Profiles in Pizza - Silver Chef
By Tom Boyles | PMQ Staff

Having the benefit of traveling throughout Australia and attending tradeshows all across the globe, PMQ's Pizza Australia staff has the privilege of seeing and understanding many facets of companies that restaurant owners do not get to see. Many know these companies only by their name or products. In each issue of the new PMQ's Pizza Australia we will be profiling different companies and people to give you a better idea who and what is out there to help you succeed. While these companies do have products to sell, all of them also have knowledge and experience that they can share too… even if you aren't a current customer. This is what makes the Australian restaurant business one of the best in the world. For this installment, we talked with Allan English of Silver Chef. If you don't know much about who they are or what they are about, we hope this will give you a better picture. How and when did you begin your career working with restaurants?

In 1985, I travelled to the USA to attend the National Restaurant Association Trade Show and saw that the home delivery pizza business was booming. In Australia, at that stage home delivery was a very small part of the business. I secured the agency for the Lincoln Conveyor Ovens. I had approached some of the larger pizza groups who had given me strong indication that they would take the equipment when it arrived from America. As we were new in business, we had to put cash up front to buy a container load of equipment from the factory and this required borrowings from banks and relatives. When the ovens finally did arrive in Australia the larger buying groups weren't ready to move into home delivery at that stage and we were forced to promote the ovens to the independent pizza market. Unfortunately, the capital cost of the ovens was very high at $27,500 compared to the old style deck ovens, which were selling for around $5,500 to $6,000 at that time. We had strong resistance to the price of the equipment and no sales were achieved in the first couple of months. Needless to say, the banks were getting most anxious about repayment of their arrears in interest and were threatening to sell up my house to repay the debt. I then came up with the idea of renting the equipment to pizza outlets to overcome the issue of having to come up with capital - with the theory that the rent would at least pay the interest to the bank until we could get some sales. Fortunately enough sales did come and the home delivery pizza boom really kicked-off well for us. We ended up in an 80% market share and won the International Distributor of the Year - three years running.

Describe what Silver Chef is and how they can be of assistance with restaurants?

Silver Chef offers a "Rent, Try, Buy" service for the hospitality industry. Our clients simply negotiate the best possible price they can with their equipment supplier and we purchase the equipment for them and rent it back to the client for a minimum term of 12 months. If they choose to purchase the equipment at any time in that 12 months, 75% of the rent paid comes off the purchase price. At the end of the 12 months they can choose to buy it or they can return the equipment, or alternatively, they can keep on renting it and the purchase price continues to be lowered to reflect their loyalty. Over the past 22 years, we have helped some 20,000 clients fund their equipment purchases.

What is the most common mistake you see restaurant owners making?

There are always two rules that seem to apply when opening a new restaurant:

1. It always takes longer than you think to get the doors open;

2. It always costs more than you think to get the doors open.

Usually this means that the overrun in cost and time is paid for from the reserves of what people have allocated for working capital (ie.; the amount of money that was set aside to help the owners get through those first 2 or 3 months of quiet trading). So, unfortunately, many new businesses open the doors with zero cash in the bank account and are under pressure from cash flow on Day1. Obviously, rather than outlaying their prescious capital to purchase equipment, if they entered into a "Rent, Try, Buy" program this would free up the capital contraints and ensures that they have cash available to get through those difficult trading periods in the first couple of months.

What differentiates Silver Chef from other similar companies?
Traditional banks and finance companies usually require their clients to commit for 3 to 4 years in their financial agreements and also require personal Directors Guarantees and or real estate security before giving finance approval. This makes it very difficult for young generation ‘Y' to enter into their own industry as often they cannot afford to own property, so Silver Chef assists young entrepreneurs achieve their goals without the constraints provided by banking and finance institutions.

What is the best advice you can offer to existing and newbie restaurant owners?
Spend more time on planning and find the best solution to manage your precious capital.

List some of the products and services Silver Chef offers?
Check out our website on www.silverchef.com.au for full range of products and services.

If a new restaurant owner needed some information about start-up, is there someone at silver Chef they can contact?
We have a 1800 hotline (1 800 064 431) and have a team of people available to provide customer support and to answer any questions.