What is the “Bon Bini” Business Model (Part Two)?
(This is Part 2 of 2, of the story of João and his “Bon Bini” Business Model. Did you miss Part 1 of the story? Checkout the previous blog here).
So, the United Neighbors lost the case in court against the supermarket. The only effect of this legal battle was that the United Neighbors remained with a couple of thousand bucks less in their pocket, and the expansion of the supermarket was delayed with four months, maybe five. That’s it.
So now, João got a freeway to continue with his plans. He already bought this little bakery and renovated it with modern ovens and machinery. He continued with the expansion of the store area and warehouse, and set up a grill take-out business between the supermarket and the bakery, with indoor and outdoor sitting areas. Now João has three different businesses on more or less the same premises. Then suddenly it hit me! I thought, hey, why not see what we can learn from João’s sneaky practices. I mean, business is good and he is definitely on to something here.
Let’s analyze how this sh#%t really works.
The Perpetual Off-line Money Making Machine
First of all, what we are seeing here are three different type of businesses, each with their own laws and regulations they have to comply with. For example, there are different regulations for closing hours: The limit for the supermarket is at 9 PM, for the bakery it’s 10 PM, and for the food take-out, it’s officially 11 PM, but in reality it closes around Midnight.
But, there is one common denominator: FOOD.
Over time the bakery was transformed into a bakery/convenient store. When the supermarket is closed, you can still get some stuff at the bakery for the same price (used to be at a higher price point in the past). When both the supermarket and the bakery are closed, you can still get some stuff at the grill/take-out (but at a slightly higher price point). Some of the bread that was not sold that day at the bakery you can still buy at the grill.
So basically João has built an 18 hour a day Perpetual Off-line Money Making Machine, open from 6 AM until Midnight. Isn’t that awesome! And they are closed only 2 days in a year: with Christmas and January 1st.
(My father has a nickname for them: “Altijd open”, which means “Always open”)
The only thing João misses, to be able to close the 6 hour gap, is a grill/take-out business on wheels (on the island we call these “Truck’i Pan”, which literally means “Truck of Bread”). The permit for this type of business dictates that they are not allowed to open before 9 or 10 PM, and they can stay open until morning.
Recap of The Perpetual Off-line Money Making Machine
Now, let’s recap the Key Success Factors of this model:
Product: Consumption goods, basically Food & Beverage, and household stuff. People need to eat and drink everyday.
Location: High traffic area, good public transportation connections, and relatively dense populated.
Branding: Name of the business is Bon Bini Supermarket. In our local language “bon bini” just means “welcome”.
Synergy: The three businesses work in tandem with each other. From the centralized warehouse, the supermarket sources groceries to the bakery and the grill. The bakery sources bread and pastry to the supermarket and bread to the grill. And the grill? Well they just serve breakfast, lunch and dinner, and sell whatever they can sell until Midnight. Isn’t that beautiful?
Leverage: They leverage resources and make good use of the difference in closing times. A centralized purchase department and warehouse. Leverage of sales, cleaning and maintenance personnel. Oh, and I almost forgot: All other supermarkets on the island close (and I mean, REALLY close) between 7 and 8 PM. Guess where all of the moms and pops go to do their last minute shopping on their way home… (Cachingg!!)
Community: The seating area in front of the grill is THE meeting point of the local area. There are a bunch of people living in the area who don’t have much to do at home, here is where they hang out. Lots of people don’t cook meals at home anymore. Here is where they get their breakfast, lunch and dinner on the go. Construction workers, after a long and hard day of work, where do they go to grab a beer and a snack? The stadium is just a half mile away. After a soccer match, where do you think the players (and their fans) go to replenish their depleted bodies (I’ll give you a hint: they don’t go their for a bottle of water or freshly pressed orange juice…).
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So, the supermarket and warehouse is the logistical hub of the business, while the grill is like the peoples hub, the nerve center of ordinary daily social interactions.
And last but not least, they have a good lawyer, not a crappy crappy one like the United Neighbors had…
As for the neighbors? In the aftermath of the legal fiasco, to this day, some refuse to even buy even a single chewing gum in one of João’s stores.
As for João, the once young adolescent boy with a big dream? In retrospect, I think he is just a very, very smart business man. Sneaky, but smart.
As for me? Well, I still live behind the warehouse, and a couple of bucks lighter. It is still noisy, and at times a little messy. But, it’s my home. I like it there.
(This was Part 2 of 2, of the story of João and his “Bon Bini” Business Model. Did you miss Part 1 of the story? Checkout the previous blog here).