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Opening a new cafe

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Arthur Hatzis and his café are in an elite neighbourhood. No, I’m not talking about the Sydney suburb of Woollahra, where you find Nostimo. And I’m not talking about Queen Street, nor the fact that a few doors up is former prime minister Keating’s house, and only 10 doors up the road from Arthur’s café is the former fortress of radio legend, John Laws.

No, Hatzis is a ‘one-in-thirty-per-cent-er’, who has seen a family business last well beyond the first generation and successfully pass into the second generation of its ownership, albeit with the first generation still there and serving.
Hatzis’ Dad owned the Queen St deli, which then became a father-and-sons-owned operation and which gave birth to a new venture called Nostimo. Queen St deli was sold – but Nostimo still operates.

I’ve got to say, in all modesty, I was really proud when I realised Hatzis had taken the big step to cross the road from his Dad’s deli, which he part owns with his brother, Harry, and father Jimmy, to open up a very trendy café in a very trendy part of Sydney.

Now I know proud sounds a little too schmalzy, but this was the final step for a young fella who had small business in his blood – his whole life he had been linked to service behind a counter in some shape or form.

Gearing for success

Despite this impeccable background for opening up a small business, Hatzis prepared for the big event, which has a very big failure rate, by immersing himself in all the right info for success.

Only factual honesty permits me to overcome my modesty to reveal that about 12 months before Arthur opened the cafe, while still at the deli, he started asking me questions about setting up a small business (in between slicing the salami and wrapping the bread).

He later revealed that he and his brother had been working their way through one of our older publications, Getting Started in Business, which is an intensive, teach-yourself tutor for anyone contemplating the scary prospect of rolling up the shutters on a new business. (You can find the new version here, with 30 per cent off!)

He admits that the most difficult task for anyone to do in preparing for a new business is to anticipate the paperwork involved when you employ staff. Though he knew this would happen, all the best prep in the world he now knows would never physically get you used to doing it each day after working 12 hours, standing on your feet, looking out for customers’ needs and working with a brand new team of workers.

Even with all of this pressure, Hatzis happily admits he was really pleased with his staff and considered himself lucky to have attracted such a group in those all-important days of a new business.

Attention to detail

Nostimo, to my way of thinking, is symbolic of our small business future, especially in relation to food outlets in major capital cities. (Of course, what happens in these places will eventually be mimicked right around the country.)

Arthur made Nostimo trendy. To be fair, it is what Melbourne’s Chapel Street (South Yarra) pioneered in the late ‘80s. You know, very chic-looking waiting staff in black t-shirts and trousers with white table clothes wrapped around their waist.

There’s subtle – but cool – music, you can order all manner of coffees with artistic looking cakes your Grandma never baked, and everyone is ordering foccacia instead of toasted ham and cheese sandwiches. And coffee comes in glasses with serviettes wrapped around them!

Even with all their attractive trappings, you can often eat in these joints for not too much money, which Arthur points out is what busy people white-collar people want when they eat out for breakfast or meet for a quick lunch or finish a late day at work and might be off for an evening drink.

Being a typical, new aged male, I assumed Nostimo was a husband-and-wife venture. This followed by my introduction to Hatzis’ wife, Marianne, who was boiling up milk at the espresso machine, but I was soon put straight by Arthur that this was his business.

My next conclusion was – old, Greek customers of the man in charge must die hard, even for very modern young Australians of Greek background. But I was wrong again, showing how aged and out of touch I am becoming.

As Hatzis promptly points out, “Marianne is only helping me out while we get the first few months out of the way – she has her own business”. And you can see that on display, as she is the interior designer of Nostimo.

Beyond the aesthetic

One of the most alluring aspects of the café is its colour and clean lines. Without doubt it was a risky gamble of bright blues and bold primary colours bouncing off squeaky clean stainless steal, but if the standing room only at lunch time is any indicator, the colourful cocktail is certainly making the customers come back for more.

Of course, it’s not just for the décor. The food and coffee is top class and you would expect it, as Arthur has been serving former Prime Ministers and premiers – like Neville Wran – and celebrities like Maggie Tabberer and Jack Thompson, since he was a child in his family’s deli.

Apart from the focaccia, which as a hands-on journo, I felt compelled to try, the flourless orange cake was sensational and there is a story here too.

Arthur has his cakes made by a special baker who does them for Nostimo, giving it an old world touch which is often missing in modern business, but is well and truly seen in his Dad’s deli across the street.

Arthur Hatzis is a successful by-product of an old fashioned family business with the right blend of the best of the new and the old worlds.

Family ties

One area where Arthur concedes his family business, both in the deli and in the café, cannot go modern is in succession planning.

When I asked his Dad and brother about it, they implied that it was all looked after, but after grilling Arthur, he admits nothing complex had been legally planned or formalised.

All three believe in the family and it’s power to sort things out if a death or divorce should unhappily surprise them. As Arthur puts it: “It’s a subject that would be too hard to look at, this is a family.”

However, experts in succession planning insist this is what all families say and think. Chris Brachford, of AMP, says all businesses need to confront the issue of succession and one way is to engage a facilitator or an objective party to explain the issues and benefits of planning for the unexpected.  

My experience with small family business is this is easier said than done, but all the same, as the ownership or potential ownership of a business becomes complicated because of inheritance, a clear plan needs to be trashed out for succeeding generations.

Enda Carew in her book, Family Business, says only 15 per cent of family businesses make the third generation, and only three per cent find the fourth generation. Those in the elite three per cent groups have planned for a successful succession.

Work on your business, not in it. To learn how, book a complimentary business assessment today with a Switzer Business Coach.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Monday, February 22, 2010

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