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These two brothers left $200,000 worth of combined salary to sell cakes. Now they make lots of dough (literally and otherwise!)

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Michael Khatib and his brother Ibrahim always wanted to run a business together. You see, even though they both had stable well-paying jobs – Ibrahim was a senior chef and Michael was an IT Business Analyst – they yearned for more excitement and challenge.

Ibrahim was passionate about creating French patisserie and Michael was excited about business in general, so they decided to take action mid-2011.

Within six months, while still working full time, the two had purchased an empty factory, fit it out with a commercial kitchen and office, left their full time jobs and launched the business without a single customer on their database.

It was no walk in the park juggling their day jobs and setting up the business, especially the factory fit out, but it was all part of their bigger plan to wholesale French desserts to hotels, caterers, cafes and food distributors as well as set up an online retail store and offer delivery or pick up service of cakes, croquembouche, macarons and other patisserie.

Weathering the storm of a rough start…

The first year (2012) was tough – as with any start-up. In the first four months, expenses were through the roof and revenue was scarce. They worked 18 hour days, pretty much seven days a week. Plus, they both had zero business experience. So, how did they carry on?

“Ibrahim was a powerhouse in the kitchen, creating all products from scratch and experimenting new recipes with the help of only one employee. I worked on the website development, accounting, sales and marketing, and between us we did the dishes, delivered orders and attended client meetings,” Michael told Anthill.

They carefully put together a marketing plan and stuck to it – they ran Google Ads, were active on Facebook and Twitter, cold called aggressively to attract new wholesale business and, attended food festivals and weekend markets to sell and promote their products.

The customer is king… any day, any hour, no excuses.

Michael revealed to Anthill an interesting principle they endeavoured to live up to no matter what it took. “We never rejected an order, and I mean, never,” he said.

“We had a customer who wanted a croquembouche delivered on Christmas Eve but was not going to be home during the day to accept the delivery. We suggested that we deliver straight to the function he was going to… at 10pm… on Christmas Eve. The guy was blown away and was grateful that we could help him out,” Michael shared.

He added that on another occasion, they were packing up to go home around 7pm when an urgent order came through from a reputable hotel they supplied. The order was for 80 family sized quiche, which was a large order even by big business standards.

The two worked through the night to prepare the order and delivered it 5am the next day, fitting in a few hours sleep in the office prior to delivery. Now that’s called dedication!

Reaping the fruits of the hard work they sowed…

The persistence, careful planning, marketing and putting in the hours have finally paid off. The brother’s turnover this year has more than doubled from last year and are on track to turn over $1m in FY2014. How’s that for a business that opened shop without a single customer in 2011?

Furthermore, their team has grown to seven full time staff and two part timers. Plus, 70 per cent of the revenue is from wholesale, with the rest coming from retail, mostly through their website.

What next for Michael and Ibrahim Khatib?

In the grand scheme of things, Michael shared with Anthill that they have hardly scratched the surface, revealing that their vision is to open multiple retail store fronts in Sydney over the next few years as well as focus on their retail delivery service.

“Being able to deliver 6-7 days a week is a big advantage we have over other cake businesses. People love the convenience of ordering online and having their products delivered. Delivery also opens up our target market to be Sydney wide as opposed to being confined to a local area,” Michael explained.

He added, “We want to provide a service where Loomas customers order online or phone us with an order, and can choose to pick up from our factory, any of our store fronts or have it delivered straight to them. It’s this flexibility that sets us apart from our competitors.”

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