Finding myself snowed in during Storm Emma, with Ireland virtually in lock-down, status red weather warnings countrywide, ten inches of snow outside my home-office/studio door, I am reminded of a period almost two decades ago when another Perfect Storm, this time a Perfect Storm of events, conspired, indeed collided, to kill our first business.
I feel moved to tell the story in this week’s “Coffee with Colm”…
The story begins in 1998. Everything went swimmingly at first. Life was good for a while.
That was twenty years ago when we moved as a family from Dublin to Limerick on the June Bank Holiday weekend to start a new life, as business owners for the first time, in a new city.
It was exciting and scary at the same time. In fact I will never forget how scared I was that first morning opening the doors on the business that was now mine – silly really given that by then I had been learning my craft and running other people’s cafes for nearly two decades, having fallen into the restaurant space in 1980 straight from school.
Once I got over the nerves and got stuck in however, it all came back to me, like riding a bike and our new cafe business in Limerick began to grow and thrive.
We had bought a Bewley’s Cafe Franchise (or rather the banks had) on Cruises St, a pedestrian area linking O’Connell St – the main thoroughfare – and The Milk Market in Limerick, Ireland’s third city. As the world barreled towards the millennium, the economy in Ireland was on the up, Limerick was on the up, the Cruises St cafe had been established in 1992 and so already had a cohort of loyal customers and I (fresh from a ten-year stint as a senior manager with Bewley’s Cafes, 4 of which had been spent as General Manager of their flagship, iconic cafe on Dublin’s fashionable Grafton St) knew how to deliver a quality Bewley’s experience through the wonderful team, many of whom were already in place when we arrived, so we had all the ingredients in a recipe for success.
What could possibly go wrong? Nothing it seemed. And at first nothing did go wrong; indeed business quickly grew by over 30%. We were in clover. Our decision to up sticks and relocate to the Midwest seemed inspired.
Nothing went wrong that is until it all went wrong. And very little of it, if any was within our control.
Watch the video (9 mins teaching), listen to the Podcast or read on below to find out what happened…
Prefer Podcast? Click here.
1998 was a good year for us, ’99 better again and as we tripped over into 2000 A.D. life and business seemed to be on the up for us so we hardly blinked when we noticed a slight decline in sales – turned out later on we were witnessing the first element in our Perfect Storm, Changing Customer Eating Habits.
You see Bewley’s Cafes have been around since in some form since 1840 (yes that is 18…) and as such had developed wonderful brand loyalty around its establishments which included a familiar and delicious menu that included the only two types of coffee in Ireland until then – black or white – breakfast fare to die for, freshly baked goods, real tea, real butter, etc – Bewley’s was (and is again today) the real deal.
In 2000 however, the new Millennial Generation wanted wraps and paninis, lattes and cappuccinos and Bewley’s was only beginning to offer those items, and hadn’t become credible in the space, so they voted with their feet and went elsewhere. It was a dent to all of the Bewley’s cafes nationwide, but hardly catastrophic.
Strike one for our Perfect Storm.
Then Foot and Mouth disease (FMD) struck our island. Foot and Mouth disease is a disease affecting cloven-hoofed animals and can be devastating to an agricultural economy so when there was a sniff of it in the air (in Northern Ireland as part of the UK), the Irish Government felt it needed to take action to attempt to stop it crossing the border into the South, but that was nigh on impossible, so in March 2001 an outbreak of FMD was declared in Ireland for the first time in seventy years.
To attempt to then contain it, the Government issued a directive that people living or working on farms, not travel into the cities as it is a highly contagious disease. They didn’t. They stayed at home. They were right to do so, but as a result of fewer people in Limerick City, surrounded by a largely agricultural hinterland, our cafe business suffered an overnight 20% drop in sales.
Perfect Storm, strike two.
Now we are feeling it. An overnight, albeit temporary, travel ban dropping already declining sales by 20%.
‘Houston, we have a problem.”
We had to do something. So we did. We offered wraps and paninis and lattes and cappuccinos but it proved too little too late, a bit like Titanic trying to turn away from the iceberg – Titanic almost made it but almost wen’t good enough then and isn’t good enough now.
“It’ll be alright when FMD is declared over and there is full mobility again and anyway the Yanks (a colloquial fond reference to our American cousins) are coming, sure aren’t we next door to Shannon International Airport?” I told our team. So we battened down the hatches and hung on for dear life for the ‘bounce’ in business we would receive when they landed.
And then 9/11 struck!
Where were you when you heard the news? I was in my office in our already struggling cafe when I got the call. I couldn’t believe it. Who could, in fairness?
I drove home and sat on the couch for days – literally days – endlessly watching the horrifying images on a loop on Sky News. I think I was actually depressed.
Apart from the evil I was witnessing, apart from the fact that if American Sovereignty could be so blatantly attacked in broad daylight, I think I realized for the first time our business was in real trouble – sales had remained 20% below the budget right through the six months of FMD and now the Yanks were NOT coming back. The Americans stopped flying! And who would blame them?
Perfect Storm strike three.
It was a difficult time. It was almost three strikes and your out. Almost, but not quite. We were strong, we were resilient, we were resourceful. Like Titanic we were hoping, hoping, hoping we would scrape by. So we went back to work, worked harder, worked smarter, redoubled our efforts and hoped to rescue our cafe, by this time on life-support.
The final nail in our coffin, the last and conclusive element in the Perfect Storm, the coup de grace, had been brewing all along in the background but we had failed to see it.
The Celtic Tiger as it was named by an exuberant Press was a period of unprecedented growth in the Irish economy around the turn of the century. the country was buoyant, everyone was making money, the paper value of properties was rising and rising and rising daily!
People were becoming paper millionaires based on the fact that their homes were now worth many times their original value. It was madness.
Our mistake was forgetting that the value, paper of otherwise, real or not, of property would spill over into commercial properties and so in 2002 our landlord sought and was granted at arbitration a rent increase – to €1,000 PER DAY! Yes. ONE THOUSAND EURO PER DAY. For a Coffee Shop in the heart of Ireland’s third city!
Perfect Storm, strike four!
We couldn’t survive. It was now a recovery, not a rescue mission. The cafe had failed, the only question that remained was how long did we have before she went down and what would we be left with.
It took us three more years to finally close the doors and exit battered, bruised and in a deep financial hole but we were alive.
Carambola was born from the ashes of the failure of our cafe so when asked am I happy the Perfect Storm hit, my answer is yes – I can say that today, couldn’t at the time.
Indeed you are reading this blog as a result of the Perfect Storm, because had it not hit, I would most likely be still running around a cafe instead of all the things I’ve done and opportunities I’ve had since.
“Sometimes I win and sometimes I learn” is a phrase I am known to use regularly and during our perfect storm we clearly weren’t winning – the question is were we learning? The answer? Yes.
Two things in particular were seared into my soul during that time.
The first one is we must continually be open to and out there seeking opportunity. Opportunity rarely knocks on your door as you watch TV, you must be out there seeking it. That is how I met the Man on the Train (link below), the result of which turned our fortunes around forever.
I am still constantly out there today, seeking and being open to more and new opportunities since and God willing I will never stop.
The second thing I learned is that failure is not the end of the world; our business failed, we didn’t.
Read that again. Our business failed, we didn’t.
It took us a while to get our heads around that very profound, very important statement, our business failed, we didn’t. But it is such an important lesson.
My friend, if your business were to fail, so be it. If your business has or were to fail, so be it. It is not the end of the world, it is just a moment in time. The only thing to do is get back up, as we did, dust yourself off, get back in the arena and try again.
And without being morbid about it, keep an eye on the horizon for any signs of clouds brewing that, should they come together could knock your business sideways – if Titanic had seen the iceberg sooner, maybe we would never have heard of her!
Truthfully none of the four elements in our Perfect Storm was catastrophic in its own right;
- changing customer eating habits – we could have adapted over time, had we had time.
- FMD – had a finite life expectancy – we could have weathered it.
- 9/11 – the Yanks would come back eventually.
- Rent increase – the toughest one but we could have reinvented ourselves and our business model to cope – a retail offering (New Look) took the lease and is stil trading there today.
It was the convergence of the four in the same time period from 2000 to 2002 that caused it to be fatal.
I am grateful for where it has led since.
Take care out there as Storm Emma abates.
See you next week for a great story about 4 lads, a Renault Scenic and a drive… from Dublin to Moscow! You won’t want to miss it…
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MORE. Some of the issues touched on above have been discussed in earlier “Coffee with Colm” Blog posts:
- The Man on the Train – the meeting that changed my life! Click here
- Sometimes I win and sometimes I learn Click here
- How we kept our suppliers on board as the Cafe was failing Click here.
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Thanks for thinking with me.
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