Here are seven of their lessons.
Start out small and mobile
More and more entrepreneurs are roadtesting their concepts as street food or pop-up operations. These models help to assess the potential of a business idea and refine the concept with support from others. Incubators of new businesses include street food collective KERB, which supports dozens of traders at London venues including London Bridge, King’s Cross, the Gherkin, St Katharine Docks and West India Quay—and, as of September, at a major market at Seven Dials.
Head of development Ollie Hunter said around three quarters of KERB traders started out with less than £15,000 of capital. Not all of them will make it, but it’s a relatively low-risk way to get started before opening permanent locations and, in some cases, rolling out. “They might not have many assets [at the start] but hopefully we’ll help them get there,” he said.
Learn from the big brands
All start-ups emerge with passion and an independent mindset, but there are lessons to be learned from much larger businesses too, said Grind CEO and co-founder David Abrahamovitch. Having opened his first site on Old Street roundabout in 2011, Grind is now up to 11 locations, and has combined the best of both the indie and corporate worlds.
“We wanted to take the things that the big chains do really well—speed of service, consistency of product, hygiene, not alienating people… but also the things that independents do well—young passionate staff, amazing quality of product, the best machinery—and marry those two together in a fun, loud and cool environment,” he told Peach 2020.
Be ready to flex
Grind started out as a coffee business, but soon added a cocktail and restaurant offer. Now it’s diversifying further with a roastery, retail products and more. “We’re trying to build more layers into the business,” said Abrahamovitch.
This ability to move fast is one of the big strengths of entrepreneurs, he pointed out. Having started in the tech world where changes could take months or even years, he enjoys the freedom to make snap decisions. “I really like how quickly you can iterate. Obviously as you get scale it becomes harder—you can’t think of something in the morning and then do it in the afternoon. But there’s something great about the speed you can evolve in hospitality.”
Get the location right
Love Lane’s founder and CEO Stephen Crawley had an even more unusual route into hospitality: he was a professional cricketer before starting out on his own. When he did, it was with a small brewery in what he called a “horrific” location in Liverpool. After pounding the streets to find a better place, home is now the city’s vibrant Baltic Triangle—a much better fit for the brand, and with the footfall needed to make an impact.
Like Grind, Love Lane has evolved fast, with help from the Enterprise Investment Scheme, and it now has a wholesale operation, bar, restaurant and distillery as well as brewery. The old adage of ‘location, location, location’ has been spot on in his case.
“If you’re going to build a brand from scratch your home has to be fantastic,” he said.
Max the dayparts
With property costs so high, it’s important for new businesses to make the most of every hour of the day—and Grind has been a model of that. “We realised we were kicking people out at 6pm which was nuts,” Abrahamovitch said of the brand’s move into other dayparts. “Coffee’s still at the heart of everything we do, but alcohol is the biggest source of revenue now.”
It feeds into the evolution that every start-up needs, he added.
“We try new stuff, iterate change, do more of what’s worked and forget about the things that haven’t… it’s part of the journey towards figuring out your brand values.”
Show your intent
New businesses seeking funding need to prove their Intent, ambition and willingness to learn, the 2020 panel agreed. “With some businesses you can see they have the next three to five years worked out,” said KERB’s Ollie Hunter. “We’re looking for people who are smart enough to see the parts of the business they need to improve, or find out how to do it, rather than someone who is arrogantly pushing their idea up a hill on their own.”
CGA’s data shows that consumers are more demanding than ever, and if they get a bad experience they won’t come back. That means new businesses have to be resolutely focused on delivery, and can’t afford to switch off for a second. “You have to be really good single every day,” said Abrahamovitch. “Expectations versus spend per head are unbelievably mis-calibred. It’s really challenging—but there are still opportunities for the right brands doing the right things.”
CGA’s Peach 2020 Conference was supported by platinum partners Asahi, Bookatable by Michelin, Caterer.com, Coca-Cola European Partners, Coffer Corporate Leisure, CPL Online, Diageo, Fourth, Groupon, Omnivore and Zonal. Network partners were Casual Dining, Chapman Ventilation, Fishbowl, Freeths, Garden Gourmet, Majestic Commercial, Reynolds, RSM, Shield Safety Group, and Yumpingo.