revealed six business habits that she lives by.
Read on to learn about Sahar's journey from tourist to exited entrepreneur, and scroll down for her six essential business lessons…
Finding the magic entrepreneurship chromosome
“I would never have said before that I was an entrepreneur. There was only one entrepreneur [in the public eye] when I was growing up and his first name was Richard, surname started with a ‘b'!
“It was the whole idea that unless you dropped out of school, unless you sold sweets in the playground, you didn’t have an ounce of creativity in you or leadership. Entrepreneurship felt like this magic chromosome that some people had and others didn't.
“I thought that I wasn't the entrepreneurial type or the creative type so I had no intention of starting a business, I didn't think I could, until something happened. I went to visit my father in New York where he was working at the time and I'd woken up with jet lag and I wanted to go and get myself a cup of coffee.
“I assumed that, as I was in America, I was going to get rubbish coffee – people would make fun of American coffee for their diners and black liquid. Well, I was looking for one of these and I chanced upon the smell of ground coffee beans. I followed the smell and came to this great coffee bar; it offered skimmed milk, soy milk, various toppings, and sugars. I fell in love.
“I came back from London and I was sitting with my brother in a Thai restaurant and I [was telling him] that I wish we had those New York-style coffee bars, there's nothing like it here – all I've got is the kettle and two scoops of Nescafe and I wanted to be back at those coffee bars.”
The lightbulb moment
“You hear about entrepreneurs having lightbulb moments and [this was it] for my brother. He said it was an ‘amazing business idea […] there's Starbucks and they're a company in Seattle and they're said to be growing outside of America'.
“Now that you've said it, this is a great business idea, we should go into business together and start this up in the UK. My reaction was ‘Hang on, I think you've got me completely wrong! I actually meant why doesn't somebody else do it and for me to go to it. I don't understand why, as a customer, I have to provide a solution to my own problem!'
“My brother was having none of it and said ‘Okay well I'll pay you to do some research for me'. So I did that.
“The following day I got on the Circle Line and I got off at every single stop along the line putting myself in customer's shoes and trying to find a good coffee bar. I remember thinking later that night; ‘There's nothing like that. That was the night I thought ‘I'm going to be an entrepreneur' – that was the start of the journey inspired by my brothers' lightbulb moment.”
Taking the leap – and a net appearing
“We took the leap into entrepreneurship. My belief is that you leap and a net will appear.
“Everyone said ‘no' to us, everyone thought our idea was crazy, including every supplier we spoke to. We went to 39 bank managers and only the 40th bank manager said they would give us a £90,000 loan to open a coffee bar, because the 39 that rejected us said we were a nation of tea drinkers and we'd be crazy bringing coffee here.
“We had to bootstrap and be extremely resourceful. We couldn't even find employees to work there because all of the offers that we got were people used to working in greasy spoon cafes.
“We ended up opening the doors to our coffee bar one year after we'd had the idea. Now, we all know about the huge coffee bar craze; by 2020 they estimate there will be 20,000 coffee bars in the UK.
“I don't believe in overnight success. We opened the doors and no-one came in. We had to make sales of £700 a day to break even but for the first six months we were only making £200 a day.
“We were clueless, we were outsiders, we just did everything that we could to grow customers.
“The following year we opened one more store and I remember thinking ‘oh we're getting to be a big chain now'. But then we went to seven stores, 30 stores, 60, 80, and, by about 110 stores, we had become a big company.
“We then thought ‘now we're a grown up business, it’s time to hire great people with great CVs and experience' but the problem is we'd become a big company and had lost that spark we had at the beginning. We weren't customers ourselves anymore, we were very corporate.
“Sometimes entrepreneurs feel like have a sell by date and that it's time to go. We (Sahar and Bobby) both sold our shares at the time and we left and it was really sad. Emotionally it took a toll on us; leaving a business we started because we absolutely loved it.
“I learned a big lesson leaving the business I had started because the market exploded and we didn’t leave the company with the right tools, we didn't keep the start-up culture and we'd grown out of the start-up mentality.
“My biggest lesson then? Act small no matter how big your business is or how big it becomes, maintain that start-up mentality”.
6 business rules to live by
- “Make it all about your customers – see your business through your customer's eyes. Think about delighting your customers, it seems like a flaky word – ‘delighting' but it's a powerful thing to do as when you think this way all the great opportunities come in to view.
- “Get out of your office. Don't get stuck down with paperwork, there are so many technology solutions that can [do that for you] and if you're not getting out there, you're not seeing what your customers see.”
- “Be clueless. When you start a business and you have no idea, it's the biggest advantage because you're not contaminated by how things are or this is how we do things. Be like a big kid ggain, don't be afraid to ask questions – adopt an outsider mentality.” with how things should be done.”
- “Experiment and bootstrap. Be resourceful and try new things – innovation is all about trying new things, you're going to make a fool of yourself but allow yourself that.”
- “Give yourself a licence to fail. When we start a business, we're not perfectionists and we're not terrified of failure. We become more afraid of failure as we build a bigger business but the only way to avoid failure is to do nothing; it’s no option.”
- “Be 100% yourself – you don't have to become all corporate and be an automaton. It's all about having your head and heart in the business and having fun too.”
Remember: “We’re in a rapid pace of change, it brings a lot of challenges but the opportunities are huge. Next time an opportunity comes along and your mindset is right, you're grabbing the opportunity and you're taking the leap and I can guarantee a net will be there to catch you.”
Sahar Hashemi was speaking at the Sage Summit 2017 UK on Thursday April 6. Learn more about the Sage Summit here.