Running a cafe: Is it your cup of tea?

Proprietor of the Samovar Tea and Coffee House tells his story.

KARACHI: Few 24-year-old Pakistanis are likely to have visited over 12 countries. Fewer still have the entrepreneurial foresight to set up an award-winning successful business that draws heavily on their travel experiences.

At the Samovar Tea and Coffee House – an outdoor cafe located in the newly-established Port Grand food street near Karachi Port – Muhammad Gulraiz Khan has named each of the 20-odd teas his cafe serves after a place he has either visited, or read about.

The young cafetier is a graduate with an economics major from the Lahore University of Management Sciences, and shuffles his cafe-management responsibilities with a job at The Express Tribune; where he works as a subeditor.

Designed to serve a maximum of 30 customers at a time, the Samovar Tea and Coffee House is situated at the end of the pier at Port Grand, overlooking gigantic cranes loading and offloading containers on vessels docked at the port.

“While showing an Austrian friend around the city sometime back, I told him I wanted to set up an outdoor teahouse in Karachi. He said he was ready to invest in it and become my business partner,” says Khan, while talking to The Express Tribune.

Thus began Khan’s entrepreneurial journey. His friend invested 5,000 euros and he chipped in with his own savings, developed recipes and set up a tea stall on the pier.

“We sell about 70 to 80 cups of tea on weekdays. The number of cups sold is twice over the weekends,” he says. The per-cup price ranges between Rs125 and Rs150. The business employs three people on a regular basis, while a fourth one joins the team on weekends. The shop’s rent is calculated as a percentage of its sales every month.

It has been nine months since the launch of Samovar and, according to Khan, its sales have exceeded the initial investment several times over. “Our profits so far must’ve covered about two-thirds of the investment,” he notes.

Khan says Samovar’s tea is served in a glass, cup or mug; keeping in view its variety, taste and mood. For example, while the doodh patti is served in a glass, a European tea is more likely to be offered in a fancy cup. Typically, one serving has 200 millilitres (ml) of tea; although he is now planning to bring the volume down to 100ml and offer free refills, saying it will keep the tea fresh.

One of the challenges in running a food business successfully is maintaining an adequate inventory. Samovar’s inventory is replenished every Monday, when Khan gets his weekly off-day from The Express Tribune. His office hours clash with the business hours of Samovar, a problem that Khan wants to address by hiring a full-time manager in the coming weeks.

Khan received the first prize for his successful business model in the recently concluded Shell Tameer Awards for entrepreneurs. He says the model is scalable, adding that he is thinking of opening another outdoor cafe, preferably in the Boat Basin area. The reason, he adds, is his familiarity with the area and the tastes and spending habits of people who frequent it.

Moreover, it is a locality that stays relatively unaffected by shutter-down strikes and law and order problems that cripple businesses in the rest of the city all too often. “There are days we have to shut down. Business is zilch on such days, and we end up netting a mere Rs2,000 in sales.”

Published in The Express Tribune, April 10^th, 2012.