Nepal’s Middle Class Business Blues

In four years, we are no coffee barons but our book cafe has left memorable impressions and taught valuable lessons.

It was 2018.  My medical practice was okay. My brother's job at an INGO was good. Bhauju (Sister-in-law), a Masters graduate in Sociology, was teaching in a couple of colleges in Kathmandu. They lived in their own home in Kathmandu with an adorable daughter. Having found our way out of poverty and a remote village in Baglung with help of our education, we should have been content with life as it was.

But suddenly, we decided to shake up the status quo. 

No longer content at being professionals working for others, we set out to be entrepreneurs, taking risk and creating jobs. Somehow we chose the hospitality sector and zeroed on on a book cafe to be set up in Chitwan. Bhauju would keep her career in academia in hold and move to Chitwan to lead the new business. We brothers would contribute with ideas to develop it into a unique public space even though with private ownership. My brother would stay in Kathmandu alone and the child—while shifting with mother—would have to change school along with the location.

While we would be serving the society by promoting reading culture and holding meaningful conversations, the plan went on, the cafe and restaurant would make the whole venture sustainable if not outright profitable.

Four years have passed by. I think the lessons we have learned over the period resonate quite well with most of the small businesses in Nepal operated by middle class people like us. 

Apart from some foolhardy investment in stock market, we had nearly zero experience in the business of making money. All we had done, by then, in relation to hospitality, was dining in restaurants. None of the few investments that brother had made in private schools had gone well. Still, we thought this venture, the first in which we were fully committed, would be different.

With Chitwan's burgeoning middle class hungry for new ideas as well as tasty food, we just could not imagine failure of a venture that provided both. We hoped to break even by two years at the latest. Then, the cafe would just keep minting money, thought we in our naivete. 

Those two years did come and go. With the business yet to approach the break-even point, the pandemic hit. The never ending lock-downs pushed the entire hospitality sector in Nepal to the brink. Even though temporarily, we were forced to subsidize the business with the shrinking earnings from our jobs. The plan to mint money vanished overnight. The new realistic target was just the survival of the business through months, and well years, of the Covid pandemic.

In hindsight, it looks like only foolishness bordering on hubris could have led us to start the business, especially given our backgrounds. If someone had convinced us at the beginning that the returns from our investment of around 5 million rupees could still be negative in year five, we would have never ventured into it. The whole project was thus made possible by our ignorance and overconfidence.

Still, while we are yet to figure out the way towards profitability in post-pandemic era, we don't have an iota of regret for doing what we did. While poor in financial returns, the venture has proved to be very rich in life lessons for us. Let me list some of them for the benefit of all of you. 

One, with some potential exceptions, a loss-proof business is a myth. Planning a business with only the best case scenario in mind is foolhardy. Sincerity and hard work, while essential, cannot assure success of your business. Wishful thinking just takes you nowhere. While risk is inherent part of any business, safety cushion in case of failure should be integral part of any business plan. Our business is still alive mainly because our jobs have sustained us and even subsidized the business at the moment of crisis.

Two, the metrics of success keep changing over time. While we are yet to make our Bharatpur venture profitable in year four, we were able to open a similar café in Kathmandu. It has made it possible for my brother’s family to unite once again in Kathmandu. The maturity of the business in Bharatpur means that the staff there can manage it without our direct oversight.

Three, financial returns are important but you can devise a business where other—often intangible—outcomes can be equally or even more important. Even a loss-making venture can sometimes be a source of great pride and content. In our own case, luminaries of Nepal’s academia, judiciary, literature and arts have visited, spoken and interacted with local people in our café. Engaging conversations, many of them related to women’s issues, have taken place.

Even in the pandemic era, we were able to organize engaging online conversations in sensitive but neglected issues like saffronization of Nepal’s politics in the backdrop of Ram Mandir construction orgy in Chitwan’s Madi, thanks to the network of civic leaders that we had built.

Four, with business you also grow. Failures and mistakes teach you more than successes. While our café is unlikely to make us Nepal’s coffee barons, we now have some other enterprises—not necessarily in hospitality sector—in pipeline.  Having overcome many of our hesitations and insecurities and weighed our strengths and weaknesses in the real world, we will be in a surer footing whatever venture we start now onward. 

Five, while the business has forced some of our leftist friends to label us as decadent, rightist, profit-thirsty capitalists, we have earned new friends and we no longer feel stigmatized when called capitalists. Even while making loss, our cafes have consistently employed more than half a dozen people. I think that should count as a contribution to the society.

In hindsight, our eagerness to move beyond our professional comfort zones was what made all this possible. Now that we have endured sleepless nights and dealt with once unimaginable difficulties, the horizon of possibilities has just broadened for us. When we make a similar leap to the unknown in our next venture, we will be fully aware about the real possibility of disappointment and failure.

But having tasted the sheer thrill that our first serious business has given, that risk will make us cautious travelers rather than reluctant and hesitant bystanders.