Life after the dotcom bubble

LIKE MANY REFUGEES from the burst dotcom bubble, Eric Mak has 'downsized'. But as he reflects on life today, running a cafe complex on the Sai Kung waterfront, just a few steps from the ferry to a golf course and his beloved junk, the former computer programmer has few regrets. 'Compared to what I used to earn, this is peanuts,' he admitted. 'I used to deal in millions of dollars. This is just a normal livelihood. You make enough to get by running a restaurant, but it's not big money. 'But picture this,' he said, gesturing out over Port Shelter's picturesque bay of islands. 'What do you really aim for in life anyway? My ambition was to retire by the ocean with time to play golf and go boating and fishing. But I can do that now.' At 38, Mr Mak is probably too young to retire. After a year running the open-air Sai Square Cafe in Sai Kung, and still waiting for a return on the $3 million investment, he has gained sufficient experience in the food and beverage industry to appreciate it is not as easy as it might seem. Many disillusioned professionals yearn for the simpler and infinitely more sociable life of running a restaurant - preferably on some idyllic tropical beach. For Mr Mak, however, it happened 'pretty much by accident'. Having graduated in geographic information systems in Canada, where his parents had emigrated, his timing was perfect for the dotcom boom. First he worked as a programmer for a firm building software for the oil and gas industry. In 1993, he returned to Hong Kong, landing a lucrative post with a Macau investment company specialising in buying up mainland dotcoms. For six years he was in yuppie heaven, high-flying amid the mad explosion in information technology. Fortunately, he got out ahead as the dotcom dream ended for so many, pocketing several million dollars in stock options when his company earned a public listing. 'It was a devastating time,' he remembers. 'A lot of IT companies were still starting up and burning money so they went bankrupt. But witnessing the ups and downs of companies I was involved with, I got interested in the idea of running my own business. 'I was fascinated with how to turn an idea into reality. In IT, lots of people had ideas but thousands of others had the same ideas. The most important thing I learned was that it's not the idea that counts - it's how you execute it.' His debut in the food and beverage industry followed a chance offer from a British friend who ran the carnival funfairs at Tamar and Kai Tak. Invited to operate the food kiosks, he employed more than 100 staff to serve hotdogs, burgers, fishballs and assorted fare over 45 days - and made a killing, serving 1.5 million visitors who spent an average of $5 each. Rain and competition from McDonald's resulted in him losing money running the same operation at a funfair in Beijing, but his enthusiasm for the food and beverage business was unshaken. When the local authority in Sai Kung invited tenders to operate a cafe complex with souvenir stalls at the waterfront park, Mr Mak and his partner, who was already running a nearby seafood restaurant, won the franchise with a business model called 'Business Eatertainment' - a mix of food and beverage, tourism and entertainment. Under the terms of the offer, the local authority was content to accept a 'very reasonable' rent for the 10,000 sq ft complex on condition that Sai Corporation, as the venture is called, organised a calendar of free entertainment. '[The authority's] long-term objective is to make Sai Kung a tourist destination,' he said. In the year since, Mr Mak has organised events in the square every month, from open-air concerts and Christmas carols to a Halloween 'Haunted House' and magic shows. Over Easter there was an Easter egg hunt and an egg-and-spoon race. 'The local people love it,' he said. 'But the events are costing me a lot of money. I just wish the government would help me promote them better.' At the same time, the local authority's insistence on a western-style cafe has proved another drawback. 'Most visitors come to Sai Kung for seafood,' said Mr Mak. 'Western food appeals to westerners, but there is not really the business to support a restaurant this size.' Conceding that his business model is 'trial and error', Mr Mak is thinking on his feet to make the venture work. The cafe has a western section, complete with a British chef, to satisfy western tastes. It is even introducing weekend roast dinners. Another end of the complex is focusing on desserts, like cheesecake and tiramisu, that Mr Mak is having baked in a small factory he has opened in Kwun Tong. His junk, meanwhile, has been adapted for corporate outings, with catering provided by the cafe. The cafe's proximity to the Kau Sai Chau golf course ferry is meanwhile a springboard for organising golf days - again with breakfast, dinner and prize-givings at Sai Square Restaurant. The secret to success in the food and beverage industry, Mr Mak has learned, is keeping a 'constant eye on cost and quality control'. 'This business is not a one-off deal,' he said. 'You have to monitor everything, from presentation, wastage and changing tastes to who you employ. I've changed the tiramisu recipe more than 20 times. Hong Kong people don't like it foamy and cheesy, which is the authentic way. It's the same with fish and chips. They like the batter lighter, more like tempura. 'Why did I hire a western chef? I'm from the IT business. I can't run a successful restaurant by myself. Anyone changing careers needs to employ expertise in a business that is new to them. You can't grow a business without new ideas. You need staff with talent, whether it is managers with people skills or professionals with expertise. 'I would advise anyone thinking about food and beverage to start small, don't try to expand too fast, keep a tight budget and always prepare for the worst-case scenario. 'Entrepreneurs almost always invest all they have, so there is a lot of risk. You need to minimise the risk with tight budget control, monitoring the business day to day. If business is not on target you have to do something about it urgently. It's no good waiting a year before you act. 'You should also accept there will be ups and downs in a business that is new to you.' New direction Got first experience of the food and beverage business when invited to operate food kiosks. Won the right to operate cafe complex on Sai Kung waterfront. Arranges entertainment events to attract business. Branching out into a baking venture and organising golf days. Plan of action Act on your idea. Produce a sound business model. Secure investment but start small. Minimise risk with tight budget control. Learn and develop business by trial and error. Recruit professional expertise. Monitor progress and react quickly to setbacks. Reassess life's priorities.