Spilling the Beans
How a Melbourne coffee mogul is riding out COVID-19
A former VFL player, Melbourne hospitality gun Julien Moussi knows how to make the most of a bad situation. When his footy career was derailed by an ACL tear at the age of 20, he made the savvy move to focus on the city’s second great passion – coffee – and hasn’t looked back.
Starting up a coffee cart operation to fuel the weekend sporting crowd, he soon saved enough to open his first café, Annoying Brother Expresso, with his (not so annoying) brother in 2012. Selling the Fitzroy North business 18 months later, Moussi has since gone on to open 17 venues across Victoria and Queensland with his Only Hospitality Group partners.
As well as a wholesale roastery, Inglewood Coffee Roasters, the Group currently owns and operates eight successful venues, including Fitzroy’s Bentwood and Box Hill’s Nelson.
Business was booming, until along came coronavirus…
From the “the most stressful week probably of my career” to a renewed passion for the craft of coffee making, Moussi tells us how he’s weathering the storm. He also explains why his future plans might have been modified, but they won’t be derailed.
Key lessons learned:
Streamlining and centralising kitchen operations was integral to keeping things going
To keep business humming, continue marketing to attract sales revenue
Know your numbers: Reviewing historic and currently available financial data empowers business sustainability
Having the right ‘tech stack’ for your business, from financial software to POS creates efficiency and greater control
“Centralising the kitchen in our operation's been really important.”
Initially forced to stand down 120 staff, most of whom have been reinstated with JobKeeper, Moussi and co moved quickly – going straight to takeaway and negotiating rents.
“We really tried to take a really deep breath and just sort of collect all the information that we had before we made too many drastic decisions… but in the same breath, we had to act quickly and rip the band aid off.
“We've centralised everything out of our production kitchen behind Clubhouse and just really tried to minimise overheads and just simplify the offering, and that's been really great.”
Another saviour has been the coffee roastery which has been performing really well, with online sales also growing.
“We've gone really hard at our social media and our online marketing, which has been fantastic.”
Like so many business owners, Moussi has seen the benefits of an increased focus on online marketing.
“[We’ve been] focusing on areas that we haven't had a lot of time to be able to focus on. This has seen a tenfold increase in online transactions from under 100 a week pre-COVID, due to a focus on wholesale trade, to nearly 1000.
“I think every single line item on your P&Ls needs to be reviewed.”
During the first two weeks of restrictions, Moussi reveals some of their venues were down as much as 85 percent in revenue. Scary numbers, but not as crippling as they could have been.
“We entered this period in a very strong financial position in terms of working capital… We've got a great finance team led by Stuart Deva, who has made sure that we've been positioned really well for a rainy day.”
Being a compliant business and getting all their financials sorted very quickly has been crucial to accessing all the government supports and getting a much-needed capital injection.
“Thankfully, the government has really tried to support us where they can with the JobKeeper, the PAYG concessions, payroll tax. That's been a big help.”
To get all these elements right the first time, Moussi has been using MYOB software to keep up to date with all relevant financials and payroll.
And MYOB’s integrations with other tools like Deputy – a time management and rostering service – has allowed the business to easily forecast and tweak labour costs.
“Using Deputy in conjunction with MYOB to accurately cost out rosters quickly and easily has been really important to make sure we weren’t going in blind,” he said.
Moussi also credits MYOB software with helping them get organised for the government subsidies. “Obviously Single Touch Payroll was a requirement for the JobKeeper. Having all that readily available was really important. It's obviously super easy to use and… easy to access it from anywhere.”
If there’s one thing Moussi can’t stress enough to other hospitality businesses, it’s the importance of responsible financial management.
“We've seen what's happened in the last eight weeks, that if you don't have a working capital right now, you put yourself in a very, very stressful position.
“Audit every part of your business and ensure that, if you can minimise your overheads, if you can review all your suppliers, if you can review your rosters, do it.”
Time to regroup and reflect
One thing Moussi appreciates about this time is that it’s allowed him to connect with staff in a way that’s become more difficult as the business has grown.
He’s enjoyed the opportunity to be more hands on (so to speak) with staff, even jumping back on the tools making coffee before JobKeeper – a “reinvigorating” experience.
He is unequivocal in his praise for his staff. “Everyone's adapted so well, and we've just got such a great team… everyone has just worked so well together.”
A focus on healthy living has also been key to maintaining a sense of calm amidst the uncertainty.
“I'm really proud that I've dealt with the stress the way I have. I've come in with a spring in my step and been happy, cracked gags with the staff. I've been a lot healthier during this period. I've barely drunk any alcohol over the last eight weeks.
“I just think keeping a healthy body, healthy mind's been really important.”
As for the staff? “Obviously no-one's been partying, which has really just helped everyone's mindset, I think. For the most part, everyone's really happy at the minute, mentally speaking. I think that's something that we've learnt, that sometimes when you look after yourself, what you put in your mouth helps your mindset.”
Mental health was also on the agenda pre-COVID, with a visit from a mental health awareness and suicide prevention officer.
“Before this all happened, we [had] Mitch McPherson speak to our entire group, from SPEAK UP! Stay ChatTY. We flew him over from Tasmania. He was amazing and spoke about looking after each other and checking in on each other, how important that is.”
Seeing opportunity in challenging times
Despite dire economic predictions, Moussi is characteristically full of beans about the future.
“I read recently in the Financial Review that an economist said that there's a real opportunity for people who are well positioned in this economy, and make the right moves and are aggressive, to have 20 years of progress in the next 12 months, and so that's how we're thinking.”
Still scouting for retail opportunities, Moussi says they’re within days of closing a deal that will see another site open in the very near future. And, with the takeaway coffee business booming, Inglewood is positioned to track 10 percent up, quarter on quarter.
“We're still trying to move and shake,” he adds. Just a little more conservatively, in light of the current climate.
“Anything with high capital injections, we've sort of put on ice probably for the start of next year, just so we can just operate with more certainty. But we're looking for sites that…don't require a huge capital injection straight away.
“I think it's important to trust your model and continue on the forward path, but obviously in a responsible manner.”
In terms of his caffeine kingdom, this means “trying to just make sure our eyes are open, our ears to the ground... We're super positive about what's ahead.”
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