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Speaking during a Valentine’s Day breakfast at Café Deli in Nairobi, they said the pandemic has tested their work ethics, adding that they had underestimated the severity of the virus.

Dr Victor Ng’ani, head of clinical services at RFH Healthcare and the founding chairman of Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU), said there was a time he doubted the value of what he was doing.

“I am an experienced doctor in critical care, but Covid-19 made me doubt if there was value in what I was doing,” he said.

“When you put these patients on a ventilator and do a CT scan and you see there are no lungs, even wondering how that person is even alive, your heart sinks. It was a difficult time.”

To protect his family from contracting the virus, Dr Ngáni rented a house near the hospital, but his wife insisted he had to stay with the family.

As many doctors treated Covid-19 patients by speaking to them through a window, he opted to interact with them directly.

“Through my many years as a critical-care doctor I realised sicker patients need more direct care, so it was a tough decision that seemed reckless at some point but I had to be there for them,” he added.

Catherine Brenda, public health officer in charge of the infectious diseases unit at Kenyatta National Hospital, was deployed there since the first case of Covid-19 was reported in Kenya.

For her, handling Covid-19 was a baptism by fire, and she had to learn many things on the job.
“Understanding our health system and level of preparedness scared me and that is what created the panic – we knew it would be overwhelming. We looked at countries with good healthcare systems and how overwhelmed (they were) and we got scared,” she said.

“However, team work saw us through the fight against the pandemic.”

But, through the two years, the hardest and most painful part of her work was handling sick colleagues.

“We had colleagues who dropped dead in the line of duty. That was the most traumatising thing I have had to cope with,” she said.

Miriam Mule, a physiotherapist at KNH attached to the infectious diseases unit, said she was scared and confused when she was assigned to handle the Covid-19 ward.

She thought of rejecting the assignment but having served in the infectious diseases unit (IDU) for two years, she immediately knew she was in a much better position to serve in the Covid-19 wards than her colleagues from other departments.

“I asked for an overnight to think about it, and when I came back the following day, I had decided this is what I wanted to do,” she said.

“I was working in the IDU before Covid-19, but I thought if I rejected (the Covid-19 assignment) who else would fit in better than me.

“I was used to wearing protective gear. I felt like it would be very unfair to see someone go in there without any experience, yet there I was with two years of experience.”

Every year, Café Deli prepares breakfast for different community members. This year, it recognised healthcare workers for the two years they have spent fighting Covid-19.

“We settled on health workers to recognise their input, dedication and resilience in helping the entire nation deal with the pandemic,” Café Deli CEO Obado Obado.

Mr Obado also recognised the contributions of caregivers.

“This is a special category of people that have laid down their lives to give care to ailing families. If there is such a thing as compassion, then I believe that these people, the caregivers, are the holders of the definition,” he said.

To avoid being exposed to Covid-19 as they continue their work, caregivers did not attend the event.
But Café Deli provided meal vouchers to the Caregivers Association of Kenya.

Dr Charles Kyengo, a representative of the association, said family caregivers are often so consumed by their responsibilities that they barely get time to get out and pamper themselves.  

“You forget about yourself and sink into a caregiver’s guilt. When you buy yourself a coffee, you feel guilty that the money would have been used on drugs or the food should have been for the sick,” he said.
Café Deli’s kind gesture, he said, reminded them that they matter and are loved.

“The thought of giving the caregivers meal vouchers is a great show of love that you are there for them and is priceless,” he said.

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Social distancing, regular hand washing and wearing of masks had become the new normal and many entrepreneurs, Obadoh included, had high hopes business would improve.

Then came the third wave of Covid.

New guidelines prohibit anything except takeaway services. Evening curfew was shortened from 10pm to 8pm.

Now, business owners are groping in the dark, uncertain of what the next day holds. Obadoh is just one of many restaurant owners.

The owner of the trendy, upscale eatery told the Star he is struggling to maintain the three branches in Nairobi’s CBD, despite tighter new restrictions.

Five counties are under partial lockdown: Nairobi, Kajiado, Machakos, Kiambu and Nakuru.

“The initial closure had hit the hospitality industry so hard. It marked the end of many restaurants,” Obadoh said.

“When at first the President allowed restaurants to operate and stated that people will have to live with the disease, we knew that meant taking individual responsibility. We strictly enforced the measures,” he added.

He spaced tables, provided for hand washing and sanitiser, took temperatures and insisted no mask-no entry. EMPTY TABLES: Cafe Deli is empty after the government prohibited table services.

Cafe Deli has three branches all in Nairobi’s CBD. Obadoh said he was taken by surprise by the tighter measures on March 26.

“Whereas the measures will have adverse effects on the economy and constrain our usual way of life, they are temporary, necessary to contain the spread of the disease and therefore stop further loss of lives,” President Kenyatta said.

The impact of these adverse effects are probably not commensurate with how the new measures are intended to help stop the virus spread, he said.

“While they are well intended, these guidelines might edge out many local SMEs. The survivors might only be those with great financial muscle who can shield their businesses for a long time,” Obadoh said.

“Cafe Deli is a local brand that competes with international counterparts. I am forced to take very extreme measures to cushion my business,” he explained.

Obadoh said his business felt the pain of the new proposals immediately and the situation has worsened daily

Takeaway services, he said, are not popular.

“Many people misunderstood the President and assumed the 8pm curfew  would begin the same day.

That evening, we barely had customers,” he explained. Sales dropped from a good level to 10 per cent the next day. Currently sales are less than five per cent.

Whether he opens or not, and if business is good or bad, Obadoh still has to pay rent and pay his employees.

“As a country, we are not big on takeouts. We barely make enough yet most bills, salaries and rent remain constant,” he said.

The 8pm curfew means business hours are greatly shortened as people rush to leave the CBC, the location of all his restaurants, to get home before 8pm.

“By 4pm, people are rushing to leave town to beat curfew, and so are my employees. That means we have to close early,” he explained.

Like many employees, Obadoh had asked his employees to take a pay cut which he restored when restaurants were allowed to operate again.

“It was a tough decision for me to make,” he said.

“For some people, a pay cut as little as 10 per cent changes their lives completely. I sometimes have to chip in and help some of them,” Obadoh said.

When Covid-19 protocols were first announced in March last year and restaurants closed, Obadoh said he was forced to write to his creditors to agree on rescheduling loan repayment.

“When the economy was reopened, it was time to repay. I was well on the repayment journey before we were slapped with the additional rules, shuttering all our plans,” he said.

Cafe Deli Moi Avenue branch that had just been reopened had been closed down in July last year following a fire, adding to the pandemic woes.

The restaurateur said he is stuck as he had not finished paying  construction workers, suppliers and the bank from which he borrowed money to rebuild.

Obadoh hopes President Kenyatta will allow restaurants to operate again soon, saying eateries had adhered to the rules, most of which were part of operations, anyway.

“Some guidelines like hand washing are part of our professional standard operating procedures. We have heightened the enforcement and expanded it to ensure our clients do the same.

“We thank God because, despite regular testing, none of our staff has contacted Covid-19,” Obadoh said.

The post How Covid-19 limits are killing my business – Cafe Deli owner first appeared on News.

Solar has emerged as a favourite source of power to many homeowners due to its reliability and low cost compared to electricity.

But that is not limited to homes as businesses are also embracing solar energy.

One such business is the new Café Deli branch along Koinange Street.

When the restaurant relocated from Kenyatta Avenue in September, Mr Obado Obadoh, the Managing Director and founder of Nanjala Ltd –the parent company that owns the chain of restaurants — says he wanted to have glass roofing at his new establishment.

This, however, came with its challenges and the option turned out to be expensive since, apart from the glass roofing, they would need ultraviolet (UV) light protectors.

For humans, suntan and sunburn are familiar effects of exposure of the skin to UV light, along with an increased risk of skin cancer.

But, after consultations with experts, Mr Obado settled for solar panels.

“When we were designing the Koinange Street branch, we had experts come in and give their opinions. With the Covid-19 situation, we were also looking for ways to cut costs. With solar, we spent less money than all the other available options,” Mr Obado told the Nation.

“When the costing was done by the quantity surveyor, it came down to almost half of what we would have spent on putting up the glass roof.”
Savings important
To Mr Obado, saving even a shilling means a lot and so solar was the welcome option.

“At the Kenyatta Avenue (branch), the cost of electricity per month was between Sh250,000 and Sh280,000. Based on the plan we have, we will use Kenya Power as a backup. This means we will save close to Sh140,000 which is half of what we used to pay before,” he said.

Mr Omondi Lumbe, the electrical contractor who was in charge of the project, says he installed 96 panels on the roof that coves 250 square meters.

“The panels produce close to 33 kilowatts per hour and are in use for eight hours a day, hence produce close to 264 kilowatts daily,” said Mr Lumbe, who is a partner at Kev & Lum Construction and Electrical Company Ltd.

To avoid more spending, they opted to use solar power directly instead of using batteries to store more energy.

Today, Café Deli only relies on Kenya Power services for between three and four hours, which is mostly at night when the solar panels are off.

“We are only using Kenya Power at night for three to four hours. That means solar power will be used for most of our 12 hours,” Mr Obado said.

He also has plans to install the solar panels at his other branches on Moi Avenue and Nkurumah Lane, Behind Kencom in Nairobi’s Central Business District.
Business effects
This is, however, not the first time the businessman is opting to go the solar power route.

Six years ago, when he wanted to install electricity at his rural home in Busia, he says he was slapped with a quotation of Sh800,000.

“I thought about it and wondered why I would pay such a high figure, buy a transformer which is going to be Kenya Power’s property, and still pay them every month. I settled for solar panels and it’s a decision I don’t regret,” he said.

According to Mr Obado, the high cost of power in Kenya has rendered businesses uncompetitive compared to other countries in East Africa.

Café Deli has joined several companies, universities and factories that have turned to solar power and, in the process, cut operational costs.

This, according to Kenya Power, has dealt a blow to their already dwindling finances.

“The company operated in a challenging environment over the financial year under review, where demand growth at 3.7 per cent remained below the projected level of five per cent. The dampened demand growth is further compounded by increased threats of grid defection by the industrial category as decentralised renewable energy options are becoming more available and cheaper,” Kenya Power revealed in its latest annual report.

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• Restaurants must adhere to Health Ministry’s social distancing directive or else their licences will be cancelled.

• Some indignant customers assert that since they come from the same household, they are not a risk to anybody when seated together. A Cafe Deli branch in Nairobi
Image: ENOS TECHE

Social distancing, especially for family members, is among the challenges the reopened restaurants are facing.

Much as they would like to have the family seated at a table, the restaurants must adhere to the Health Ministry’s social distancing directive or else their licences will be cancelled.

Café Deli’s Tumani House branch, for instance, reopened on Saturday.  The manager spent most of the day explaining to adamant customers why they must adhere to social distancing.

Some of the indignant customers asserted that since they come from the same household, they are not a risk to anybody when seated together.

“It has been a challenge convincing customers who walk in together to sit separately. But laws are laws and we have to adhere to Ministry of Health directive or risk having our licence revoked,” Café Deli chief executive Obado Obadoh said.

Eventually, such customers half-heartedly agree to keep the social distance. To them, social distancing in restaurants makes no sense.

“Some of these directives are not logical. I sleep on the same bed with my wife, spend the whole day around her but when I get to a restaurant, I’m told she has to sit at another table, one metre away,” complained Alfred Maina at Café Deli.

Obadoh was sympathetic, but it at the same time said it was not easy to tell whether a man and a woman arriving at an eatery are husband and wife.

“It would be great if the government considered couples or people who live together to sit close at a table. It is, however, risky without proof that these people come from the same household,” he said.

Another challenge is convincing customers to leave restaurants by 4pm, three hours to curfew time.https://055a72f85ef7b0f9a16ee501a3a69130.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

According to Obadoh, clients do not understand why they should be shooed away three hours to lockdown even when it is explained to them that staff need time to tidy up, reconcile records and also leave for home before curfew.

“We would love to keep the customers at the restaurant till 6pm if that was possible, but there are so many reasons we insist that the last order is taken at 3.30pm,” he said.

“It takes about an hour to reconcile our records and clear for the day.  We allow our staff at least two hours to get to their houses before curfew time. We also ensure that we open by 7am,” he added.

The situation was replicated in many other Central Business District restaurants like Java House and CJs.

At CJs, some customers demanded to be let in “as there are empty seats”. Tables look unoccupied due to the adherence of social distancing requirement.

– mwaniki fm

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How did that journey begin?

Café Deli is born of a dream, risk and commitment.  I worked in five-star hotels for 15 years. I worked at Safari Park, Block Hotels (now Nyali Beach) and Sarova Hotels. While at Sarova, I made a friend that would turn out to be a godsend.

She progressed under my tutelage at the hotel and then left for the United Kingdom at a time when many Kenyans flew to the European country. Upon her return in 2004, the lady, her boyfriend and I decided to open a pastry shop in Westlands. They named it Metropolitan Limited. 

How did the three of you divvy up the roles?

I was the pastry chef, her boyfriend was the pastry artist. She on the other hand contributed about 10,000 pounds while the guy and I contributed about Sh 100,000 each. The shares were equally divided among us. But two years later, we would have a fallout.  

Why?

We lacked a plan that was aligned for the three of us. The distribution of profits led to a serious disagreement. While she wanted her share of the profit to go back into repaying the loan she had taken for her contribution to the business, the rest of us were ploughing back our profits into the business. While she was not actively involved in the running of the business, the two of us were totally reliant on the profits from the business.

Our manager also seemed to be sending inaccurate information to her, which may have made her afraid that we were trying to shortchange her. But ultimately, what led to our break up was my ambition. While I wanted them to expand and open new branches of the pastry shop, they maintained that sticking on the one we already had made management easy. 

So you had a go at it alone?

Yes. In 2007, I took my share; Sh700,000 and walked away to start anew, alone. 

Shortly after, I almost ran broke after buying a car (for Sh400,000) and using nearly Sh300,000 on house rent for four months and on kitchen equipment. But I got things in order.

Did you sink or swim?

For three straight years, I would bake and supply to many restaurants in town. One of them was Coffee World, which was along Moi Avenue. In 2010, the founders of Coffee World informed me of their decision to quit the market, citing poor business. When they said that, I felt that I knew what was ailing them.

What was ailing them?

They had made it a vegetarian restaurant. In the middle of the city, people need meat! The place was also overstaffed. I saw a business opportunity too. I made a bid to acquire the hotel even though I had only Sh40,000 in my bank account. The asking price for the hotel was sh18 million. 

That was quite a leap…

Yes it was. But I set out looking for financiers and haggling to reduce the price of the hotel began in earnest. The price was reduced to Sh14 million.

Through a friend I learnt about a growth finance company called GroFin. I presented my case and I won them over. They would finance me. They said that they believed in me because I believed in my idea. I had a clear goal of what I wanted. I was resilient, and my journey convinced them that given the resources, I would gun for everything within reach. And thus, Café Deli was born.

How long did it take to pay back your financiers?

Although I was to pay money owed to GroFin in six years, it took me only four years to do so. I then opened up two other branches in town.

Are you content with how far you have gone?

Not quite. I am collaborating with a financier because I want to expand Café Deli to 15 branches in three years.

Are you actively involved in the running of the restaurants now?

Well, I delegate a lot. I hire experts instead of acting as a know-it-all. I know something about accounting but I have to listen to my accounts manager; he is fully-trained professional in that field. I have about 105 employees. I am still working with many that I started with. They are part of my success story.

There is a vegetable supplier who I used to pay Sh4,000 a month when my business started. Now that I expanded, I need more supplies from him. I find myself paying him Sh750,000 a month. We’ve grown together. But demands are higher and in spite of our friendship, if he gives me lower quality produce, I send him away.   

What is the ultimate lesson you have learnt about entrepreneurship?  

When you enter into a partnership, understand one another’s goals. Those determine where you direct your energies. Also, the motives of some partners may not be pure. And basing business partnerships purely on trust is akin to signing a death wish. Record-keeping is of immense importance, every detail should be inked down for easy reference.

What advice would you give when getting into a business partnership with an investor?

You have skills and the investors have capital. The relationship should be symbiotic and both parties should hold their end of the deal. Draw a step-by-step growth and development plan complete with timelines and projections. Transparency, honesty and discipline are crucial components of successful partnerships. Communicate promptly and honestly always. Make decisions that do not conflict with company interests and most importantly, keep records of everything.

 And if one wants to get out?

Be flexible enough to jump out of situations that are unfavourable. A shareholder agreement we had signed took care of my interests at the time I broke free of my partnership at Metropolitan. The agreement saves the day in case of a disagreement. Also, partners must agree that one of them is in charge and is more powerful, and that he/she makes the decisions. The rest have to stand by that. 

Would you recommend employment or entrepreneurship to your son?

 I think that innovative minds should quit the comfort of employment and follow their dreams. I used to earn around Sh50,000 by the time I left employment. Now, I can own a few cars.

 Economists say that way of doing business will change post-Covid-19. How do you think your industry will be affected?

I believe robotics will be the way to go for hotels as less people will be required. Already, restaurants are grappling with offering takeaway services to customers, the Kenyan culture, being anything but a takeaway culture. People are used to eating while seated at eateries.

But here’s a new norm, and we will have to adapt. Buy food, carry it along, eat on the way. We have managed to inculcate a coffee-drinking culture in Kenya, why not a take-away one? 

The post How Café Deli chain founder navigated failed partnerships first appeared on News.

• Restaurants are required to comply with set regulations before re-opening.

On Tuesday, the Ministry of Health announced new conditions for restaurants to comply before they can be allowed to re-open.

It includes inspection to ensure compliance tables and seats spacing in restaurants and taking tests for their staff.

“It is a welcome move especially to our staff who have been staying at home,” she said.

Like at Café Deli, it was a beehive of activities for most of eateries within Nairobi as they move to observe the new government measures aimed at preventing the sprad of COVID-19.

“While it is a good move, the cost implication will weigh heavily on us,” she said, adding that “it is better than nothing.”

The service industry is among the worst hit areas of the world economy, but with the government’s directive, Muiruri says the journey towards recovery has started.

Several restaurants have started operations in compliance with the new regulations, even as many complained that they are costly, especially having to test all their employees for COVID-19.

• Ronalo Foods popularly known as K’osewe is famous for African delicacy. It is one of the restaurants in Nairobi that have resumed operations.

Already, in downtown Nairobi, business is back after a month of inactivity over fears of coronavirus, and in compliance to social distancing measures declared by the government.

Most businesses were closed or started operating on restricted hours in mid-March when the first case of coronavirus was confirmed in the country.

Health Cabinet Secretary Mutahi Kagwe has outlined strict measures for businesses to resume, particularly restaurants which will be required to limit the number of customers to 4 people for every 10 square metre space.

“Tables in the dining areas must be spaced 1.5 metres apart in the dining area or seat customer groups at least 1.5 metres apart,” Kagwe told a Parliamentary Committee on Health Monday.

The post NAIROBI, Kenya, Apr 29- Café Deli General Manager Magdalene Muiruri was all smiles when she received the Capital News crew on Tuesday, a day after the government announced that restaurants can re-open, on condition they comply with COVID-19 regulations. first appeared on News.

“It is not only our way of sharing love with the less fortunate, but also a moment when I get to spend time with children and motivate them to believe in themselves,” said Obado Obadoh, owner, Café Deli.

Obadoh said, he decided to turn a day that normally gives the restaurant big sales into a day that creates a great impact to the society. “Sales are higher than other days, but the impact made surpasses everything.”

The post Cafe Deli hosts orphans for luncheon on Valentine’s Day first appeared on News.

A few shillings for some warmth wouldn’t leave such a hole in the pockets of a good number of sharply dressed corporate men and women purposely strutting Kenyatta Avenue.

But there is a place that is welcoming. The ambience of Café Deli along Kenyatta Avenue, has been slightly warmed-up by its thematic brown and toned-down yellow on the walls and the black on the floor.

Special light bulbs on the walls and ceiling bath the room in a therapeutic setting of African skyline. It is an inviting aura distinctive of the many coffee-shops that have sprung up along almost every street and alley in Nairobi’s Central Business District.

At Café Deli, Java House, Art Café, Kaldis and others, a sizzling sound of coffee as it is crewed and poured diffusing a potent scent, mixes with soft music to make them ideal hideouts to ‘waste’ away a cold evening.

It is not only the ambience of the inside of these coffee shops that is alluring. It is also their economics.

It is simply costly- and almost foolish- for one to plunge into any of Nairobi’s major highways at this time when traffic is crazy.

However, spending on a single, double or triple Cappuccino, Espresso, Café Latte, Vanilla Latte or Mocha from any of these coffee-shops is value for money compared to the time a motorist would spend on traffic on their way back home. Or so it seems.

Moreover, for those who have recently been initiated into the cult of consumerism, it esteems them to dine in such ‘high-end’ restaurants drinking exotic beverages such as Espresso Con Panna or Macchiato. It is a mark of urbanity for Nairobi’s growing aspirational middle class.   

Coffee shops, says University of Nairobi lecturer XN Iraki, is a sign of a maturing economy.

A cause for celebration as it means the country is finally weaning itself of the shameful shipping of all its quality coffee overseas even as it leaves behind for her people such low-end quality as Kahawa Number One.

But Nairobi’s traffic menace has to be given its fair share of credit for the proliferation of these coffee shops.

Obado Obadoh, the founder of Café Deli, says that in all his three branches in the CBD, customers troop in droves in the evening. “This is because they (customers) are trying to avoid traffic,” he says. “Mostly people don’t like holding meetings in the morning. So, in the evening, they decide that instead of taking beer, why not have a sober discussion in a coffee shop?” adds Obadoh.

Nonetheless, Obado Obadoh, thinks customers return because they are addicted to coffee.

Iraki concurs with him, noting that Kenyans are slowly but surely getting initiated into the coffee-drinking culture. “It is not about traffic, coffee shops are full during the day time too.  It’s a lifestyle and a sign that more Kenyans have disposable income. Just check the price!” says Iraki.

Economists assume that every decision a consumer makes is rational. Obado Obadoh’s patrons are not avoiding traffic for the sake of it.

Valuable time and money on fuel that would have been wasted in the evening traffic with motorists exposed to marauding thugs who take advantage of the snarl up to snatch mobile phones and cut-away side mirrors would rather be spent in the warmth of a coffee-shop with friends and business partners ‘talking over a cup of coffee.’

Of course, Nairobi has not yet won the dubious trophy of the city with the worst traffic congestion- that accolade has been shared among Chinese and Indian cities. However, a 2017 report by Serbia-based website numbeo.com, ranked Nairobi second after Kolkata (formerly Calcutta) in traffic congestion.

According to the Traffic Index, Nairobians spend 62.44 minutes in traffic while Kolkatans spend an average of 68.86.

The traffic gridlock has come with its share of monetary costs.

In 2016, Government released statistics which showed that the time wasted in traffic jams represents a cost of $578,000 (Sh58.4 million) a day in lost productivity. That’s more than $210 million (Sh2.1 billion) a year.

Industrial opportunities

Generally, only between 11 and 20 per cent of formal commercial or industrial opportunities in Nairobi can be reached by the average household within an hour on foot, by matatu, or even personal car, according to the World Bank’s report, Kenya Urbanisation Review. 

So bad is Nairobi’s traffic that majority of households, according to the 2016 report on Kenya’s state of urbanisation, are ready to “compromise on living conditions to remain within reasonable travel to jobs.”

But a good chunk of Nairobi’s middle class- those who can afford to come very early in town and fork out Sh740 for a breakfast meal of Homemade Tortilla with steak and egg- have not been ready to compromise on their living conditions.

If anything, most have been moving further away into the suburbs in search of places to build, buy or rent better houses.

They have found homes in areas such as Ongata Rongai in Kajiado County, where their commute to and from work is a two-hour ordeal on traffic.

And so, instead of wasting quality time and cash on traffic jam, they have opted to spend it on a cup of coffee.

They have used this opportunity to have dates, meet friends or discuss business ‘over a cup of coffee.’

Although some of the frequenters of these coffee shops in Nairobi also engage in small talk, most of their conversations, done in low-tones, are serious.

Serious business deals – clean or otherwise, are botched and hatched in coffee shops.  

For Clifford Ochieng, an insurance sales representative and the chairman of a new association of insurance agents who lives along traffic-prone Ngong Road, 80 per cent of his business have been done in coffee shops in the evening, “because I am not an office person.”

Clifford works in an industry where impression matters and the ‘cool’ appearance of a coffee shop is just one of the ways of shoring up his image.

“When you take a client into a coffee shop, he takes you seriously,” says Ochieng.

 “Incidentally, coffee shops are less about coffee, they are about meeting, socialising, informal business meetings and standing out of the crowd,” says Iraki, noting that it a sort of conspicuous consumption.

If Patrons like Ochieng’ spend all their time in a coffee-shop explaining to a prospective client all aspects of an insurance policy, but drinking less coffee in the process, how do people like Obado Obadoh make their money?

Do they overprice a cup of coffee to compensate for the customers that come and leave when they find the place full?

Obado Obadoh says they have a special way of working around this. After all they have to pay rent and other overhead costs such as labour, electricity, and internet.

“Every seat you see here,” says Obado Obadoh, “we have given it a price.” And so, as much as you will get some people not eating or drinking, there are others who will easily pay for five seats.

Given target

At the heart of this drive is the waiter, who Obado Obadoh says is the engine of this business. “Each waiter is given target of a certain number of seats,” explains Obadoh. The waiters are supposed to squeeze as much as possible from a customer to attain their target. And this has been achieved through what Obado calls menu engineering.

When a customer is given a menu, the first thing they see is food not their prices which are written in small prints. “You have come here to eat, not to look at prices,” says Obado Obadoh.

Moreover, in the menu there are eye-catching photos of delicious dishes. This is what the restaurant wants you to buy, not necessarily because they are expensive but because it will give them the most margins.

“In fact, you will see a waiter try to prod you into buying certain foods. This is because those are the foods with the most margins,” says Obado Obadoh.  

But, generally, the profit margin for cup of coffee is just hefty.

In the end, it is a win-win for a customer who finishes his work here at Café Deli using the restaurant’s internet and the business which will extract as much as possible from other unsuspecting, uncaring customers.

The post Nairobi’s trendy coffee houses become new playgrounds for suave deal makers first appeared on News.

One of these is Café Deli and Delicatessen, with three branches that serve about 2,000 people per day. Pastry chef Obado Obadoh opened his first outlet in 2011 after convincing South African SME financier, GroFin, to lend him capital to buy a struggling vegetarian restaurant in Nairobi’s city centre.

Café Deli has carved a niche by focusing on African food. “Most restaurants in Nairobi that target the middle class don’t serve African dishes,” says Obadoh. “Our target customers are middle-aged professionals and business people. They have made their money and can afford our offerings. They want quality, but have a certain taste.

“These are people who grew up taking tea and eating African dishes. They come here and ask for ugali (staple food in Kenya made from maize flour) and whole fish. They don’t want chicken breasts and steaks.”

One would expect coffee to be the biggest selling hot beverage at Café Deli but Obadoh says his clients prefer tea.

“I have put a lot of money in our barista station but we still make more money selling tea than we do coffee. Kenyans are still tea people.”

Starting out

Obadoh worked as a pastry chef in several five-star hotels for 15 years before he quit to venture out on his own. He initially tried his hand at business with a pastry kitchen delivering to homes and restaurants.

“But the money was never enough and I wanted to be rich. I wanted to create something of my own,” he says.

Then in 2011 he found out one of his biggest clients, a vegetarian restaurant in Nairobi, was up for sale. This gave him much anxiety.

“I got scared because I knew if they sold the restaurant a new owner might not continue buying my pastries. The business from that restaurant made up for nearly two thirds of my revenues. So if I lost that one client my business would be dead.”

So he decided to bid to buy the restaurant. The owners wanted Ksh.18m and he bid Ksh.10m. They eventually, to his surprise, settled for Ksh.12m.

“I walked out of the meeting sweating. I did not have the money… I went to the bank and pleaded my case, but the bank said the best they could give me was Ksh.2m,” he recalls.

He approached various other potential sources until someone referred him to a GroFin investment manager. He convinced the firm to finance the purchase of the restaurant.

“That journey taught me the importance of taking risks.”

Growing the business

Café Deli recently invested US$1m in its newest and biggest restaurant with a capacity to sit 250 people.

The first two restaurants were financed through loans, but with the third he gave up some shareholding to GroFin in exchange for funding.

“They are in the business of selling money. If they realise their money is being paid back fast enough and at a good profit, they will give you more money,” says Obadoh. “The secret is in paying your debts. When an investor or a bank gives you their money, just pay it back. They will trust you and help you in future. Even with suppliers, if you build a tradition of paying on time, one day when you’re in trouble they’ll be willing to wait because they know you’re not a conman.”

“Also do not get caught up in trying to impress people with things you can’t afford. Don’t take all your profits and buy a big car to show off. I have been able to work with the same investor, and grow my business because I don’t waste funds trying to live a life that’s not yet mine. I believe any money saved is money earned.”

Obadoh advises entrepreneurs to invest in sectors they understand. He notes his previous ventures in farming and public transport failed because he didn’t have adequate industry knowledge.

“It is better to stick with what you know. Education is expensive regardless of where you get it. You can go to Harvard Business School and be taught what you shouldn’t do, or you can learn on the streets – and it’ll still cost you a lot of money,” he says.

“But when you make mistakes, learn from them and move on.”

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