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Why Café del Sol Are Intentionally Expanding Slowly

The Café del Sol brand has enjoyed steady growth over the last ten years — from a single store in Olivedale a decade ago to three busy and highly-regarded restaurants today. Entrepreneur spoke to the three founders about their approach to growth while maintaining superior quality.

GG van Rooyen

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Vital Stats

  • Players: Chiara Viljoen, Ryan Viljoen and Luciana Traccani
  • Company: Café del Sol
  • Contact: cafedelsol.co.za

Café del Sol has seen steady growth, but it hasn’t enjoyed the sort of rapid expansion we’re used to in this age of franchising and hyper-scaling. Ten years ago, the founders had one restaurant — today they have three. But this relatively slow expansion of the brand has been intentional. The founders have eschewed franchising in favour of a very different growth model.

What has been your approach to growth?

Chiara Viljoen: We’ve self-funded every restaurant, which hasn’t been easy. We couldn’t expand quickly, and it put pressure on our cash flow, but it gave us total control. We never intended Café del Sol to become a large franchise.

We wanted it to have an intimate feel, and we wanted a focus on food quality and hospitality. We also always said that the maximum number of restaurants we’d open was three. There are three of us, so with three restaurants someone can always keep an eye on every store. By limiting the brand to three stores, we can make sure that quality is always maintained.

Luciana Traccani: Quality has been key for us. We never wanted to compromise on quality. We took the stance early on that we’d rather make less of a profit than compromise the experience we offered. The most important thing for us was to build the reputation of the brand.

Related: 11 Secrets Of South African Entrepreneurs On Making It To The Top

What has been your biggest barrier to growth?

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Ryan Viljoen: When you’re funding a business yourself, money will always limit your rate of growth. But we viewed it as a positive, since it forced us to manage our growth carefully and not expand too quickly. That said, you need to manage your cash flow very carefully, otherwise you’ll run into trouble.

Chiara: Another barrier is finding the right people. When you’re incredibly focused on quality and customer service, it can be hard to find employees who can provide the customer experience you’re after.

How did you know the time had come to expand?

Ryan: In our case, it was largely dictated by our cash flow. If you’re going to fund your own growth, you simply need to wait until you have the money to do it.

Chiara: It’s also about trusting your gut. The business will tell you when it’s ready to grow, and you’ll just know when the time is right. For example, a location that you’ve always wanted might become available.

What do you do when times are tough and prices skyrocket?

Ryan: It can be hard. Growing the business usually needs to take a backseat, at least for a while. Price increases, especially when you pride yourself on only using the best, can place massive strain on the business. When the rand takes a dip, prices go up, but they never go back down again.

We try to absorb as much of that as possible. Only when this becomes impossible, do we pass some of it on to the customer. 

Related: 46 Facts You Should Know About Entrepreneurship (Infographic)

How do you go about managing your people?

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Luciana: With three stores, we employ a lot of people, which is why we have taken the step to hire a full-time HR person. As the founders, we’re working hard to let the managers handle day-to-day staff issues. It’s not easy, since the staff have a tendency to come straight to us, but you need to be firm, otherwise you won’t have time for anything else. We’re still involved in all three businesses on a daily basis, but we want to empower management as well.

Ryan: You need to have the right processes in place, and you need to audit things regularly. You can’t micromanage, but make sure that you always know what’s going on in the business. We check every store, every day.

How do you maintain decent margins?

Chiara: You need to look carefully at how and where you buy. It seems obvious that you should buy from a wholesaler, for instance, but that isn’t necessarily the case. For example, because we use fresh, high quality produce, we found that it’s sometimes better to buy some items from a retailer like Woolworths. Because the items have been chopped and prepped, there is virtually no wastage. So even though we might be paying more, we throw less away, which ends up saving us money.

Luciana: Also, always value the relationships you have with your suppliers. Be firm and negotiate on prices, but also understand how their businesses work and how they make their money.

Related: RocoMamas Founder Brian Altriche’s On Fabulous Failures And Visualising Success

Take note

Not every business should be scaled as rapidly as possible. Sometimes, slow and steady growth is far better.

GG van Rooyen is the deputy editor for Entrepreneur Magazine South Africa. Follow him on Twitter.

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Lessons Learnt

Give Your Business The Best Chance Of Success

For that to happen an entrepreneur must distil the business’s reason for being and then doggedly pursue that vision.

Gil Sperling

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In my capacity as a business owner and venture capitalist, one of the questions I get asked most often by entrepreneurs is, “how do I ensure my business succeeds?” While there’s no straightforward answer, there are important elements that I believe every entrepreneur must consider to ensure the greatest probability of success.

Firstly, no business will succeed if it doesn’t solve a unique pain point or problem for modern consumers or businesses. However, even if a business is able to carve out that niche, there’s no guarantee that growth will follow. For that to happen an entrepreneur must distil the business’s reason for being and then doggedly pursue that vision.

North Star metric

This principle of having a clear business vision guides all my decisions. Whenever I need to validate a choice or a change in strategic direction, or if I’m trying to determine what to focus on, I always refer back to my vision. If the two are incongruent, then I know I need to change tack.

Elon Musk is a great example of a successful entrepreneur who is guided by his grand vision. Everything he does, from Tesla to SpaceX, pertains to sustainability, both for the planet and the human race. It might be hard to make the connection when you consider his various businesses out of context, but everything he creates fits into a broader ecosystem that in some way moves the needle towards his ultimate objective. Developing Tesla cars that run on renewable energy is but a small, short-term plan that feeds into his grand vision, yet it’s also been the catalyst for the evolution of the motoring industry.

Related: The Popimedia (Mega) Success Story

Be clear, concise

In the same way, every decision an entrepreneur makes should in some way take them a step closer to realising their vision. In this regard, it is also vital that your vision is crystal clear – a murky or undefined vision will divert you off your path to success.

That’s because you’ll tend to focus on the wrong things, especially when scaling rapidly, or when running bigger organisations, because there are many tasks to complete every day. A lack of clarity also leads to poor decision-making, or, worse, decision paralysis, and that’s business suicide – I’d rather make a bad decision than no decision at all, because it prompts action. However, with a clear vision, more often than not, those decisions will be correct.

Defining your vision

So, how do you know if your vision is clear and, more importantly, relevant and consequential? The way I stress test my vision is to evaluate it every day against the decisions I take, and the direction of the business. This daily process helps to sharpen my decisions over time.

The other step is to remain open-minded enough to accept and acknowledge criticism, and take on board advice from trusted confidants and impartial experts. This is important, because you need to craft your vision based on as much information as possible, including valid criticism.

Ultimately, though, your vision for the business should align with your purpose. Forget about money and turnover as points of departure when defining your vision. These are merely metrics that can determine the strength and effectiveness of your business strategy.

For each of my several business interests, be it VC funding or ad-tech innovation, I have different visions. Each are meaningful to me, but in every instance, I don’t wake up every day with the sole ambition of making money.

While I need to make money to grow these businesses, or build something new, having purpose and vision are the ways I pull through those inevitable challenging situations. Having your vision front of mind in everything you do helps you make better decisions, and makes the hardships easier to endure. It helps you see through the turmoil, because you know where the process will lead, and you always know where the ultimate objective lies.

Read next: A Comprehensive List Of Angel Investors That Fund South African Start-Ups

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Lessons Learnt

Jimmy Choo’s Co-Founder Explains Why There Are No Small Jobs

Tamara Mellon shares the strategy that has helped her find new opportunities throughout her career.

Nina Zipkin

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The co-founder of Jimmy Choo, Tamara Mellon, believes that you can find inspiration and opportunity anywhere. All it takes is determination to keep going and a keen eye for observation.

Mellon began her career in the early 1990s working as an accessories editor for British Vogue. Always on the hunt for up-and-coming designers, she came across Jimmy Choo, a cobbler working in London’s East End.

She would commission him to create shoes for fashion shoots. They were so well received by readers that the pair realised they could expand beyond one-of-kind pieces for the pages of the magazine.

This article was originally posted here on Entrepreneur.com.

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Lessons Learnt

6 Habits Long-Time Millionaires Rely On To Stay Rich

It’s a simple fact: Most millionaires have different habits than the average person. However, these habits are far from inaccessible; they improve one’s odds of finding success but can be adopted by just about anyone with a bit of concerted effort.

Timothy Sykes

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To take that idea one step further, once someone has become successful, how do they stay successful? Here, I’d like to take a slightly longer-sighted look at the habits of millionaires, focusing not just on the habits that make them successful but the ones that help them stay successful over time. By cultivating these habits in your own life, you’ll be investing in your own sustained success over time.

Here are six habits of long-time millionaires:

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