“To be a market leader, you have to be willing to deal with disappointment when things don’t work, think outside the box and be brave,” recalled 59-year-old New Zealand expat Kim Thompson from the United Arab Emirates the values and beliefs she developed after being inspired by her father’s advice to work hard.
“My father did not approve of my mother working as he felt that her main responsibilities were family and home. He also didn’t believe in credit cards or loans, he worked hard and managed his financial commitments, stress and disappointments privately, but he was very cautious and safe.”
Thompson is not risk averse but loves a challenge.
She didn’t grow up in a privileged or wealthy family or an entrepreneurial family. “I was fortunate to grow up where my parents took care of the essentials. We lived in a small town of Nelson on the South Island of New Zealand of 30,000 people on the coast with beautiful beaches, mountains and national parks. “
“We had a lot of freedom and there was plenty of fresh food, clean air and water – an excellent place to raise a family. We didn’t have international holidays, but I rode horses, did a lot of other sports and had a happy middle school education.”
She loved horses and her family bought her a horse. “We rented land and I did the 3 day eventing. It’s not a cheap sport and I was so grateful to be able to pursue this passion knowing what it took my parents in both money and time.”
She did not receive pocket money, but occasionally babysat to earn pocket money.
I would live daily and spend all my salary in the first half of the month. I knew nothing about budgeting, interest rates, or savings.
– Kim Thompson
Thompson was an oncology nurse, a specialty nurse caring for cancer patients, before becoming an entrepreneur.
She left home at 15, desperate for escape and discovery, and spent almost four years in the old system, with practical training beginning in the lock room to become a registered nurse. “I was completely unprepared for the adult world.
“I would live daily and spend all my salary in the first half of the month. I knew nothing about budgeting, interest rates, or savings. I cringe when I look back at how cheap I could have bought a house for example but happily paid rent,” Thompson shared.
“I learned money the hard way, living paycheck to paycheck, but knew from a young age that I wanted a different life to explore and travel.”
Thompson’s foundation in her teens gave her clues as to how she should not have been living.
“It was only after I completed my nursing and backpacking through Southeast Asia through India, Nepal, Tibet, Mongolia and Indonesia that I woke up and realized that from where I was born I had opportunities that many other women didn’t have. It would be criminal to squander these opportunities.”
Thompson moved to Dubai with her husband, then a full-time mother of three young girls, in 1997 and did not work for several years.
Her first experience was managing a cafe in the old Jebel Ali Sailing Club in 2005.
“It was a busy coffee shop and I was new to the food and beverage (F&B) industry so at work I learned how to navigate suppliers, find the right team, retain them, manage the customer experience and always the cash flow. The café was financially feasible, but the most challenging job I’ve ever had.”
With the development of Dubai Marina and JBR, the Sailing Club closed and I suddenly had time to think and decide what I wanted to do. While operating the Sailing Club I was unable to source good, quality local coffee or find support for our baristas or equipment. So I saw a gap in the market and had the confidence to start my own business, RAW Coffee Company, in June 2007.
What were the various expenses required to start this company?
To set up a limited company and get a business license in 2007, she needs Dh300,000 and a lease. She financed the business herself with her savings.
What is an LLC in UAE?
Limited Liability Company (LLC) is the most common form of company in the UAE. A limited liability company can be formed by a minimum of 2 and a maximum of 50 partners whose liability is limited to their shares in the business capital.
“I registered the name, set up a company to design a logo, drew up a business plan, and outfitted the camp with an office, green bean storage, roasting and packing facility, and meeting rooms. I bought the production equipment, espresso equipment and small inventory, hired the first team to join me and recruited a consultant.
“The initial Dh300,000 required to open the business became our working capital to build the business. I borrowed another Dh300,000 through a bank loan, took no salary for the first five years and reinvested the money I earned into the company.”
Matt Toogood joined Thompson at the beginning of its third year as a business partner and is now a 50 percent owner of the company.
He too worked without pay for three years and they focused on knowledge, organic growth and building a robust ethical supply chain and foundation for the company.
From the beginning, Thompson’s business was beset with a constant stream of mistakes and omissions.
“We made several mistakes such as choosing the wrong location for the first manufacturing facility (DIP or Dubai Investment Park), hiring the wrong consultant, repeating operating procedures, recipes and processes from a previous employer and not having local knowledge or deep understanding of roasting had or coffee,” Thompson said.
They struggled with several delays, which meant the first few workers had very little to do. “We didn’t have a way to roast our green beans, so we bought cheap coffee from supermarkets and put a commercial espresso machine in our kitchen so we could at least do some barista training.
“Then another new, better funded coffee business sabotaged our early operations and discredited us in our early years in the market as we tried to build our reputation,” she added.
“It had a lot of investment and no basic knowledge; I was effectively ahead of them because I had the camp, the roasting equipment, and an advisor. However, they offered the consultant more money, which meant I had to teach myself how to do it all.
We made several mistakes like choosing the wrong location for the first production facility, hiring the wrong consultant, etc.
– Kim Thompson
“I would never choose to repeat our early years, trying to run a business without enough money and constantly going from hand to mouth. But it allowed us to learn every detail of the industry since we had to do the jobs ourselves. This gave us a solid foundation to build the business as we had in-depth knowledge of all aspects of our specialty industry.”
Lessons Thompson learned throughout her career and entrepreneurial journey
Lesson: Love what you do, but budget and be prepared to end up spending more than you initially anticipated.
Thompson began her professional career late in life, in her forties; Once their three daughters had grown up. Before that she had done part-time jobs, then worked in a café, but never in a shop.
Her friends, who owned their own businesses, often told her things would take much longer than predicted and cost more.
She admitted she was constantly putting out fires for the first 18 months. “The setup cost was three times what I had budgeted and no money was coming in.”
It was a very difficult start for her, but she said a few things that she got right. “I had decided to play in the right niche of the market with premium, specialty Arabica coffee and my timing was perfect.
“I like to ignore what has happened to me in the past. Every time something bad happened, I learned from it not to repeat those mistakes or misjudgments. As an entrepreneur, I wouldn’t advise anyone to start a business without triple the planned initial investment,” Thompson added.
Lesson: Reinvest profits into your business to grow organically.
As Thompson’s company began selling products and turning a profit, she and her business partner reinvested in buying better and larger stocks of green beans while hiring key people with better skills in specific managerial positions.
“We didn’t have any investments in the early days because we were a risk and nobody wanted to lend us money. Access to trade finance was not available at reasonable interest rates – so we grew organically and were in complete control of our destiny,” Thompson explained.
“I don’t think many small and medium-sized enterprises (SMEs) have had the luxury to worry about investing, especially given the challenges of the past two years with COVID-19. It was more fundamental than that, worrisome about financial viability, our team’s commitments and responsibilities, and business continuity.
We didn’t have any investment in the early days as we were a risk and nobody would lend us money.
– Kim Thompson
“We were expecting to be hit by the health crisis and we are now seeing this with costs increasing and have shifted into another gear as we know we will have to be very dynamic and resourceful over the next year. We also launched two new companies during COVID-19 that have been self-funded with other supporting products in the food and beverage coffee space.”
She’s using an old-fashioned strategy to make a real estate investment. “I built a beautiful house in Bali for investment, but I don’t have the right understanding of cryptocurrencies, NFTs (non-fungible tokens) or metaverses.”
“I’m planning to buy a home here in a new development next year, but honestly we’re still investing back in scaling our business and have ambitious plans for its future,” she revealed.