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Smelling the coffee 2005-08-01 08:05 Imagine sitting on a comfortable sofa beside a large window at a coffee shop, sipping a steaming cup of delicious Jamaica Blue Mountain Coffee, enjoying the sunlight, oblivious to the hustle and bustle outside. And all this on a Monday. White-collar workers with a hectic work schedule can only dream of this but Xie Baodong is living his dream. The 40-year-old recently left a worldwide public relations firm where he had toiled for five years to fulfill his coffee dream. He has opted for an entrepreneurial venture where uncertainty is the hallmark - and is now the owner of a coffee shop on the first floor of a big office highrise. Bravely, Xie quit his job at the Beijing branch of Ogilvy Public Relations, where he had a nice working environment and an attractive monthly salary of 20,000 yuan (US$2,469) but it came with all the attendant pressures. He invested his life's savings - 300,000 yuan (US$3,7037) on his shop, a franchise business that goes by the name Jazz Island Coffee. The investment includes equipment, furniture and six months' rent. Xie admits that running the 100-square-metre coffee shop is a big challenge. "I have never been in the coffee business before. Everything I am doing now, I'm trying for the first time," he confesses. Xie chose the coffee business because he himself is hooked on to the drink. "I drink coffee. And I like the coffee culture." He also saw the large market potential in office buildings for the beverage and accompanying products. "When I worked at Ogilvy, every restaurant and coffee shop in our office building was packed at lunch time." He thought of Starbucks and UBC Coffee, but they were either not open to franchise agreements or had a high financial threshold. Jazz Island Coffee, a French coffee group, offered to waive Xie's franchise fee, since it was its first outlet in Beijing. Talking about the pressure, Xie says: "Every day when I wake up, I owe people 2,000 yuan (US$246.9) even before I get out of bed." He is referring to his daily outlay on rental, wages to five employees and overheads. The daily income in the first few days averaged only 600-800 yuan (US$74-99) per day. Half the shop's revenues came from selling coffee, and the rest from fast food at lunchtime. The price of coffee varies from 28 yuan (US$3.5) to 65 yuan (US$8) a cup; a business lunch is about 30 yuan (US$3.7) each. It is only a fortnight since the shop opened, so there is still not the steady stream of customers he'd like to see; and Xie hopes daily expenses can be covered so that his initial investment can be recouped within a year. "I don't think it will be that difficult to achieve," he says, adding: "If one customer spends 50 yuan (US$6.2), then just 20 customers can help me achieve my goal." Having been in public relations field for so many years, Xie is running his own promotional campaign for the shop. "I will organize staff gatherings and promotional parties for companies and organizations. I will regularly hold blind-date parties for singles on weekends when the shop is not busy. "So, with all the activities, the business will do well gradually," Xie says, expressing confidence in his ambitious plans for the long term. "I want to open two to three such shops within five years." He explains that the next ventures will be started with friends, and his management experience would be part of the equity he would hold in the new shops. Xie is also prepared for possible failure. "I could always go back into public relations," he says. He says that he has a real-estate mortgage of over 4,000 yuan (US$494) at the moment. "I put half-a-year's mortgage payment in my account in case I don't have money to pay if the business goes bad," he says. (China Daily 08/01/2005 page6) |
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