He’s no stranger to the entrepreneurial scene – known as the “Next Gen F&B Entrepreneur”, Kent Chua is the proud co-founder and the Executive Director of Rhombus Group which owns 19 popular and strong F&B brands (i.e. Rama V, Fa Ying, Wondermama, The Morning After, The Beer Factory™, T.B.F., The Library, Geoventure, The Rabbit Hole, Suzie Wong, and etc). Rhombus Group was recently recognized by Malaysia Book of Records as the group with the most number of home-grown F&B brands in Malaysia.
I wanted to do more, be more and make a real difference.
He has also won multiple awards, including Top 10 Malaysia: Young & Dynamic Entrepreneur, named as Malaysia’s 100 Most Influential Young Entrepreneur 2016 and is a proud receiver of Prestige Top 40 Under 40 2013 Young Achiever Award.
TheBizJuice had the honour of getting to interview Kent Chua as our very first entrepreneur in our Entrepreneur Spotlight! In this article, Kent Chua will be revealing valuable insights on the financing difficulties entrepreneurs can expect to experience and how he overcame them.
You were previously an auditor at Deloitte – what inspired you to change your path and become an entrepreneur?
There is always a tipping point in one’s life that makes one venture into the unknown. For me, that tipping point hit when I was climbing the corporate ladder. Whilst promising, the corporate life just was not for me as I felt that it was rigid and restricting. I had many ideas to materialize and most importantly, I strongly believe that we can’t be alive just to pay bills. I wanted to do more, be more and make a real difference.
This led me to leave my corporate role as an auditor and embark on my entrepreneurship journey. I chose the food and beverage industry as my first venture mainly because I found the industry lively and vibrant; very much a reflection of my personality as I cannot stand mundane and repetitive routines. The challenges that await keep me excited and ever-going.
Many entrepreneurs face a huge challenge in financing during their startup phase of a business – what was it like for you back then, and how did you overcome this?
We fought hard and came up right on the top!
It was extremely challenging! We emptied our life savings, took personal loans, borrowed from our families, maxed out all our credit cards and used installment financing for practically everything that we could! We negotiated a longer repayment term with our contractors which form the biggest bulk of the setup budget, reached out for sponsors from our key suppliers and squeezed to save on every corner to make ends meet. To save on staff cost, we had to do everything from marketing, managing, bartending, cooking and cleaning. It’s no wonder people define CEO as Cover Everything Officer!
It was an extremely stressful period and failure clearly wasn’t an option as we would lose everything. As the saying goes, “You do not know how strong you can be unless being strong is your only choice”. And that was precisely what happened, we fought hard and came up right on the top. Rhombus Group was recently recognized by Malaysia Book of Records as the group with the most number of home-grown F&B brands in Malaysia, totaling 19 brands strong! After all, smooth seas never made skilled sailors!
With Rhombus Group rapidly expanding, what are the different sorts of financial challenges you experienced and how do you strategise against them?
With rapid expansion come intensive funding requirements. So, it all boils down to funding sources and efficient cash flow management.
First things first, with finite resources, our expansion plans have to be what we call bulls-eye decisions. We are extremely careful on who, what, where, when, how for each and every of our outlet openings.
- Who are the target customers?
- What concept suits best?
- Where is the best location?
- When is the best time to open?
- How are we going to fund it?
We cannot afford mistakes because one failed outlet will give us a major setback to our momentum, causing significant financial losses and extended burden in months to come. So comprehensive due diligence and market analysis before we make a move is a primary strategy.
Next would be to establish relationships with commercial banks for liquidity financing solutions which suits the group’s working capital requirements and growth plans.
We also need to reach out to strategic investors who not only can contribute in terms of cash injections but also those who believe in our vision, committed to our direction and most importantly can provide the support through their invaluable network.
Last but not least would be to give credits to our strong financial team who manages our cash flow in a truly effective and efficient manner to ensure we adhere to our budgets and financial bridging needs.
For The Beer Factory™, you implemented a pricing strategy that encouraged larger consumption by making it expensive to order a minimal quantity, while large orders enjoy large discounts. How do you plan for these pricing strategies and how do they work in line with the financing of the business?
There is the margin strategy of less sales at a higher price or the volume strategy of more sales at a lower price. Our game is the latter, because we hold true to our purpose of starting the business.
When we started the business in 2010, we were precisely our target market. Young and wanting to have good fun without a major damage to our wallets. With those humble beginnings always in mind, we have maintained the core brand values of The Beer Factory™ till today which are fun, affordability and quality.
We basically launch bulk promos to get customers to come in bigger groups and by encouraging so – we are able to fill up the outlets easily. Apart from our affordable prices, the ambiance generates more crowd as everyone wants to be in happening places. Drinkers are always looking for a good crowd and good fun; that is what they get at The Beer Factory™. As we deliver volume, it also gives us much more room to negotiate higher trade discounts and rebates from our key suppliers which we can eventually pass on the savings to our fellow loyal customers.
Stay tuned for Part 2 of our interview with Kent Chua, as he shares more stories on how his group stays ahead of the curve in the competitive industry and financing tips!
Let us know in the comment box below, who do you want us to interview next! Don’t forget to subscribe to TheBizJuice now to receive more awesome business tips from Malaysian’s entrepreneurs!