East meets - and eats - West
(Business 2.0 Magazine) -- Even in China's hinterlands, there's an incredible hunger for quality Western food.
Investment level: $100K
Risk level: High
The spaghetti tasted like soggy cardboard. The supposedly fresh bread was rock-hard. And the ice cream: Forget it. Josh Pollock, 31, had experienced so many culinary disappointments in the southwest region of China where he and his wife were living that he decided to do what any aspiring entrepreneur might: open his own restaurant.
To him, the market opportunity was obvious: Not only was the available Western food dreadful, but people were eating it up.
"I couldn't believe they would actually pay for this stuff," says Pollock, a native of Connecticut. "I finally thought, 'Huh, I'm sure they wouldn't mind a better-tasting alternative.'"
Less than two years later, Salvador's Coffee House is a bustling establishment in Kunming, a city of more than 4 million in the Yunnan province, with plans to expand to other cities around China.
Opening a restaurant anywhere is notoriously difficult, and China is no exception. But Pollock and his partners picked a location that they figured upped the odds - a quickly growing city that has a university population and isn't nearly as built up as Beijing or Shanghai.
Pollock also chose to specialize in a menu of hard-to-get offerings: fresh coffee, bagels, and homemade ice cream. Curiously, the bulk of the restaurant's clientele is Chinese.
The ingredients come from across the country. The restaurant trains, and even houses, chefs and waitresses from remote villages, offering them English lessons. The only relevant experience Pollock had was that he grew up eating American food. Still, that hasn't prevented him from running a profitable restaurant. He's even begun selling his ice cream to a local five-star hotel.
Getting started in any Chinese city is tricky, so it's important to hire a local person experienced in navigating government agencies. To avoid visa issues, Pollock went through the steps with local government agencies to create what's known as a wholly foreign-owned enterprise.
Different investment levels allow different types of businesses. With $13,000, for instance, Pollock says you can register as a consultancy. Restaurants require more because of the number of licenses needed from health and environmental agencies.
Pollock's partners - two American friends and his Japanese wife, Naoko Okano - drummed up $40,000, the minimum amount required for the initial investment, and then found some cheap space ($500 per month after paying $13,000 to take over the lease), which they fixed up by hiring local laborers.click here.