Category: business

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The other day I met a young lad who just graduated high school. He had just inherited his father’s business because his father passed away. He was asking for advice on what he should do, including if he should go to college. His mom was currently running the business, but the business was going down a bit.

I want to jot down the advice I gave him:

Should he go to college?

College of course, depends on his goals and if he is driven and can build in public and show his value some other way. Maybe college is not necessary, and he can find a job by just showing off his skills. It is easier than ever to learn some subjects. There might be opportunities in the AI era to go to college and get some domain expertise that would help, such as in the fields of biology, etc. When I found out he had the family business to help run, that seemed to be a pretty clear path.

Talk to the customers

He should talk to them to understand their needs and pain points. Set up a coffee with them and don’t try to sell to them; just show you are trying to learn the business and what their business needs are. Be curious about them and ask if they have any memories of his dad to be vulnerable and make a connection.

Finding new Customers vs Current Customers

It’s cheaper to keep and serve current customers than to find new customers, and the type of business does not make it easy to find customers with digital marketing.

Learn the product

He was confused about what he should prioritize, and he thought he needed to learn the ins and outs of the products first. I told him to just learn the basics, take the product catalog, and put it into AI and just tell the AI to give you the basic understanding of each product. Later, he can go in-depth to learn each product but can probably prioritize that after talking to each customer to understand what are the most important products his company sells.

I forgot to say…

What I forgot to say was that in general, growing an existing business is much easier than founding a new business. I also know people that have recently bought businesses and have taken over optimizing operations with them using AI to extremely good effect with tools like Claude Code. There is probably a huge opportunity to use AI for optimizing the business.

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Hong Kong Restaurants

It is amazing what you learn from restaurant owners when you are the only customer. Just got a lot of insights into Hong Kong restaurant business models that I wanted to share.

Higher rents lead to smaller places

Some restaurants have seen their rent triple in the last decade. Higher rents lead to smaller places. As landlords demand more rent restaurants have no choice but to move into smaller places while landlords cut up spaces into smaller ones and rent them out. Witness the closing of Grappas Cellar.

Delivery leads to smaller places and higher prices

Even though there is fierce delivery competition in HK among Deliverroo, Foodpanda, and UberEats, the restaurant still has to pay them about 30% and this can be passed onto the customer. Next time you open your food delivery app check the prices and then walk to the restaurant and compare the prices off line. (This is not including the delivery fee.) Hong Kong customers are so price insensitive about delivery that they will pay the extra 30% plus delivery fee even if they live right above the restaurant. No joke!

On top of this, delivery has reduced the number of customers coming to the restaurant which also encourages restaurants to take smaller footprints with the higher rents.

FoodPanda becomes the lifeline of small restaurants in Hong Kong

Delivery kitchens instead of sit-down restaurants

Rather than pay the up to 20,000HKD per year costs of keeping your restaurant license and facilities compliant, you set up a delivery-only kitchen in a warehouse and license it as a Food Factory for a few hundred HKD. This also gives you the flexibility of setting up multiple restaurant “store fronts” on the delivery apps. Be an Italian restaurant, Spanish restaurant and Chinese restaurant all out of one kitchen.

Need discounts to get butts in seats

Hongkongers choose restaurants by how busy they look. A full restaurant with a line outside is good. An empty restaurant bad.

Without lots of customers, you can’t get lots of customers.

How do restaurants solve this chicken and the egg problem?

Enter popular discount app Eatitgo. Diners get steep discounts – often 50% off – and restauranteurs get butts in the seat. The cost? The restaurant pays HK$12 per booking via the app plus the cost of the discounts.

Eatitgo App helps restaurants give the appearance of a busy place for customers that walk by.

The forces at work

The economic and digital forces above have really changed the Hong Kong restaurant scene driving out the larger venues that can support live music while forcing restaurant groups to be more creative to bring in customers such as installing instagrammable motorcycles.

About the author

Brent Deverman, now living in Hong Kong, has almost 20 years in the food and beverage industry as owner of ShenzhenParty.com working to promote local restaurants in Shenzhen, China.

Editing by Larry Salibra.

Featured image: Hong Kong Chinese Food photo by Josh Graciano on Flickr/Creative Commons This restaurant sign is actually in Boston 😉