Wednesday December 6 2017

How Matovu is tapping into catering business

Geoffrey Matovu proprietor TM Foodland Limited catering

Mr Geoffrey Matovu, proprietor of TM Foodland Limited at his office in Ntinda, Kampala. PHOTO BY ERONIE KAMUKAMA 

By Eronie Kamukama

For a long time, the catering business in Uganda has remained informal with players setting up small restaurants to just feed the people next door. However, 32-year old Geoffrey Matovu, the brain behind TM Foodland Limited, has spent the last seven years of his business life doing things differently.
At the time when most catering businesses ran informally, Mr Matovu set up TM Foodland, a catering business in 2010 but registered it as a company in 2012 because his intention was to offer catering services to public institutions, private companies and individuals.
Today, he runs the Ntinda-based company that emerged second in rank during the Top 100 mid-sized companies survey by KPMG and Daily Monitor a few weeks ago. He says, thanks to the survey, his phone is already buzzing as it has connected him to several businesses.

Thanks to selling local dishes to customers such as Uganda Revenue Authority (URA), Kampala Capital City Authority (KCCA), Uganda Health Management Group (UHMG), Uganda Aids Commission (UAC) and The Aids Support Organisation among many, the company has realised a turnover of Shs2.2b this year, down from Shs1b last year.
This is not bad for an orphan who lost his parents at the age of two and grew up with a businessman Emmy Matovu, whose electrical enterprise swayed him to take a similar path. In his early 20s, Mr Matovu knew he had to do something on his own.
“I said as an orphan with siblings, I need to work hard and inspire them. Also, the whole idea was also to earn out of my sweat instead of begging,” Mr Matovu recalls.
Months before enrolling at Makerere University for a Bachelor’s Degree in Social Sciences, he washed people’s cars to raise startup capital.
While he earned Shs3,000 per day, the catering business came to mind. “However much there are many catering businesses, people must eat every day,” he thought. With Shs500,000 savings that paid his rent, two tables, chairs, a charcoal stove on credit and a dozen plates donated by his step mother, he opened a small restaurant in Kawempe, a Kampala suburb.

He went on to equip himself with business knowledge from seminars held at the university and it is there that he traced his competitive advantage. “I had to look for competitive advantage over those who were illiterate because previously people in the restaurant business were old illiterate women. I thought if I can start my business, I can incorporate it and find business from these organisations,” he says.
The restaurant focused on selling ‘Katogo’, lunch, evening tea and snacks had a rocky start.
“It took me six months to get my first customer, people would come but not eat,” he says, “There is a day I made over 50 chapattis and people did not eat them. What I did the next time, I got 20 boys and gave them free chapattis because I wanted people to notice my restaurant. After a week, people started coming and I increased to 100 chapattis,” he says.

His business had one problem-prices were too high for residents who afforded ‘katogo’ at Shs500 yet his pricing was Shs2,000. He poured the food every day until he resolved to sell at Shs500. This was followed by a boom. He started making Shs100,000 in profit every day, money he used to implement his strategy of registering the business.
After two years, Mr Matovu wrote letters to several banks and got a two-year contract to serve Bank of Africa’s eight employees. Even with a restaurant set up already, he started cooking from his home being more spacious that the former.

In 2015, Uganda Aids Commission turned the company around with a Shs83m contract.
“I did not look at the profit but the profile because my intention was to grow and get other contracts. I would sell a plate at Shs4,000 which was small money compared to the menu,” he says.
His well calculated move paid off after he secured three contracts to serve URA in Mityana, Hoima and Fort Portal. Later, he got a three months contract worth Shs151m from Uganda National Examinations Board (UNEB). UHMG came on board, outsourcing the company’s services on special occasions.

Behind any enterprise lie challenges. Although Tm Foodland has had a good year because of contracts, capital constraints remain a huge stumbling block. For instance, Mr Matovu made a Shs30m loss during the UNEB contract. Fortunately, suppliers are backing him up.
“My capital is based on those poor women you see in the market. You treat them well, sit down with them, give a bottle of soda and by the time you leave they have said take five bunches of Matooke and pay me after a month,” he explains, adding that banks have become his other source of capital once he wins a contract.
Mr Matovu says the catering business is expensive since prices keep fluctuating. “You sign a contract today and then prices change. Look at charcoal previously at Shs30,000 now at Shs80,000 a bag. The contracts are not amended,” he explains. Taxes on supplies are high too, besides the process of procurement is tricky. “You bid and compete with the same person supposed to give you the contract because they have the business,” he says. Human resource also requires consistent training. Mr Matovu also says perceptions about catering have not changed, and that people especially government and corporates do not consider it a professional business.
Going digital

In spite of these setbacks, Mr Matovu manages to pull through by going digital to enhance communication, filing tax returns on time and giving timely feedback to customers.
Now, TM Foodland has over 30 employees including part-time and permanent staff. Catering equipment can now serve over 10,000 people in a day. The lunch menu once consisting of rice, matooke, posho and beans at Shs2,000, has grown to include luwombo, malewa, boo at Shs30,000. Lessons taken on importance of transparency, discipline, an engaged team and remaining in touch with operations on the ground have worked for the company.

Mr Matovu now spends more time coming up with innovative ideas to take the company to the next level. Tm Foodland is now expanding its business to local food packaging, manufacture of serviettes and distribution of food and drinks to have daily capital inflows. This is because the 45-90 day payment method by government works against the business. He is also securing money from the bank to enable customers order and get deliveries of local food at their door step. Call him a market disruptor, Mr Matovu wants his team to start cooking for couples. “If you do not want to cook, we plan on having standby chefs who once given a call can come, cook and you pay us our money,” he says about a product for busy corporates who want local dishes.
Five years from now, he expects to expand, if only he could get some foreign investors. “I want to give franchises to those interested in the catering business, instead of registering a company, I give you my profile and brand. So you operate as TM, you get a profit and I get a small percentage to keep my business going,” he says.

Top 100 SMEs
The company emerged 2nd in the competition this year. Mr Matovu commends KPMG and Daily Monitor for the financial literacy classes and a marketing opportunity.