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How Alpha Catering Is Changing A Big, Traditional Industry In Bangladesh Using An Old Playbook With Muhammed Asif Khan, CEO, Alpha Catering

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Jun 11, 2019
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Muhammed Asif Khan is the CEO of Alpha Catering, a catering services company based in Dhaka that aims to bring the global standard to a local industry. Founded in 2016, the company has already made a name for itself in the market within a short period of time, thanks to its quality obsession, and continues to enjoy rapid growth. The story of Alpha offers an interesting case study for entrepreneurs and business enthusiasts alike in understanding the challenges of building a startup from scratch in Bangladesh, the realities of building a solid business, the demanding nature of entrepreneurship, and how to break into a big, established traditional industry.

We recently caught up with Mr. Asif Khan, the Co-founder, and CEO of Alpha Catering, over an email, to learn about his path to entrepreneurship, how Alpha Catering came into being, what is Alpha Catering, how Alpha Catering operates, the state of Alpha Catering’s business today, its ambition going forward, how quality obsession has helped Alpha to become a serious player in a big, traditional industry, growth lessons from Alpha, challenges of being a founder, lessons he has learned from his journey so far and much more.

Future Startup

Could you please tell us about your background and what you are working on now?

Muhammed Asif Khan

I have completed my secondary and high school education from St. Joseph Higher Secondary School & College. My father always wanted me to study at BUET, but I wasted the preparation days having fun with friends, and ultimately gave a very bad entrance exam. I still made it into the waiting list but didn’t want to pick a bad subject. Also, I didn’t have the required grades to even sit for the IUT entrance exam. So things were looking bleak. Finally, my sister suggested I try sitting for IBA, University of Dhaka. At that time, I did not know anything about IBA. But just by visiting that place, I felt like I should be there. I only had 20 days to prepare for the entrance exam, but miraculously I managed to get in. To date, that has been the most important achievement of my life. Because the four years at IBA helped me come out of my shell and become an outgoing, hardworking individual. I learned a lot of important life skills such as being assertive, working out of my comfort zone, public speaking, networking, leadership, etc.

Right now, I am working primarily on Alpha Catering, which is an almost 3-year-old catering business. Alpha Catering aims to change the perception of catering in the country by delivering great food across different cuisines with eye-catching food presentation. I am also working on a new spin-off startup, Alpha 360, which is going to be a marketplace for events vendors. It will launch hopefully by August.

Future Startup

Could you please elaborate your path to entrepreneurship?

Muhammed Asif Khan

My life goal of becoming an entrepreneur took root when I was a teenager, like 11-12 years old. Back then, the word “entrepreneur” was not common so I used to say I want to become a businessman. That is also what I wrote in one of those “Aim in life” essays at school, and I remember my teacher expressing such a surprise! She thought of it as a demeaning goal, that I should rather aim to be a doctor, pilot, etc. Nevertheless, part of my desire to become an entrepreneur stems from watching my father, who also runs his own business.

My first “venture” would be BuzzDHK, which I started during the final year of my university life with 3 other friends. Actually, they came up with the concept and on-boarded me to help with promotion. It was an online site which provided news, stories, updates, etc. on various topics that concerned the youth of our country, such as sports, games, TV shows, business competitions, concerts, etc. It started off well and we even received as much as 1.6 lakh hits one month. A couple of brands even approached us on sponsored content deals, which was our primary revenue target. But disagreement with the founders on workload and the direction of the venture eventually cut short its life.

Towards the end of my fourth year, I got the chance to get involved in another venture, which is a catering business. I have not looked back ever since.

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Future Startup

When and how did get started with Alpha Catering? What motivated you to start Alpha Catering? Why did you start a business in this sector?

Muhammed Asif Khan

My business partner Sayem Faruk and I always had a fascination towards food business. In fact, we worked on a group project on the food industry of Dhaka city but became quite appalled by the status quo, such as the use of adulterated food, unhygienic practices, price manipulation, etc. So we got down to thinking about what we can do to make a difference.

We began doing some initial market research and realized that catering would be the best food business to work on. We saw that the catering market is quite big and growing, but all the existing players are stuck with the mentality of the 1950s.

There is hardly any innovation or incorporation of technology in this sector. So we knew if we came up with new concepts we would do well. We then prepared a basic plan and got in touch with a senior who we knew invested in businesses. He introduced us to three more investors in his circle. They all liked our business plan. That is how Alpha Catering was born.

Future Startup

What went into building the initial operation of Alpha Catering? How did you put together initial investment and other things to get started? Please walk us through what the first few months of your journey were like and the challenges you faced.

Muhammed Asif Khan

The first task was building a proper kitchen and storage facility at the vacant plot at Ibrahimpur. We hired a contractor to help us with the construction, but we were struggling with the design. The interior of a catering kitchen had to be developed carefully, keeping in mind many factors, so that during work there is no hamper of the workflow. We consulted with a restaurant chef we knew, and sketched the initial design and got to work. It took more than 6 months to get the construction completed, but during this time Sayem supervised very diligently to get all the details right.

While Alpha’s kitchen was being developed, we got the opportunity of running the snacks café of a new TV channel company situated at Kawran Bazaar. We took it up thinking it would be a good learning experience. We hired two cooks and a cashier to get the project started. We would be selling snacks items like samosa, singara, chicken roll, nuggets, sandwich, etc. We faced innumerable obstacles just in getting the counter started, but the worst was when on the first day, our main cook quit and went abroad, after taking a good sum of money as advance salary. Immediately we got into deep trouble and had to find a replacement cook quick. We eventually did.

For the first one month, while my small team was learning the ins and outs of running the snacks café, it was up to me to do the bazaar shopping. For one month, every day, I would take 4-5 trips from Kawran bazaar to the TV channel office, carrying groceries in two hands and inside my backpack. During rainy days, I’d get completely drenched while shopping for potatoes, cauliflower, chicken, etc. in Kawran bazaar.

When my cashier had to go for a break, I’d be manning the cash counter, taking money from customers and serving up their orders. During very busy days, Sayem and I would both help wash the dishes. The dishwashing zone was directly in view of the customers. We would also sometimes clear the tables and bring snacks directly to the customers. One day, when chatting with one of the customers, when he learned that I graduated from IBA, he was shell shocked. He kept asking why I was doing such menial work when I could easily join a multinational and earn at least BDT 40,000!

Two years later, we catered for the Prime Minister of Bangladesh, along with all her ministers and advisers, for a per plate rate of BDT 25,000. A few months later, we catered for the daughter of the Managing Director of Square Group in partnership with an Indian catering firm and earned revenues of 50 lakh just from two events.

That is why I ditched the multinational route and joined entrepreneurship! Looking back, all of those efforts were certainly worth it, as they brought us to where we are today.

After our main operation started, one of the most critical challenges we faced early on was in serving regular office lunch. Our growth was good, and within the first 1.5 years, we were serving 500+ customers a day for office lunch. However, what we realized was that the more we grew, so did our losses. Serving regular lunch at a city like Dhaka has its own set of perilous challenges, such as beating road traffic to deliver food on time, but not setting off so early that the food became spoilt. We also had to contend with companies not paying us for 2-3 months under various pretexts. So our receivables grew while our bank balance was going to zero. People also have a very strange perception of office lunch where they expect quality and tasty food but with prices like BDT 80-90. Our competitors could meet that price simply because they were using substandard ingredients and cooking in unhygienic conditions. We never could do the same. So the unit economics did not make sense to us no matter how much we grew in this market.

At one point, our investors became tired of putting more and more money into the business and hinted that they might pull the plug. Fortunately, by then, Sayem and I had enough market data to come to the conclusion that it is simply impossible to generate a good profit from office lunch. We were also catering for private and corporate events during that time and noticed that the gross margin of those orders were substantially better. So we made the risky decision of completely pulling out from the office lunch market (60% of our revenues at the time) and focusing only on events. We had to heartbreakingly let go of half our staff, but thankfully each of them got placed soon in other companies, some by their own effort, some because of our contacts.

Since then, we soon became profitable and didn’t have to look back. Our position in the market became much stronger, and we have found the right business model to thrive in the market. The same four investors who were thinking of pulling the plug 1.5 years back have recently invested the full amount as a new investment. None of them allowed any external investor to come in because they didn’t want to get diluted!

Future Startup

Could you please give us an overview of Alpha Catering in terms of services you offer, the size of your business, how your operation works, etc?

Muhammed Asif Khan

Primarily, Alpha Catering provides food catering services for any private or corporate event. It can be a home dawaat, an office meeting, an annual conference, or even a wedding. We have an ever-growing menu that currently includes around 300 items, and cuisines like Bangla, Indian, Thai-Chinese, Continental, etc. We have catered for premium corporate events where around 30-40 items were served including 5-6 types of appetizers put forward to the guests by roaming waiters in a pass-around service, an assortment of main dishes from different cuisines, food prepared live in front of the guests like BBQ Chicken, Grilled Vegetables, Prawn Tempura, Tenderloin Steak, Sizzling Brownie etc. and a wide range of desserts from Golab Jamun to thematic Cupcakes.

We are gradually developing menus which would strip away from the usual bland local wedding affair of serving only 5-6 items with just Kacchi Biryani as the main attraction. Even in India, wedding catering is a very sophisticated affair with lots of live cooking, different counters offering different cuisines, use of eccentric items like liquid nitrogen, etc. We are bringing this into the local market. To serve the wedding clients, we recently got enlisted in Golf Garden. We have also come to an understanding with other halls like Senamalancha, Falcon Hall, Shaheen Hall, Ladies Club, Uttara Club, etc. So we can cater there as well. We have also catered for a destination wedding at Mymensingh in February, and have more lined upcoming winter in different resorts outside Dhaka.

We don’t provide just food. Along with food, every single other aspect of associated support you may need, such as plates, cutlery, tables, chairs, chafing dishes, etc. we can provide for you. We also provide highly trained servers who work in 5-star hotels like Radisson, Le Meridien, etc. for our customers. In short, we do not want customers to take any hassle when they choose our service.

Recently, we have also ventured into event management, albeit on a limited scale. We take care of all decorations, starting from conceptualization to execution, and also source elements like musicians, games stalls, magicians, etc. as per client needs. We usually execute 2-3 such events every month for now, with zero marketing. All of them are existing customers who also want us to handle their event management needs. We have plans to grow this department on a wider scale later.

Future Startup

How big is your team? Could you tell us about your culture at Alpha?

Muhammed Asif Khan

We maintain a lean workforce, which is important for our business model. Whenever there is high order pressure, we have a list of chefs, who work in different food businesses, who we call on a daily basis. We do the same for servers. That way, we save on having to pay for them for the entire month. However, we are gradually developing our management pool. Right now, our core team consists of 20 individuals.

At Alpha, we focus a lot on performance. We do not believe in retaining a person just because he is loyal to us, has been in the company for a long time, etc. If an individual is not performing up to expectations even after repeated counseling, he/she is let go. By doing this, not only do we protect the office culture, where employees may get demoralized if they are working really hard while someone else isn’t, but we also give the employee an opportunity to find another firm where he is a better fit.

Sayem and I are maniacally focused on customer satisfaction, and that has trickled down on our employees over the years. The chefs know the food has to taste fantastic every single time. The delivery people know that they have to deliver the food exactly when the customer asked for it, and not a second late or not even too early. Our account managers know they have to be extremely polite and courteous to customers no matter what.

Our extreme focus in these areas has turned our culture into one that is strongly dedicated to customer satisfaction. For example, all of our food items are tasted and approved by our production manager before being sent out. For crucial orders, our head chef himself brings the food to me or Sayem for tasting. Once, while neither of us was in the office, our chef called to inform me that some of the mutton in a Kacchi order got burnt after cooking. As there was no way out of the situation, I told him to discard the burnt pieces, and informed the client of the situation, offering a full refund. Thankfully the client did not mind, and the crisis was averted as the food was still enough to feed all his guests. I appreciated our chef letting me know the situation even though he knew he could be blamed for it. And we did not berate him.

At Alpha, we have a high tolerance for mistakes and failures provided they are not done out of irresponsibleness and aren’t repeated. Secondly, we go to the root of what happened and found that the mutton provided by our supplier was of poor quality. Since then, we shifted completely to sourcing from Bengal Meat for all our protein needs.

Our culture is also highly focused on honesty and teamwork. Over the years, we have sacked two individuals after finding evidence of theft. We have made it clear that no matter how good you are if we find any proof of dishonest activity, you will be let go immediately. In a country like Bangladesh where corruption is epidemic, such habits are very hard to curb, but we have tried doing so from the get-go so that honesty, whether with customers or internally, becomes a core part of our values.

We have also dismissed two other employees, one of whom was a retired army official because they did not get along with others. The teaching we impart is that you may be the most efficient employee we have, or come from a great background, but if you fail to work together with your team, we have no place for you.

Others may perceive us to be strict on our employees, but it is necessary to grow a culture of A+ players. We make up for it by giving them higher salaries than the industry standard, generous leaves, medical allowances, etc. Whenever the company makes a good profit from a big event, we distribute a portion of it to the employees. Plus, I always interact with them with politeness and respect. I’ve learned that good behavior goes a long way towards employee satisfaction. Till date, no employee has left Alpha of their own accord, and we consider this a testament to our employee’s overall satisfaction working here.

Future Startup

On average how many customers/users you serve per month? How have you attracted users/customers and grown Alpha Catering? Could tell us about strategies and activities that you carried out to achieve the growth?

Muhammed Asif Khan

For the first 3 years, user attraction has been almost purely organic. In a food business, word of mouth is the best form of marketing. That is exactly how we have grown. A person would order us for their home dawaat, their guests would love the food and find out about us, then order for their own events and so on. This has always worked for us remarkably well.

In addition, we have maintained a basic presence on Facebook. We never had the time or budget to expand on our Facebook activities, but whatever we invested in it gave us great returns. For example, if we spend BDT 10-15,000 on boosting, we’d generate sales worth BDT 1.5-2 lacs. We once got an order worth 4.2 lakh from Facebook!

However, part of the investment we recently raised is being directed towards ramping up online marketing. We hired a digital marketer last month, and have earmarked substantial budget for Facebook, Instagram, LinkedIn as well as SMS and email marketing. We are also looking into creating videos for content marketing. We are slowly working towards developing each of these sales channels. We’re also adding ecommerce capabilities to our website and investing in software automation to get rid of redundancies. We are positive online sales will grow dramatically and our operations will become more efficient and error-free once these changes are implemented.

We also get a substantial order volume from our website. Our SEO is already optimized so that when you search for local caterers online, our name would be first or second. Sayem worked hard on developing our website himself, and it gets good feedback from clients for its aesthetics and ease of navigation.

Finally, we have a team of two account managers who keep liaison with existing clients and pursue new leads to generate orders. We provide them with sales training but guide them to act as consultants, not salesmen.

Future Startup

What is your business model? How have you grown your revenue?

Muhammed Asif Khan

Our business model is the same as any caterer. However, we do not believe in using discounts to attract customers. Our prices are on a par with the leading caterers in the country. We strongly protect our margins so that we never have to even contemplate about compromising with food quality.

Future Startup

Have you raised any investment?

Muhammed Asif Khan

As discussed before, Alpha started off with a seed investment from our 4 investors, who have again recently invested in another round. Unfortunately, we cannot disclose the figures.

Future Startup

What are the biggest challenges you’ve faced? What are the challenges now?

Muhammed Asif Khan

There are so many challenges we’ve faced so far in this journey, that it is difficult to list just a few. However, one of the biggest of all is in recruiting quality talent. It may sound controversial, but our workforce is still very much lacking in terms of quality and work ethic compared to countries like India or China. Even an employee competing for a BDT 25,000 salary job will not be able to use Microsoft Word or Excel properly.

During the interview process, many candidates would act supremely confident, only to falter after being hired. We had to refine our hiring system a lot over the years to ensure we do not pick the wrong people. Thankfully, the team we have now are all very qualified and hardworking individuals, and we’re proud of them.

The second challenge would be in making customers appreciate our hygiene and food safety practices. At Alpha, since the beginning, we have always used branded and high-quality ingredients for any food we make. Whether its oil, salt, spices, flour, etc. we would always use well-known brands and not the unbranded variety which is much cheaper.

Since the end of last year, we have been sourcing all our proteins from Bengal Meat, whose prices are understandably higher than the local market suppliers. Our kitchen is scrupulously clean, anyone working inside has to wear a protective uniform, and we conform to all hygiene standards necessary for a food-producing establishment. All of these consequently increases our costs by a big margin. However, we are still unable to charge a correspondingly higher price to customers in spite of such practices. In the end, most customers resort to our lower-priced rivals, who can offer such rates simply because their hygiene standards are horrendous, and they use substandard ingredients. So honesty is eating into our sales, and giving competitors an unfair advantage over us.

The third challenge is in overcoming the trust factor, especially for high-value orders. For example, when it comes to a wedding, the venue, event planner, photographer, etc. will be decided by the bride and groom. These are young people who understand what we are doing and admire our brand. But when it comes to choosing the caterer for the wedding, the decision will be monopolized by the parents or an aged relative, who are not of the same mindset. They do not easily appreciate young people like us running a catering firm and believe it is better managed by bearded baburchis.

In the end, even while insisted otherwise by the bride/groom, they would choose 30-40-year-old caterers like Iqbal or Salam. They think it is less risky. They are very uninterested in giving the young generation a chance!

Fortunately, we are not sitting still in the face of such challenges. We have still thrived so far, and are working on executing some unique strategies in the coming months to overcome such obstacles.

Future Startup

You work with a long list of companies and organizations, what it is the secret of B2B sales?

Muhammed Asif Khan

Our B2B sales currently work on referrals and continued customer management. Our account managers keep tabs on our clients to know about upcoming catering opportunities. We are also working on hosting a “Customer Night” event in July. In this event, we will invite our corporate clients, plus a few new prospects, for a night of food and entertainment.

There will be 16-17 types of food, live cooking, attractive presentation and sneak peeks into our new activities that these clients can benefit from. It will be completely free to attend but invite-only. The idea is to not just show our appreciation to our corporate clients but also give them a taste of our other menu items and capabilities that they might not have known before.

Future Startup

What are the goals for the future?

Muhammed Asif Khan

Alpha’s goals right now are manifold. Aside from having a certain revenue target for the year, we also have goals of establishing our different marketing channels so that they work on auto-pilot mode. We are also targeting on introducing more of our exotic cuisine, live cooking and attractive food presentation model for weddings, corporate events, and even home parties. We are already in talks with a certain customer for this model, whose wedding is on end of July for 1,200 guests. Price per person will be BDT 2,000, so it presents a good scope for us to throw an extravagant performance.

In addition, we also have ambitious goals for Alpha 360. Even before launching it, we already have a customer who wants us to manage their entire wedding and source vendors for them, so we are hopeful this venture will take off well.

Future Startup

What are some lessons you’ve learned?

Muhammed Asif Khan

One of the most important lessons I’ve learned is making decisions based on numbers. Number always tells the story. So it is extremely important for any business to know and track its numbers, and then make decisions based on it. There were many instances in the past where I made decisions based on my own instinct or assumptions, but afterward, when we drilled down the numbers, I realized those were big mistakes. So gradually we’ve come up with systems so that we can always generate the right numbers before making any important decision. For example, for any large order, we use a spreadsheet where we can estimate every single fixed and variable expenses, and forecast our exact profit for any given price. We can tweak and play around with the variables to find the optimum net margin. So there is no guesswork necessary.

The second lesson would be in the art of managing people. It is one thing to read about things like goal setting and career progression from the textbook, but it is an entirely different challenge to implement them in reality. It is not as easy as it sounds. I’ve learned just how important it is to dedicate a portion of my day towards attending to my employees, hearing out their needs, solving the problems in their paths, encouraging them to get better, etc. And conflict resolution is also an important part of my work.

The third lesson is on the importance of delegating. I’ve always been not just a poor delegator but a believer of “I can get it done faster if I do it myself”. But very soon I’ve learned just how much I hold back my business by trying to do everything myself. I made a promise before launching Alpha that I wouldn’t be a micromanager, but recently I’ve learned that I do have that tendency. So now I’m learning to let go of certain tasks to those around me, even accepting that they won’t always be at the same standard I maintain myself, simply because that is how the business can grow. And at the same time, I’m also dedicating more of my time towards training my team so that they can eventually do an even better job than me.

Future Startup

How do you deal with challenges and stress that come with being a founder?

Muhammed Asif Khan

I try to cultivate good habits like waking up early, exercising, reading vigorously every day, going to sleep on time, etc. I’ve found that a routine life goes a long way towards keeping the stress away. Also, I maintain a list of monthly, annual and lifetime goals which I follow strictly. They help me find directions when everything seems uncertain, which is often the case when you’re running a young business.

Future Startup

What are your advice for founders who are just starting out?

Muhammed Asif Khan

There may be too many advice to list, plus I’m a young founder myself so I don’t know how much I should be propagating. But if there is one, just one piece of advice that I would want to give to new founders, then it is to develop the habit of reading. I can’t think of any other habit that has helped me as much in being an entrepreneur than reading. But by reading I do not mean fiction. Firstly, there are lots of Facebook pages like YourStory, Entrepreneurship.com, Harvard Business Review, Future Startup, Tech in Asia, etc. that are continuously churning out extremely informative contents on business and personal development. Founders should put them on “See-first” mode on their newsfeed.

Secondly, they should read popular books that talk about these topics. Many of them can be downloaded from online (bookfi.net) or even bought as hardcovers. I personally like the online page “Golpo” which has some of the best business books in stock.

Reading will introduce you to every single advice any founder can give you, and more. It will help you grow and develop. It will help you avoid many mistakes in business, and establish your venture the right way. There is nothing else that channels so much mileage for such less, almost non-existent, costs.

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Together With Flight Expert

A Message From Flight Expert!

Flight Expert, being the most prominent Online Travel Agency (OTA) in Bangladesh, is making life easier for every traveler around the globe. From booking domestic and international flights to reserving hotel rooms for your trip, Flight Expert has it all in one place, within the reach of your fingertips.

We Provide:

  • Flight Booking
  • Hotel Reservation

Enjoy:

  • Instant booking
  • Book Now Pay Later
  • Pay with EMI

Support:

  • Get 365 Days dedicated Customer Support

Contact us:

  • Call: +88-09617-111-888
  • E-mail: sales@flightexpert.com

Flight Expert - all about your journey!

Please visit us here!

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The interview was taken in June 2019.


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