Ask Fats Lazarides about his childhood and he’ll tell you that the Greeks he knew in South Africa grew up in corner cafés. A close-knit community, the kids would meet on street corners and the family cafés after school and before their turn behind the till, and they’d talk business.
Yes, business. Not girls, or even cars. And even though his dad was a carpenter and not a café owner, Lazarides was no exception. They’d scrape their change together, buy loose cigarettes, and gather to discuss the take-away down the road, weighing up what they’d do differently if it was theirs.
They debated why certain menu items were chosen, and which was the most popular and why. And always the conversation came round to one key point: If it was mine, what would I do differently? How would I make sure people came to my store, and no other?
These were the earliest seeds of what would eventually become Ocean Basket: A young kid, dreaming up the perfect restaurant. What separates the entrepreneurs from dreamers is the ability to take that vision and make it a reality — even when the odds are stacked against you.
Lazarides’ shot at his dream store seemed like a gift. But as is so often the case with start-ups, the idea and the reality were worlds apart — and yet he made it work. Through grit and sheer determination, he has built a seafood empire even though the first store encountered so many restrictions it’s a wonder it was able to trade at all.
The trading restrictions were impossible, but we went for it anyway
But let’s rewind a bit, to Maritsa Lazarides, Fats’ wife, spotting the For Lease sign hanging in the Biggie Best in Menlyn Shopping Centre. It was 1995, and the soon-to-be-vacant store was only 118m2, with a 40-strong waiting list in a centre that had promised its restaurant tenants there would be no more food-related stores opening in the centre.
Lazarides knew none of this. He had been looking for a great location to start a seafood restaurant. This was it. It seemed like a gift, and impulsive as always, he resigned from his position at his brother-in-law’s Spar then and there, and went in search of the centre’s manager, Yuri Hausman. He knew there’d be interest in the store, and he wanted it to be his.
It didn’t occur to him that there’d be restrictions on what could and couldn’t happen with the space, or even if the centre was interested in his idea. Reality came rushing in when Hausman’s first question was whether he had a business proposal.
“Yes, but it’s in my head, I’ll have to talk you through it,” said Lazarides. He should have gotten the boot then and there, but his confidence intrigued Hausman, and instead the two spent an hour together in the centre manager’s office. Hausman smoked a pipe, Lazarides his Camels, painting a picture of the restaurant he wanted to create, and his past experience in the food business.
He was 32 years old and had start-up capital of only R800, but he had a plan for that too. After about a thousand questions, Yuri agreed. “How quickly can you get to Joburg to sign the lease?” he aske Lazarides.“Immediately,” was the reply.
The euphoria of managing to secure the lease was short-lived. Hausman agreed to give Lazarides and his brother George a chance, but there were restrictions — a lot of them. Hausman had to keep his other tenants happy, and Ocean Basket was going to pay the price.
They could only serve five proteins (kingklip, calamari, prawns, sole or linefish) and two starches (chips or rice). They weren’t allowed to serve salads, desserts or coffee, but they could offer Coke, Tab and one fruit juice, and one red and one white wine by the glass. And they weren’t allowed to compete with the dinner trade. Doors were closed by 7pm. No exceptions.
It was also a very small store. 118m2 gave the brothers just enough room for six tables, a fish counter, and a tiny kitchen. The location was great, but most entrepreneurs would have weighed up their dreams against the realities the brothers were facing, and decided to wait for the next ‘perfect’ spot.
And that’s what separates the men from the boys. Ask any true entrepreneur and they’ll tell you the same thing: Anything great is worth fighting for. It’s not about feeling overwhelmed by the challenges. It’s the thrill of finding solutions, and making them work. For every restriction, Lazarides and his brother George found an advantage. And the rest, as they say, is history.
We didn’t have the start-up capital we needed, but we made it work
Instead of focusing on what they couldn’t do, they focused on what they could do. Lazarides needed to find ways to get feet through the door, and people interested in the brand — at a very low budget. He and his brother had a small percentage of the start-up capital they would need to get the store up and running, and four weeks to open their doors.
So, how do you start a business with limited funds? You keep things simple, get creative in your approach, and figure out where you can get help and support. Lazarides had great contacts in the building, shop-fitting and catering supplies industries. It was time to use them. Never afraid of hard work and the product of a single-parent household after his father passed away, Lazarides had learnt his fair share of trades over the years.
“If your reputation is solid and people know that you stick to your word, it’s amazing what you can achieve. We had contacts with building suppliers, shop-fitters and in the food industry, and we managed to convince them all to let us pay for materials and their services with post-dated cheques. Each month our suppliers would cash the next cheque, and the only way it wouldn’t bounce was if we had made enough money to cover those debts,” says Lazarides.
It was a strong driving force to succeed. It’s also how each of the early stores in the chain was built. Ocean Basket’s reputation in the industry was so good, that only 30% up-front capital was needed to get each successive store off the ground. The rest was paid back through regular trading.
“We were famous for PD cheques. Big catering companies held debtor books of between R2 million and R3 million in PD cheques — but our partners could build a store that cost R250 000 to set up with just R60 000.”
So, they had a store, but the real magic would be with the food. A limited menu didn’t matter as long as what was on offer was excellent quality, value-for-money fare. The brothers were less interested in building wealth than building a brand, and their pricing reflected this.
“We took a simple approach to our pricing. If 1kg of hake equalled four portions, one portion would go towards rent, one to expenses, one to staff and one to the business,” explains Lazarides of their original business plan. “As long as the expenses portion covered the next kilo of hake, the price point worked. This meant we could charge R10 for hake and chips. We didn’t drive up our prices to make a higher profit margin. We kept things simple, and focused on getting feet through the door.”
In the early days, what we really sold was the experience
“We were told we couldn’t trade at night and compete for the dinner trade, so we cornered the lunch-time trade.” Meals were cooked and served quickly. Bar stools set up against the wall saved space and let single shoppers eat without feeling lonely. “We had customers who ate with us four times a week.”
This grew to include families who would deliberately eat an early dinner before the store closed. “An entire family of four could eat for R60 because we let them bring their own salads, wine and even desserts,” says Lazarides.
“People arrived with cooler boxes. We added olives, feta and fresh bread to the menu, but we accommodated people bringing their own additions. We fetched coffee from the Facts & Fiction bookstore nearby. It made the whole experience a bit of an adventure. Customers loved it, and we ended up with very loyal clientele.”
Because the restaurant was positioned as a cheeky upstart, Lazarides could decorate the store accordingly. “We only really served seafood and a starch, so we chose pans to cook and serve them in,” he explains. “Pans were cheaper to purchase than big plates, saved on breakages and will last forever.”
The limited menu kept wastage to a minimum. When choice is curbed, you can stock fresh seafood and know that you’ll serve most (if not all) of the day’s ‘catch’. For Lazarides, the secret sauce was in the seafood — how fresh it was (in this case, fresh and unfrozen), how it was prepared, filleted, cooked and finally presented. If they got that right, the rest would follow.
“The restrictions placed on us actually let us focus on what really mattered, without distractions. Without wine, desserts, a large menu and a big store, we needed to make sure our seafood was really, really great. It narrowed our focus and gave us a recipe we have maintained 150 stores later.”
It’s a home-grown, bootstrapped success story, but it hasn’t been without its challenges. “I’ve never known when to stop,” says Lazarides. “Building businesses is what I love. Once the Menlyn store was working and we had proven the formula, I hit the road. I travelled so much my son barely knew who I was,” he admits, adding that he has changed his focus with his second child, having learnt some hard lessons in finding a work/life balance.
“One thing I believe, and which has always held true in this journey, is that things don’t happen by accident, as long as you’re always moving forward. From the beginning we have aggressively chased success, not cash. This has meant we have lost money along the way, but as long as I kept my eye on the ball, those losses worked out in our favour. Don’t chase the money. Chase the dream.”
Taking the knocks… and getting back up
Ocean Basket sounds like an entrepreneur’s dream: Building a business with minimal start-up funds, paying suppliers with post-dated cheques, and enjoying huge growth. But that doesn’t mean expensive mistakes weren’t made along the way. The decision to franchise the brand was the result of one of those mistakes.
“As the brand gained traction, we got a lot of people asking about franchises. We were happy to open stores with partners, but they could never have more than a 30% stake. At first, this worked well. The first businesses of a lot of young guys from our community were Ocean Baskets. This continued until we had around 50 stores, and then things started changing. Many of our partners started selling their shares, moving into different fields. Instead of bringing in other partners, we hired store managers, and shrinkages and wastage skyrocketed. Something had to change.
“In 2002 I made the decision to completely change our business model. We sold all of our stores, including the crown jewels. We hand-picked the franchisees, starting with our existing partners and moving out from there. We needed people in-store who really cared about the business. It was an expensive lesson to learn, but because we kept our eye on the prize, which was to really grow the brand into an international name, it paid off. It took two years to convert all the stores, and we’ve enjoyed exponential growth since.”
- Company: Ocean Basket
- Founders: Brothers Fats and George Lazarides
- Launched: 1995
- Start-up capital: R800
- System-wide sales: Over R1 billion
- Contact: +27 (0)11 655 1300, www.oceanbasket.com