"When I was young, I always believed that I was destined to be successful and make money, so I spent far too much believing that I would soon make it back," said Matthew Firth, 47, a British expat who lives in Dubai, as he recalled his naive and childish approach to finances, mainly because he had a privileged background.
He was well looked after by parents till his university level education. “They bought me a house to rent to others, and gave me money every month. I was a child and preferred going out and didn't manage the house properly. I didn't appreciate how lucky I was."
His naive approach to money changed when he had difficulties with his concepts while living in the UK. "I realised that you could not spend what you do not have. However, it took me 41 years of life to get to that stage."
I realised that you could not spend what you do not have, but it took me 41 years of life to get to that stage
His dad was a very successful entrepreneur and his inspiration to run his own business. His mum is very financially savvy and still active on the stock market at 78. "If I had applied my mum's slightly risk-averse nature to my dad's business acumen, I would have become more successful earlier in my life."
Food and Beverage (F&B) industry veteran
Firth had operated in varied positions in the food and beverage (F&B) industry, where he acquired skills in managing business and money.
Firth had worked in various roles, from selling soft drinks to being an Area Manager for UK-based international sandwich shop franchise chain Pret A Manger and running the restaurant brand for a Bollywood celebrity. These experiences taught him invaluable lessons in business financial management-controlling costs, investing in people, the importance of brand, and not cutting corners.
"Cost control is the key for any business, and Pret A Manger was brilliant at this. We measured sales per team member hour, conducted weekly stock takes, and had specific achievable targets recognised with terrific bonuses."
Why did you think of doing a food business?
Firth worked in the food industry since he was 13. "I couldn't imagine being involved in anything else. I understandably lost my General Manager role in a restaurant group during the pandemic and met my business partner while working as a restaurant consultant."
"We recognised the gap in the market for sourdough brioche handmade donuts with the best ingredients. We have been working on the project together for 18 months now and launched it five months ago."
What are the different expenses in running such a business?
Firth said that bakeries require a lot of upfront investment compared to other start-ups. "The machinery, fit-out, brand development, systems product development, marketing, and staff training all need heavy investment if you are going to do things properly (which we have). Coupled with this, we launched two food trucks and a delivery van, which added to the considerable cost.
Bakeries require a lot of upfront investment compared to other start-ups
"I've been lucky to meet and develop the concept with my business partner, who understands the vision, potential and, most importantly, that things have to be done properly to succeed. He has funded the Here-O Donuts project."
Firth shares two tips he learnt in his entrepreneurship journey
Entrepreneur Tip #1: Think long term and not have the greed to make more money too quickly.
Firth said most food businesses fail in their first year. "I am no stranger to failure having had to liquidate a restaurant in the UK and sell a portfolio I had worked on for 13 years."
His steak restaurant in Leeds, UK was rated in the top 3 in the country. He said, "We were busy, and things were going well, but that wasn't enough. So I put up prices and decreased table sitting times. The result was unhappy customers and a gradual decline in the business, all due to my short term view on the project.
"I'm glad it all happened, as it made me stronger and got rid of the arrogance of youth when I believed that I could win at everything I did.
"I've learnt that you need to be very focused on one product (donuts), employ people who are better than you at their roles (this is very much the case) and oversee rather than do (I always found this very hard when I was younger). I'm also so much more patient than I was 20 years ago. I have learned that success never really happens overnight."
Entrepreneur Tip #2: Whatever you buy in business has to be made back in profit.
"I always try to measure purchases in donut sales. It helps control the spending and focus on what was necessary for their plan.
"We have just purchased some TukTuks to retail our donuts and coffee - the low-cost price and relatively simple fit-out mean that they should be able to pay for themselves in 6 months in the correct location. This works as a simple model for us."
What are your views on savings and investments?
He considered long term property investment with some patience applied to it as a solid investment.
"I have learned to value the support I have had from my wife more, as she has stuck by my side through thick and thin, and I won't ever forget that.
"We have been fortunate to make some good decisions in property in the UK. My wife invested the money from the sale of her house into our current home. The value growth has been terrific. The target is to pay the mortgage off as quickly as possible and keep it as an investment for our daughter.
I consider long-term property investment, with some patience applied to it, as a solid investment.
"My daughter was educated in the state system in the UK, so we didn't have to save. But, I'm now very proud to be paying for my daughter to go to Safa Community. The plan is to build a very successful donut business so that I can look after them both properly as they get older."
Money rule: Don't spend what you don't have; buy less stuff because you want something else as soon as you've got it.
"Try to save money every month for all the problems that will inevitably come your way, and have patience in all that you do. It takes time to get things right.
"We save around 10 per cent of our income a month now, but before COVID-19 this was about 20 per cent, which saved us in some tough times during the pandemic. However, I am now lucky enough to be a partner in a fantastic business that will hopefully secure my family's future."
He concluded that enjoying every day and being grateful for family and friends is essential and truly matters.