Esmeralda De Souza

SPEZ is a combination of names: Spencer and Esmeralda, a very Kenyan thing to do. Initially, we were called Customized Catering Services Limited. Then we rebranded. We started unofficially about 10 years ago, and officially eight years ago. I started from home. I had had my son, who was very young, whom I had when I was also very young, 19.

By starting this business from home, I thought of it as a way I could support my son. I started with baking – cookies and trying to sell them at a cafe nearby. Then the lady asked me to make black forest cake because she said everyone loves black forest cakes. I was like, ‘Okay, I’ll find someone to teach me how to do it and then I can sell them to you,’ so I did that.

I called a friend of mine who was in cooking school at the time, his name was Spencer and he had been studying culinary arts. I knew he probably knew how to make a black forest cake. He came home and taught me and then I started selling them.

I sent sms’ to all my friends and family saying, ‘I make black forest cake, please order from me.’ At the time I was selling it so cheap, at 1,000 bob because I didn’t know anything about costing. I was using my mom’s flour.

Then one day a friend of mine assumed I did catering. Her mom needed a caterer for their AGM. The mom called me and she’s like, ‘I hear you do catering,’ and in my head I was thinking I just do black forest cakes. She was like, ‘I have an AGM I want you to cater.’ I didn’t tell her that I don’t do catering. I was just like, ‘Okay, let me call you back.’ I called Spencer again ‘There’s an opportunity and I want to do it.’ I’m like, ‘You know how to do a menu and how to cook,’ so he’s like, ‘Yeah-yeah.’ I’m like, ‘Okay, we’ll do catering. I’ll do everything else, I’ll organize the tables and blah-blah-blah.’ He said, ‘Okay, we’ll do it.’

We presented her the menu and she liked it and she trusted us to do the event. It was a small AGM for about 25 packs. Luckily, it was near home because we forgot literally everything. We used our friends as the waiters, they were dressed in jeans and black t-shirts. That day my dad is the one who did the choma, you don’t think things through at first like you need people to do this, this and this.

Anyway, it worked out and it worked out very well. Of course, the client didn’t know what was going on behind the scenes. After that, we sat down, he was just finishing culinary school and I was looking for a way to earn some money. He was like, ‘Why don’t I join you in this cakes as well so that when you are in uni,’ because I was studying geology at the time, I can help you.[/vc_column_text][/vc_tab][vc_tab title=”Strategy” tab_id=”175effc9-2a06-6″][vc_column_text]I used to bake until 4 a.m. and then go to school. I said, ‘Okay,’ and that’s how it started. He used to help me, when I was in uni, he was at home baking the cakes.

Then slowly we started getting referrals for the catering. Eventually we grew. We were now too much in my mom’s space so she’s like, ‘You guys need to find another home to operate from.’

Luckily, around the same time, we were participating in these little fairs at International School of Kenya. We had our little pastries and jams and stuff. There was a lady who approached us and said we should make stuff for the American Women’s Association.

She gave me the contacts of the chairlady and I called her. I was like ‘Yeah you know we have pastries we can provide for your meetings?’ she was like, ‘Okay, I’ll keep your contacts if anything.’ Then a few weeks down the line she’s like, ‘Hey there’s an opportunity to run a kitchen in Kilimani at a ladies lounge, Seraph.’

I’d never done a restaurant in my life but I thought, let me just see. We went to see the space, it was a small, little kitchen. We met the owners; they’re like ‘Prepare a sample of what you do and then come and show us.’ We presented to them and they were happy and let us run the space. My folks gave us a loan of 100,000 to buy the pots and pans and cookers, this is just basic stuff and we started. This was of course after convincing my mother I need a break from geology. Because I was only in my second year, I hadn’t finished. So I’m like, ‘Just let me take one year off. I promise I’ll go back.’ This was probably six to seven years ago.

From there, we realized we needed another source of income because we were very idle in between the restaurant and the caterings so we started to do lunches. We did like a one-page poster of the lunches and then started distributing them. Spencer used to drive around and I go to the building and go to all the offices and tell the secretaries, ‘Please put this on the notice board. We can do the lunches.’

I used to sit down on the top of the store and call companies from the directory, just literally call one by one and send them emails with the menu, so eventually that picked up. Then we needed to hire someone, first of all to do the dishes because I was sick and tired of washing. That was actually our first employee, he now leads the cold kitchen, that’s how he’s grown. He was just initially for washing the dishes.

Then I needed a cook, our second employee.

Initially, I used to be the one driving to deliver but then we got a rider. The first rider we had is currently the operations manager at SPEZ. The guys who stayed grew with us.

When we were at Seraph, we ended up doing a lot more work for ourselves than for the restaurant so the owners said ‘We want a percentage of what you’re doing as well.’ That was actually the red flag and we’re like ‘No-no, we need to move again.’ That’s where the investment came in.

We found a space in Kileleshwa, it was one of the old railway houses and they had a free garage/store area but it wasn’t a kitchen so we needed money to change that into a kitchen. We got another friend of ours to invest in the company, he had an investment company with his friends. He’s now my co-director after Spencer left.

We were just looking for a means to an end, we didn’t know anything about value in the company. Like, ‘So you have money? You want 20 per cent? Fine, take it.’ We just wanted to move and see the company move.

We moved to Kileleshwa with two employees then and moved out with about 26 employees three years later. That was amazing for us. At first we said ‘We don’t even need an office, we’ll just work from the kitchen.’ Eventually, we took three rooms in the main house because the lady had only sublet us the sq.

It was all back into business. We were lucky enough to still be in our parent’s houses so there was no pressure for rent. What we used to do was give each other money to live. That’s what we called it. Living to us then was just going out and buying what we needed. Of course, my son’s school fees was also coming from there and we paid employees. And that was the reason I started the business.

Exactly, yeah. It was not really an income as such, it was just money to live; a budgeted amount. In fact, even when we were doing the cakes from my mom’s house, we used to. Like if we would make 1,000 from a cake, we would split five hundred and save five hundred. That way even when we were registering the company we had money at least to do all that.

The challenges then were much like the challenges now. Cash flow. I remember we wanted a credit card from Barclays because we had an account with Barclays bank. At first, for a long time, they completely refused and we just needed a credit card so we could buy stuff, do the function and then pay up. Even now actually, to get proper credit facilities with the banks is hard. Because we had no assets as such. Of course we didn’t have land, we didn’t have any big machinery because it’s a catering company.

That was the main challenge then so what we tried to do was at least the lunches were a cash basis mostly so that at least helped us with the cash flow to fund them, the catering and staff. It’s gotten harder now because we don’t have that. We’re trying to do it with the cakes, to have something that’s cash based but most of our catering is for corporate so it’s really, really hard.

Building a relationship with the suppliers, is what has saved us actually over the years because back then, no one knew us, we’re a small company, two young guys.

The credit we needed on the card was about 100,000 kshs. People don’t realize that, just even to get that 100,000 is really, really, hard to get.

We had asked someone how to get a loan and they told us to make sure we banked all our money. We did that and eventually they’re the ones who came knocking and like, ‘Yeah, do you guys want a loan?’ Don’t we all know that story.

Eventually we got a loan and I think we bought our first car if I’m not wrong. Even my parents at the beginning, that 100,000, we had to pay back. It was a loan, it was not real money but at least it was interest free.

We used to borrow a lot from our parents and also my brother to just try and fund. It’s borrow-return, borrow-return. At least they knew what we were up to and that we’d pay back. Having family support was what has saved us the most over the years.

When we were registering the business we were advised to put other people on the board so we had put our parents. Even though they were giving us their money it a director’s loan.

To access financial facilities what we did was a bit dodgy but smart at the same time. Now eventually we took the loan that Barclays was giving us but what we did is take the loan and put it in a Sacco, borrowed from the Sacco and repaid the bank.

That’s where we moved to, because we were like, ‘This bank is not going to help our lives.’ It was hard enough to get this loan. We were then paying it at a lower cost and we had access to a lot more money as well. Sacco’s really help when it comes to borrowing. Now, at least we have some good clients on board so when we want LPO financing, the bank would do that.

At time we had to use the microfinance/loan sharks. The interest they charge is almost 10 per cent/month which kills your business completely because you can’t grow at all.

I think my whole life has been taking risks clearly. I had more luxury to take the risks then with my parents’ support. Now, it has to be a bit more calculated.

I didn’t go back to Geology. Mostly because geology was going to be a full time thing so it would have taken up too much time from the business. I have done courses with Strathmore, the business school and any other course I find for entrepreneurs.

What ended up happening was the lunches were taking up too much time and the catering was bringing in more business, more cash. Around the same time we were approached by Seven of chef Kiran – he used to play rugby with Spencer.

They wanted to start a similar setup like one of the company’s in UK called Pret A Manger. Basically, it does what we were doing with the lunches. We were like, ‘The timing is perfect, we should do this.’ We were starting a new company called The Good Food Company which still exists. They funded the idea and we built it. We got a kitchen in Industrial Area. For us it was like oh my God, we finally get to do it, we have the resources. We set up the company for them. The lunches are now being done from that company. Although we are no longer part of it because when Spencer left it was a bit difficult for me to run both.

***

When it comes to branding, we started with the cakes but somehow it got lost in the brand. People just know us for catering and not for the cakes. What I did was started The Missing Slice which is a completely separate brand from SPEZ for the cakes and pastries.

I think, what I would tell othe young women going into business is, you have to be very clear about what product or service you’re giving and especially how you intend to stand out. Even days when we were really broke and were like, ‘Oh my God, we need some business.’ We didn’t do functions that did not reflect on our brand. Then you have to be persistent. Yes, I was a singer, I was a backup singer, I was whatever, but once you start one business you have to focus on it and focus on it as much as you can.

I’m really interested in also having something for my kids to remember me with and to take over. It would be nice to have my daughter take over the business. The risks I take are now more calculated, because I have more to lose. Also just trying to build a solid business as opposed to just moving, moving, moving.