Umer Ashraf is a young entrepreneur who owns the Glasgow-based iCafé chain of shops, as well as smoothie and juice bar Paradise Bay, in Oban, Scotland
Spending hours in front of a computer screen analysing spreadsheets and comparing the slow growth this year to that of last year is no fun, especially while being on the phone spending even more time trying to get electricity back on for new premises we just acquired. This is exactly what I have been doing for the past two weeks.
Firstly, I have been comparing the first quarter of 2009 figures to the first quarter of this year and have seen a dip in sales of 15%. However, our spending was cut by 18%, which puts us in a rather healthy position, despite the slight dip in sales. The way we achieved that was by following the classic saying "cut the fat, not the muscle". A method that works very well for me is to start with an A4 paper, write down all the extra-curricular things we are spending on, then reduce the total by 10%, taking the least essential things out of the list. Once we have a new list, we take out another 10%. This gives us an insight into all the things that are good to have, but are not essential.
Why did we just acquire new premises? Well, I have always had plans to have a central kitchen for our operation, so we have one point of control for the whole operation. Our fourth store is an ’iCafé Espressed’ store, which will incorporate a central kitchen for the chain. This way we are able to maintain a high-quality, speedy service at every store and also have more controls in all spheres of the business.
The challenge on my hands just now is to get the electricity back on. We took a tenancy on a property with a ’de-energised’ meter. After phoning around for days, I discovered that the previous tenant had some unpaid debt and, as a result, npower de-energised the meter. Of course, we all know from our experiences that a change of tenancy form, faxed over with a copy of your lease, solves the issue. But just like the banks, the utilities sector has become very strict. The banks aren’t lending, the utilities companies are exactly the same they are not helping. Even though we have the proper paperwork in place, no utility company will touch a ’de-energised’ meter and we were stuck with premises with no electricity. After spending days on the phone calling one company after another, I finally gave up and raised a complaint with the Consumer Watchdog, who advised me to try Opus Energy. After speaking to Opus, we will be reconnected, but at a cost of a £400 fee and £5,000 security deposit. Now, bearing in mind that the premises we’re moving into is only a 500sq ft unit, this is a lot of money! Unfortunately, we do not have any other choice but to go with this option as npower which de-energised it, was the previous supplier and should, in an ideal world, re-energise it simply said "No". They had a problem with the premises before and were "not willing to supply again".
We get reconnected on 10 May and we can eventually start with our fit-out of the kitchen and the café soon after, even though this is six weeks after our initial arrangement very disappointing!
The moral of the story? Make sure that if you are signing a lease, you put a clause in stating that it is the landlord’s responsibility to ensure all utilities are in place or at least connected. You should also make sure that the premises are fit for the purpose intended. We all find ourselves in a real hurry when trying to open a new store either in excitement or just to meet deadlines but it’s best to take your time and do the legal part of the process properly. This will save you money, time and hassle later.
The lesson for me is to do the deal myself next time and not leave it to one of my staff, who was new to negotiating deals. He did not check that the premises had no electricity; but, as they say, it’s never a mistake, always feedback.