Another Competitor Bites The Dust

I’ve been really busy the past week preparing a new batch of flyers and placards advertising our home catering service to be distributed in Bukit Tinggi 2. That’s a large residential area with approximately 3500 homes. We heard that one of our competitors has ceased operating. He ran a small restaurant and provided catering services to supplement his income - something many cooks do. We’ve always found it difficult to penetrate this residential area because this competitor had long established his presence. With this major competitor out of the way, we had to increase our marketing and make ourselves known. Here’s a couple of things I noticed about our competitor that may have led to him going out of business :

• Our competitor was operating from a shop-lot and his rental was high. I’d guess this was why he was charging a premium for his service.
• I’d drive past his shop on my delivery rounds and always think to myself that his location wasn’t great. In fact it sucked. Situated in the last row of shop lots, his shop was hidden from view and it was a bit difficult to find the entry road into that row of shops.
• He was employing about five workers, but I’d guess that because of his location, he couldn’t get a steady stream of customers so no money coming in means he couldn’t keep paying his workers.
• His cooking area was not clean and I would often see his customers tiffins left on the bare floor - definitely a no-no by any health and food handling standards and I’d often see his delivery man smoking while sending food to his customers homes.

There are a number of important lessons to be learnt here and made us realize how fortunate we are and how much better off we are running our business just the way we are :

• First, rental cost is a very big factor in determining profitabililty. We’ve always known this and in the food business where there are at least 3 eateries in every block of 20 shops, competition is more than stiff - it’s cut-throat. So that reason alone is enough to run a business from home. We’re glad we do. No rental means no increased overhead and no need to pass the cost to customers.

  Lesson : Just because your competitor is running from a shop and you’re running from home doesn’t necessarity mean he’s better off than you.

• Location. Location. Location. Get it wrong and die… unless you deliver, which we do. When we first started out, we had almost 20 customers who picked up their food from our home, but today, there are only 5. As a home, our house is in the perfect location, but it is NOT a good business location. Fortunately for us, we deliver, so we can be located anywhere and still maintain our clientele.

  Lesson : Location. Location. Location. It can kill you if you get it wrong unless you deliver!

• One reason we have not employed additional staff is the commitment. Even though we’ve reached our goal of 50 customers, we find that just having both my wife and I running things is fine. It can be a bit rushed sometimes, but we’ve decided that we’re happy with the ways things are.

  Lesson : Whenever possible, do things yourself and don’t be greedy.

• We’ve always made it a point to keep our kitchen spotless. Just because we run a business from home doesn’t mean we don’t have to maintain cleanliness. We do things like wash our veggie 3 times and sanitizing our utensils with disinfectant. We believe that the quickest way to kill our business would be to have a customer fall sick because we didn’t maintain strict cleanliness.

  Lesson : Never underestimate your customers. Just because customers can’t see your kitchen doesn’t mean they can’t taste if your food is dirty or not.

We don’t know how many customers we’ll pick up from this competitor going out of business, but it showed us we’re doing A-okay just the way we are.

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