IN this week's SME Focus we hear from two coffee trade entrepreneurs who expect the forthcoming Glasgow 2014 Commonwealth Games and Ryder Cup golf tournament to provide a boost for demand for the brew from visitors to Scotland.
Name: Carlos Avila and Gary Wright.
Age? 58 and 43.
What is your business called?
Where is it based?
Govan on the southside of Glasgow.
What service does it offer?
Coffee beans from our Italian coffee roaster Caffe Carraro along with associated products, such as professional coffee machines and crockery. We sold 60,000 kilos of coffee in our last trading year and are in the process of launching the Don Cortez smooth premium blend.
Who does it sell to?
Bars, restaurants, hotels, coffee houses, cafes and local government facilities throughout Scotland. Our current client list includes Italian restaurant chain Di Maggios, North Lanarkshire Council, Costley & Costley Hoteliers and Café Gandolfi.
What is its turnover?
Our projected turnover of £1 million for this year is expected to rise to £1.5 million by 2015.
How many employees?
When was it formed?
In the summer of 2009.
Why did you take the plunge?
After working in both the wholesale and retail coffee sector for over 30 years, we decided, over a cup of coffee (naturally), to combine our knowledge and friendship to create our own company.
When we heard through the grapevine that Caffe Carraro, like a lot of coffee roasters, was interested in entering the UK market and was looking around for a UK distributor, I floated the idea of setting up CG Coffee with Carlos; but that was done with a degree of naivety and I would never have done it on my own. The only way I was ever going to be able to do it was with Carlos. When establishing a business for the first time, I think it's better to have a partner with you that has knowledge and experience to help point you in the right direction.
There was a degree of good fortune involved, you need a bit of luck in business. It so happened that Caffe Carraro was at a trade exhibition in England and had spoken to a contact of ours who put us in touch with Nicola, a young Italian guy who was representing them at the show. We learned subsequently that Nicola had spent the previous three weeks learning English in order to attend this UK exhibition, so when he phoned us shortly after our initial meeting to ascertain our interest, he was nervous about phoning us in his faltering English, so was delighted when Carlos answered the phone and offered to speak in Italian!
We then decided to pay a visit to Caffe Carraro in Italy to gain a better understanding of who they were, how they worked and to ascertain if its coffee could work in the UK market.
Ultimately, it was the tasting that made up our minds to go for it.
Our existing customer base allowed us to build our own business,people with whom we'd dealt with over a number of years and who trust our judgement and respect us as business people. For the first few months, all we did was speak to customers that we'd been supplying for years and told them that we were starting our own company.
One of the first decisions that we made when we started the business was that we'd both drive vans.
Although we both drove cars at the time, we quickly discovered that we couldn't fit all the coffee and the crockery in the back seat and the boot, so we took the decision to drive vans to allow us to deliver the coffee at the same time as we were meeting with customers, thereby cutting costs. Our customers like the fact that we're the business owners, but we're also delivering the coffee and meeting our customers face-to-face. We'll never change that.
The highs of owning our own business have been the number of customers that chose to stay loyal to us and came with us when we started, whilst the lows include losing an account, occasionally if a customer goes out of business, which also means that we lose money through a bad debt.
What were you doing before you took the plunge?
Carlos has been in the coffee business for 25 years and is known within the trade for bringing Costa Coffee to Scotland. He was the front man for Costa wholesale in Scotland for 18 years, followed by a spell at Caffe Torelli, the Costa family's other business.
I have many years of experience of working with established coffee roasters like Matthew Algie and Costa Coffee. Indeed, I met Carlos when he interviewed me for a job at Costa Coffee.
I got the job and he became my boss. We worked together for the best part of two years, before parting company to pursue other career opportunities within the coffee trade, but we stayed in touch; never with the idea of being business partners one day but, when the time came, we took that opportunity when it arose.
What was your biggest break?
Securing the Caffe Carraro distributorship is a real coup, giving us a once in a lifetime opportunity to introduce a new quality coffee and brand to the UK market.
Caffe Carraro has been roasting coffee in the Veneto region of Italy since 1927 and has since expanded to over 15 countries worldwide.
What was your worst moment?
The initial start-up period was very exciting, but there was also a great deal of stress involved; you are never quite certain that the accounts will come through. Carlos's van has received one or two dents on the road, which never make for a good day.
What do you most enjoy about running the business?
Meeting potential new customers and securing deals to supply them with coffee. I also enjoy the position of being answerable to no-one other than our customers that comes with running your own business.
What do you least enjoy?
Day-to-day administrative matters, there are many people who are much better at that sort of thing than me.
The biggest bugbear for the two of us is having to go through our debtors list and chase up any customer who has taken our product but has taken longer than the agreed terms to pay for it.
The vast majority of our customers sell the product and get the cash in immediately so there's no reason for the payment terms to extend beyond the agreed contract terms. I suspect late payment is the biggest bugbear for any type of business.
What are your ambitions for the firm?
We would like to establish Caffe Carraro as a leading quality coffee brand in the UK and take it into a position where it is challenging the current market leaders for market share.
What are your top priorities?
To grow the business. Having recently doubled the size of our warehouse, we are confident that there is ample scope for growth in this market. A buoyant tourism sector helps our customers and, with an upward trend in staycations, the Ryder Cup and the Commonwealth Games set to bring many tourists to Scotland this year, there is a mood of optimism emerging.
What could the Westminster government and/or Scottish government do that would most help?
In my opinion both governments do little to help or encourage small businesses. Rather than seeking government assistance, we are focused entirely on the task at hand,to grow our business.
What was the most valuable lesson you learned?
The importance of cash flow. Cash is King in our business (as it is in most).
How do you relax?
With a nice cup of coffee.