Migrant ventures find an extra gear
Migrants have traditionally been adaptable risk-takers who work together as families, and these traits served them well during the year of lockdowns.
You might expect a catering business to be suffering after a year of Covid-19, but Pacific Soul Foods is booming. Business administrator Etereoa Lafaele says that although it was easier to do business before the pandemic hit, it’s exceeded expectations over the past 12 months.
Every week over the past couple of months there has been an event and the business relied on the wage subsidy only once, during the first alert level 4 in March last year.
‘‘What we noticed in the Ma¯ ori and Pasifika community is that because we don’t know what’s happening in the future, people want to get married now. There’s a lot of urgency that’s happening in our community,’’ Lafaele says.
Pasifika weddings and funerals are typically large gatherings with up to 400 guests, Lafaele says.
Charging a standard rate of $30 a head, the business could make up to $12,000 at an event.
Lafaele, who is a full-time software engineer, volunteers at Pacific Soul Food along with her brother Timoty Lafaele.
Their mother, Sitoelau Lafaele, and aunt, Pauline Faumuina, started Pacific Soul Food together in 2017, to fill a gap in the market for traditional Pasifika catering in the Wellington region.
‘‘Pauline is a banker and mum is a cook, so they joined forces to share their skills and do something for the community,’’ Lafaele says.
The business quickly grew to include other family members, turning into a multigenerational operation with Lafaele’s nieces and nephews also helping out.
She says working with family through lockdown eased pressure on the business.
The business had been doing so well that co-founder Pauline Faumuina is considering leaving her second job to put all her efforts towards Pacific Soul Foods.
‘‘We’re still the only ones providing this service in Wellington. Catering has been a dream of ours for many years, so we want to just focus on this,’’ she said.
Waikato University senior lecturer in finance Dr Nirosha Hewa Wellalage says the family business model is common among migrant entrepreneurs.
It worked well in times of crisis. ‘‘Businesses can keep operating for seven days a week with the entire family’s contribution. And if they’re in the same bubble there are fewer restrictions in how they can operate. They also reinvest the family’s earnings into the business which is important in a time when it can be hard to get a bank loan,’’ Wellalage says.
But outside of a pandemic, family businesses struggle to expand and typically fail after the second generation, she says.
Family dynamics could negatively affect the operational structure of the business.
She says that when migrant businesses cater to ethnic minority communities they also hold a monopoly in the market, which protects them from the impact of a recession or economic uncertainty. However, Auckland Chamber of Commerce chief executive Michael Barnett says the family business model increases the risk of compliance failures.
‘‘For many of the migrant businesses in the service sector the issue is understanding the rules and compliance,’’ Barnett says.
‘‘As a sector they are higher-risk because of their lack of understanding and may not have the resources to sustain too long a period of pressure. ‘‘If a business fails the whole family feels the impact of it.’’
He says the chamber has offered free mentorship and advice to all businesses over the past year and attempted to bridge the cultural gap by offering support for migrant business owners in different languages.
‘‘Migrant businesses are important for the diversity of our community.’’ Wellalage says there has been little research carried out in New Zealand about the impacts of Covid-19 on migrant-owned businesses, and understanding of their performance has largely been anecdotal.
She says there were two types of entrepreneurship, one driven by opportunity and the other by necessity and migrant business owners were typically the latter.
‘‘For many migrants they don’t have another option so everyone in the family pitches in. That means long hours, their pay goes back into the business and a lot of hard work, because they might not have a safety net,’’ Wellalage says.
‘‘Necessity entrepreneurs start businesses because they weren’t able to get employed and have no other viable option to generate income than to start their own business.’’
Owner of Rangiora Minimart in Palmerston North, Jayesh Patel can understand that sentiment.
He manages to hold his own despite competing with two New World supermarkets just three minutes away.
Patel says many migrant businesses owners have ‘‘no option’’ but to keep the lights on and find ways to operate their business.
‘‘We need to stay open to make money and pay living costs,’’ Patel says.
He migrated to New Zealand about 20 years ago from India where he was a business studies teacher, running a private tutoring company.
After making the move, Patel says he continued being self-employed as he saw greater value in running his own business than working for someone else.
He works 70 hours a week, starting his day at 5.30am every day. His wife also helps out part-time along with eight staff who work across his two
‘‘Covid has forced us to adopt technology and question everything that we have always done in the past.’’
Chris Kan Manager, Pearl Garden restaurant, below
dairies in Palmerston North.
Patel says the ‘‘basket value’’ spent by customers has increased ‘‘significantly’’ compared to before Covid-19 and customer loyalty had ultimately helped him.
During the first lockdown Patel gave away $150 worth of flour to customers.
‘‘The cost wasn’t as much because at the end of the day the customer was happy, and they keep coming back,’’ Patel says.
‘‘Supermarkets put their price up after Covid-19, but we didn’t even think about that. We know the customers had supported us for the past 15 years, and it was time for us to support them.’’
Figures from Dot Loves Data shows that between September and November last year, more than 16,000 businesses closed permanently, a 127 per cent increase equivalent period in 2019.
But this is still lower than the peak of 20,853 business closures three years after the initial impact of the global financial crisis (GFC).
Wellalage says she is not surprised to hear migrant businesses are doing better than they had expected because the same trend was seen after the GFC overseas.
American researchers found in 2011 that foreign-born entrepreneurs were twice as likely to start a business after the recession than the USborn population.
In 2019, US immigrant entrepreneurs made up 21.7 per cent of all business owners, despite making up just over 13.6 per cent of the population.
Auckland entrepreneur Michael Khuwattanasenee migrated from Thailand at the age of 14 to live with his uncle and grandfather.
Khuwattanasenee did not speak English when he moved to New Zealand and could not take extra classes after school to learn as his afternoons were spent working at the family takeaway shop.
Two decades later, Khuwattanasenee is the owner of two restaurants in Auckland, a takeaway shop in Devonport and a vegan Thai restaurant in Ponsonby, Khu Khu.
Despite suffering a fire that forced one of his shops to close for a month, and a series of lockdowns, Khuwattanasenee has managed to continue operating both his restaurants.
Like most of the hospitality industry, his businesses needed the wage subsidy as trade had been slow to pick up after lockdowns.
‘‘The takeaway shop was equipped to operate during level 3 but for Khu Khu, which is a dine-in experience, it was harder to do deliveries.’’
Khuwattanasenee says that although he is hoping for the best and that trade would soon go back to ‘‘normal’’, he is also preparing for the worst, another lockdown.
‘‘We have some plans for if we go back in to level 3 or level 4. Whether it’s frozen food or cooking tutorials, we’re always chatting to customers and I like asking my staff for ideas for ways we can innovate.
‘‘I’ve got to a point I don’t want to follow Covid19 news because it’s so negative and stressful. I want to focus on new business models and harness technology.’’
He says growing up in two different countries taught him to value hard work and adaptability.
‘‘When I moved to New Zealand I learnt I needed to adapt myself. For me, Covid-19 has been easier to adapt to. Being adaptable is the most important thing to succeed. Covid has made me pick up my game.’’
Auckland Chinese family restaurant Pearl Garden has been around for 46 years, and although Covid-19 has disrupted the business, it has been buoyed by a loyal customer base and its reputation in the community, manager Chris Kan says.
‘‘After Covid people are going back to what they know and trust,’’ he says.
‘‘We are lucky because we have been around for so long people know where to find us tucked away on Teed St.’’
Kan has been working at the Newmarket restaurant for 20 years.
His grandmother, Pauline Kan, started the restaurant in 1975, after migrating from Hong Kong where she taught cooking. She had a vision to introduce a different Chinese cuisine to Newmarket.
After she died in 2014, Chris Kan and other family members took over the family business.
He says that over the past year the restaurant has used the wage subsidy only once, during the first lockdown.
Kan says Covid-19 came as a ‘‘very big shock’’ last March and the impact of having to close for a month was ‘‘devastating’’ especially because the restaurant had already suffered a slump in foot traffic after the opening of the Westfield Newmarket mall.
Since the recent level 3 lockdowns in Auckland, the restaurant is finding ways to innovate its model to offer takeaways during level 3, Kan says.
‘‘Covid has forced us to adopt technology and question everything that we have always done in the past.’’
From offering trolley service to customers ordering dim sum for nearly five decades, the restaurant has moved to food delivery and pen and paper orders for customers dining in to reduce contact and wastage.
Given the continuing uncertainty of lockdowns, Kan says the business has become more agile by limiting the stock orders.
Working in a family business means there is ‘‘no off-button’’.
‘‘Everybody gets stuck in and has a say to how the business is run, there is no off-button as we continuously strive to improve the business.
‘‘There is definitely a strong passion and dedication to work very hard and ride the wave through the good times and the bad. We always stay true to our heritage of when we started 46 years ago – offer high-quality fresh food that tastes great and can be enjoyed with family and friends.’’
Lafaele says having a business ethos rooted in their culture is what makes migrant businesses different from others.
‘‘We are bringing back what we know to this new whenua that we live in. I think it’s all about identity and belonging. That’s a big thing that’s different.
‘‘Food is used to bringing everyone together and that’s another different thing with ethnic businesses. For us it’s just that we want to bring a plate or basket of food from where we are from and share it with the rest of the world.’’