I’m a serial entrepreneur and have founded tech businesses in England and South Africa. The V&A Waterfront put out a tender to build a 100% food market and my business partners and I leapt at the chance to apply our tech and IT knowledge to a market.
We won the tender on 24 September 2012, with a deadline to open by 1 December. It was a challenging time, but we managed, with support from our V&A partners.
What makes this market unique?
We’re different because we’re a hybrid model of market and retail and we’re open seven days a week. This means it’s a space for our 50 vendors to be full-time artisans and foodies who don’t need to travel between markets, and they get practical experience of operating a business.
For example, each stand has its own water and electricity meter so the vendors manage their own fixed expenses. An example of our impact as an incubator is a vendor selling bubble tea who has grown to seven stores around Cape Town’s markets.
By October 2012, word was spreading through the close-knit market community that we were looking for tenants. With the prime location, applications started flooding in and we had to be very selective about who we brought on board – we’re always looking for unique products that aren’t just aimed at tourists, but locals too as it’s an even split with visitors.
What is the appeal of markets?
People want wholesome food and they want to know its story and origin. It’s a global trend that is gaining momentum in South Africa. There are now 42 markets between Cape Town and Paarl. I don’t see that rate of growth lasting, and the numbers will stabilise in the next few years.
What should a prospective marketeer know before launching into business?
Marketing is very important. We’re able to draw attention to the market through large billboards and street posters which vendors would never be able to achieve on their own, but it’s also up to them to create a social media presence. It’s not expensive to market your offering these days.
What should vendors know about leases?
Each market is different and will have its own model, so do your research. At our market we don’t have a blanket approach as fresh produce vendors have a lower profit margin than finished food products. So some get a flat rate, while others pay a percentage of turnover. Ensure the market you’re joining has a model that will help you be profitable too.
Markets are also great starting points because there isn’t the pressure of a long-term lease. That said, you need to know and accept the terms and conditions of leasing a spot, particularly at very popular markets with long waiting lists.
How seriously should prospective vendors take their market?
Very seriously. With popular markets you need to prove that you’re passionate and able to run a successful business. We don’t just look at product offering and presentation, we insist on a business plan and interview.
What is a common mistake made by vendors?
They often miscalculate how much money they’re going to make. It takes time to build a following and the food market is tough. Cooked food is highly profitable but you’re competing with 50 other vendors for customers’ lunch money, notwithstanding external competition. You must manage your finances properly – plan for slower months so the business doesn’t collapse, and make contingencies.
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Are markets more profitable in summer?
That depends on the kind of business you’re running. In high summer this market can see 12 500, and in winter that can drop to 8 000. Summer will see light, fresh foods, drinks and ice-creams; in winter people will want heartier foods. You’ve got to be attuned to the changing seasons and customer demands.
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