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Enthused for the Republic.

Byline: By Sahar Hashemi

Most people set up a business in a sector they know inside out, but not so for Coffee Republic founder Sahar Hashemi. Rebekah Ashby finds out about "the importance of being clueless".

It's difficult to imagine life without a skinny extra shot latte and fat free muffins, but if it weren't for disillusioned lawyer Sahar Hashemi taking a trip to New York then we may still be a nation of obsessed tea drinkers.

When Hashemi founded national chain Coffee Republic with brother Bobby in 1994 consumers had until then been treated to greasy spoon-style cafes serving bad tea or (worse) instant coffee out of polystyrene cups.

Now, 11 years and more than 100 Coffee Republics later, the coffee revolution has struck and there are now more than 2,000 coffee bars in the country.

Ms Hashemi, who was the guest speaker at this week's annual Durham University Enterprise Lecture, says: "If you'd told me 10 years ago I would be an entrepreneur I would never have believed you.

"I used to have an image of entrepreneurs being like Richard Branson so I always benchmarked myself against that and therefore thought I had no entrepreneurial qualities.

"I didn't make my first million selling sweets in the school yard, I had not dropped out of school with no qualifications ( Richard Branson makes you feel like a loser if you didn't drop out of school ( I didn't come from a family of entrepreneurs and I didn't show any creative leadership qualities as a child either, so I thought I'd become a lawyer."

Ms Hashemi joined a law firm, underwent all the training but very quickly realised she had made a terrible mistake in her career.

She says: "I realised I had chosen a career that didn't suit my personality. I am an optimist and enthusiastic and these are two qualities you just don't need as a lawyer.

"I suppose I just thought about how wasted I was and when you start leaving 40pc of yourself at home every day you take on a new persona.

"I ended up staying for five years because I was in my comfort zone but I had resorted to bitching about my boss beside the water cooler which is just so depressing."

But, despite the gut feeling that she was in the wrong career, it wasn't until January 1993 when her father died of a stroke that she decided to get out.

"Leaving the firm was difficult but I took the leap and now one of my mottos is that if you take the leap the safety net will always appear," says Ms Hashemi.

"My brother Bobby was working as an investment banker in New York at the time so I went out to see him and I vividly remember walking down Madison Avenue and coming across this new-style coffee bar.

"I could smell the coffee from outside and they had turned a really ordinary experience into a really fabulous experience. I fell in love with it as a customer, but never thought for a moment this was a business."

Later, over a Thai meal, Sahar mentioned to her brother Bobby how much she missed the skinny cappuccinos and fat-free muffins she had developed a craving for while on her trip to the Big Apple.

She says: "My brother said `me and you should be the ones to bring New York-style coffee to the UK' and I said: `erm, that's not what I meant, I meant someone else should do it, I am a lawyer, are things really that bad that I have to start making coffee?'"

And the rest, as they say, is history.

Sahar carried out an intensive period of market research, or homework as she calls it, which, amongst other things, included getting off at all 27 stops on the Circle Line on the London Underground to see what was on offer for commuters.

She says: "I wouldn't say I became an entrepreneur that night, but that was where the idea for Coffee Republic was born, as a tiny little seed.

"My brother and I were completely clueless about the business we were going into but this taught me about the importance of being clueless ( if you are really new to a business that's great and it actually gives you an advantage and an enthusiasm."

After "putting passion into a business plan" the pair, who both moved back in with their mum to save on rent costs, worked out they needed to raise pounds 90,000 to open the first bar and 20 interviews with bank managers followed.

After the 19th rejection came an appointment at NatWest Law Courts, a branch off Chancery Lane in London.

She says: "I took one look at it and realised it was the smallest bank I had ever seen. I couldn't face a 20th rejection so I said we might as well not bother.

"At this point my brother made the sound business argument that since we had paid for the meter for two hours we might as well go in. Thank goodness we did."

After going through what felt like a funding mangle, next they had to gain credibility with suppliers and find good staff.

Filled with high hopes and enthusiasm for the business, which until the latter stages was going to be known as Java Express, the first six months were, by Sahar's own admission, a "complete disaster".

Break even sales were pounds 700 a day and, even with their mum and friends drinking in the shop each day, they were making just pounds 200 a day.

Mail shots, giving away free coffee on the streets and at London Fashion Week weren't enough to turn the failing business around ( but a small article in an in-flight magazine was.

She says: "Not exactly life changing PR you would think but it worked for us. We started making a profit and then raised angel funding for the second store.

"By 1997 we had five stores and by the time we had seven we became a public company. Nothing changed, we just had to have a financial director so we were like `so which room in the house is the financial director going to work in then?'.

"Once we got up to 110 stores the excitement stopped for me. We had gone from kitchen table back to the boardroom table and corporate politics that I hated so much as a lawyer.

"So in 2001 we sold out of Coffee Republic and I admit it's something I deeply regret. The day after there was an enormous void in my life, an idleness, a boredom, depression almost.

"It was like a bereavement and I remember feeling very lost for a while."

Bobby Hashemi recently returned to Coffee Republic as chairman and is taking it in a new direction to compete in an over-saturated market.

The shift to deli outlets has helped Coffee Republic narrow losses. It is also closing non-core bars."

* Anyone Can Do It ( Building Coffee Republic From Our Kitchen Table: 57 Real-life laws on entrepreneurship by Sahar and Bobby Hashemi is published by Capstone Publishing.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2005 Gale, Cengage Learning. All rights reserved.

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Publication:The Journal (Newcastle, England)
Date:May 6, 2005
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