"To be a market leader, you must be prepared to try and cope with the disappointment when things don't work, think out of the box, and be brave," UAE-based New Zealand expat Kim Thompson, 59, recalled the values and beliefs she developed after being inspired by her father's advice to work hard.
"My father disagreed with my mother working, as he considered her primary job was the family and home. He also didn't believe in credit cards or loans, he worked hard and managed his financial responsibilities, stresses, and disappointments privately, but he was very cautious and safe."
Thompson is not risk-averse but loves challenges.
She didn't grow up in a privileged or wealthy family or a family of entrepreneurs. "I felt lucky to have had my upbringing where my parents looked after essential needs. We lived in a small town Nelson, South Island of New Zealand with 30,000 (population), on the coast, with beautiful beaches, mountains, and national parks."
"We had many freedoms, and there was lots of fresh food, clean air and water – an excellent place to raise a family. We didn't have international holidays, but I rode horses, did lots of other sports and had a happy middle-class upbringing."
She loved horses, and her family bought her a horse. "We rented land, and I competed in 3-day eventing. This is not a cheap sport, and I was so grateful to be able to pursue this passion as I knew what it was costing my parents both in money and time."
She didn't receive pocket money but occasionally did babysitting to earn pocket money.
I would live daily, spending all my salary in the first half of the month. I knew nothing about budgeting, interest rates or saving.
Thompson was an oncology nurse, a specialised nurse who cares for cancer patients, before becoming an entrepreneur.
She left home at 15, desperate to escape and explore, and spent nearly four years in the old system, hands-on training starting in the sluice room to become a registered nurse. "I was completely unprepared for the adult world.
"I would live daily, spending all my salary in the first half of the month. I knew nothing about budgeting, interest rates or saving. I cringe when I look back at how cheaply I could have purchased a home, for example, but happily paid rent," shared Thompson.
"I learnt about money the hard way, living from pay cheque to pay cheque, but even at an early age, I was aware that I wanted a different life to explore and travel."
Thompson's foundation in her youth years gave her hints on how she should not have lived.
"It was only after completing my nursing and backpacking around Southeast Asia through India, Nepal, Tibet, Mongolia, and Indonesia that I woke up to recognise that I had opportunities from where I was born that many other women didn't have. It would be criminal to waste these opportunities."
Thompson moved to Dubai in 1997 with her husband, then a full-time mother of three young girls, and didn't work for several years.
Her first experience was running a café inside the old Jebel Ali Sailing Club in 2005.
"It was a bustling café, and I had no previous food and beverage (F&B) industry experience, so I learnt on the job, navigating suppliers, finding the right team, retaining them, managing customer experience and always, cash flow. The café was financially viable but the most challenging job I have ever done."
With the development of the Dubai Marina and JBR, the sailing club was closed, and I suddenly had time to reflect and decide what I wanted to do. During the operation of the sailing club, I had been unable to source locally roasted good, quality coffee or find any support for our baristas or equipment. So I had identified a market gap and had the confidence to begin my own business, RAW Coffee Company, in June 2007.
What were the different expenses needed to start this business?
To start a Limited Liability Company and get a trade license in 2007, she said she needed Dh300,000 and a rental agreement. She self-financed the business using her savings.
"I registered the name, found a company to design a logo, devised a business plan, and fitted the warehouse with an office, green bean storage, roasting and packing facility and meeting spaces. I bought the manufacturing equipment, espresso equipment and small stock, hired the first team to join me, and recruited a consultant.
"The initial Dh300,000 required to open the company became our working capital to set up the business. I took an additional Dh300,000 through a bank loan, did not take a salary for the first five years and reinvested any money we made into the company."
Matt Toogood joined Thompson as a business partner at the beginning of the third year, and he is now a 50 per cent partner in the business.
He, too, worked without a salary for three years, and they concentrated on knowledge, growing organically, and building a robust ethical supply chain and foundation for the company.
Thompson's business, since the start, had a constant stream of mistakes and oversights.
"We made multiple mistakes like choosing the wrong location for the first manufacturing plant (DIP or Dubai Investment Park), employing the wrong consultant who repeated operating procedures, recipes, and processes from a previous employer and had no local knowledge or deep understanding of roasting or coffee," Thompson said.
They faced multiple delays that meant the first employees had very little to do. "We had no way to roast our green beans, so we would buy cheap coffee from supermarkets and set up a commercial espresso machine in our kitchen so we could at least do barista training.
"Then another new, better-financed coffee business sabotaged our early operation, discrediting us in the market in our early years while we tried to establish our reputation," she added.
"It had lots of investment and no fundamental knowledge; I was effectively ahead of them as I had the warehouse, roasting equipment, and a consultant. However, they counter-offered the consultant more money, which meant I was left to teach myself how to do everything.
We made multiple mistakes like choosing the wrong location for the first manufacturing plant, employing the wrong consultant etc.
"I would never choose to repeat our early years, trying to run a business without enough cash and constantly being hand to mouth. But it allowed us to learn every industry detail as we had to do the jobs ourselves. This gave us a solid foundation to build the company, as we held in-depth knowledge of every aspect of our speciality industry."
Lessons Thompson learnt during her career, entrepreneurial journey
Lesson: Love what you do but budget and be prepared to have more cost then initially expected.
Thompson started her professional journey late in life, in her 40s; once, her three daughters had grown up. Before that, she had done part-time jobs, then worked in the café, but never a business.
Her friends, who owned their own companies, often told her to expect things to take much longer than predicted and cost more.
She admitted that during the first 18 months she was constantly putting out fires. "The setup costs were three times what I had budgeted for, and no money was coming in."
It was a very tough start for her, but she said a few things she got right. "I had chosen to play in the right niche of the market with high-quality speciality-grade Arabica coffee, and my timing was perfect.
"I like to ignore what happened to me in the past. Each time something detrimental happened, I learnt from it and to not repeat those mistakes or poor judgements. As an entrepreneur, I would not advise anybody to begin a business without three times the planned initial investment," Thompson added.
Lesson: Reinvest profits into your business for organic expansion.
Once Thompson’s business started to sell products and make a profit, she and her business partner reinvested in purchasing better and more green bean stock, while also employing key people with better skills in certain senior positions.
"We had no investment in the early days as we were a risk and no one wanted to lend us money. Access to trade finance was not possible at reasonable interest rates – so we grew organically, having complete control over our destiny," Thompson explained.
"I don't believe, especially with the challenges of the last two years with COVID-19, that many small and medium-sized enterprises (SMEs) have had the luxury of worrying about investments. It has been more fundamental than that, worrying about our team's financial viability, obligations and responsibilities, and business continuity.
We had no investment in the early days as we were a risk and no one wanted to lend us money.
"We were expecting to be hit from the health crisis, and we are starting to see this now with increased costs and have shifted into another gear, knowing we will have to be very dynamic and resourceful over the next year. We also started two new businesses during COVID-19 that were self-funded with other supporting products in the food and beverage coffee space."
She follows an old-fashioned strategy to make a property investment. "I have built a beautiful home in Bali as an investment property but don't have the right understanding of cryptocurrencies, NFTs (non-fungible tokens) or Metaverses."
"I am planning on buying a home here in a new development next year, but honestly, we are still reinvesting back into scaling our company and have ambitious plans for its future," she further revealed.