KUALA LUMPUR: If you have been to Kluang, a small town about an hour’s drive from Johor Baru, chances are you would have dined at a nondescript coffeeshop in the railway station.

The small canteen, started by the Lim family in 1938, offers a straightforward menu — cheap and good Hainanese fare such as kaya toast, half-boiled eggs and kopi-O. Generations later, the shop’s heritage and tradition have been maintained. Its popularity has grown solely through word of mouth and its clientele includes multigenerational families.

In 2005, with the consent of his grandfather, who started the canteen, Phun Jun Jee (JJ), made plans to take the brand nationwide. He opened the first Kluang Station outlet in 1 Utama Shopping Centre, Petaling Jaya. Today, the 33-year-old has seven branches under his belt.
Here, he shares his experiences as a young, successful entrepreneur and his views on money and investing.

Importance of heritage

Kluang Station isn’t just a business; it is my family’s legacy. I’m not just selling coffee or kaya toast, I’m telling a story. It was my grandfather who first opened that small coffee shop in the Kluang railway station canteen and my uncle took over in the early 1990s. That shop has since integrated itself into Kluang’s cultural heritage. Heritage doesn’t go out of trend like gimmicks and can stand the test of time.

Difficulties in starting a business

Starting a business was a tremendous challenge. One of the greatest obstacles I had to confront was myself. I went from being a corporate high-flyer who made over RM20,000 a month to making drinks for RM3,000 a month. There were no more suits. No Hugo Boss cologne and no cigars. Becoming a business owner was not glamorous. My self-esteem took a big hit and it affected my decision-making.

The change in gears was hectic. The pressure — mentally, emotionally, physically and financially — was taxing. I had to keep my game face on while at work. Each empty table was painfully obvious and the endless stream of well-meaning criticism rubbed me the wrong way. I would return home sweaty, sticky and exhausted — only to lie awake some nights, filled with anxiety.

There were times when I questioned myself and I felt like I had had enough. I just wanted to quit but I didn’t. It took tenacity and patience to get the business going. I learnt a lot about running a business but I learnt even more about myself in those early days. The experience has definitely changed me. It wasn’t easy, but I can proudly say that I’m stronger and more confident and wiser for it.

Growing his business

Kluang Station was the first real investment I had ever made and I had poured almost all my savings into it. The initial start-up was RM350,000, of which RM150,000 was my own money. A business partner brought in another 30% and the rest was borrowed. Today, we have seven branches — in Kuala Lumpur, Melaka and Kuching, Sarawak. It’s hard to pinpoint exactly how much the company is worth today, but I estimate that I’ve easily grown my money thirty-fold. Our growth thus far has been completely organic.

We could have gone the route of franchising but we decided against it. The franchising laws in Malaysia do not protect me as a franchisor. It can be very difficult to impose and enforce standards here in Malaysia. Some of our competitors have been expanding very quickly and as a result, are terribly inconsistent. The difference [in food quality] from one outlet to the next can be as large as the distance between heaven and earth.
I could have expanded quickly but I can’t claim my heritage if I allow lax standards. I can proudly say that Kluang Station has a quality tolerance of only 10% between our outlets.

Plans for Kluang Station

I believe we have a huge potential for growth. In the short term, we could almost double our business without the need for much capital expenditure or additional fixed costs. Our current central kitchen and our administration team can support up to 13 outlets in the Klang Valley.
We are also looking beyond Malaysia and interested parties from Singapore, Indonesia and China are eager for us to open branches there. In the longer term, organic growth will be insufficient. With our current systems in place, I believe franchising can be a viable option as long as we’re not too greedy. Beyond that, I wouldn’t be surprised to see Kluang Station going public within the next 10 years and becoming a household name.
I believe Kluang Station will prosper as long as it does not lose sight of its heritage.

Spending money

My philosophy with money is ‘do not be greedy’. This extends to possessions as well. Being greedy and being ambitious are two different things. Basically, I do not commit to something today if I am not sure how I’m going to pay for it. Nowadays, I see lots of young people driving nice cars, dressing in expensive clothing and carrying expensive phones. Often, this lifestyle is fuelled by debt and is unsustainable.

Investing

When it comes to investing, decide on a return that you want, say, 10%. Once you make your 10%, get out, don’t be greedy. Always have an exit strategy. Nothing is certain, and investments will always have some sort of risk attached. However, if you have an exit plan, you will always be in control. At the very least, you can cut your losses. I’d advise anyone who wants to go into investing to find their forte and passion, and put their money there. Cars are a big passion of mine, and it only makes sense that I invest in them.

You need to be especially savvy to invest in cars, and that comes naturally with the passion. One of the best investments I’ve ever made was a 1990 Mercedes Benz 300E, which I bought for RM45,000 in 2000. I used it for about eight years and sold it for RM48,000, making a small profit. I enjoyed free transport for eight years, if you don’t count petrol [costs].

I also think that insurance is just a safety net, nothing more. I believe it’s important to have coverage, but don’t treat your insurance as an investment.

Property

One asset class that I heavily invest in is property. At the moment, I am collecting rent on six apartments across the Klang Valley.  You need staying power if you want to invest in property as it is a relatively long-term investment. I wouldn’t recommend property as a first investment, especially if you’re just starting out and have very little capital. Transaction costs are high and it is very difficult to exit quickly.

I also would not advise investors to use the home they’re occupying to make capital gains. Yes, perhaps you can sell a house you bought for RM400,000 at RM600,000 for a profit of RM200,000. The problem is that now, a replacement home will cost at least RM600,000.
I also run several smaller businesses. There are plenty of business opportunities out there that are not necessarily high-risk. I’ve owned a small handphone shop for a while. It doesn’t make a huge amount of money, but it’s a nice little bit of side income I can use to treat myself. I also operate a staff canteen at a six-star hotel and have a stake in my brother’s Western-food diner, Kitchen Creations.

Being financially independent

My goal is to be financially independent by 35. I want to wake up one morning and know that if I were to decide not to go to work, I will have an income to live on. I believe everyone’s goal should be to break away from the mentality of ‘working, paying your expenses, servicing your loans, and if you’re lucky, saving a little bit for retirement’. Being financially independent is to be free of debt, and free of the obligation to work to cover your expenses.

My journey to financial independence started even before I became a general manager or opened a business. It started back when I trained as a butcher while studying hospitality. I also worked as a line chef while studying sports therapy and rehabilitation in the UK. Get in the game early and don’t expect anything to come easily.

I believe a single guy can be financially independent with RM4 million in the bank, with his house and car paid off. He can easily survive on the interest alone. If you plan to get married and have children, you would need much more money, of course. I don’t think it’s unachievable and it’ll take more than hard work. Do not fall into the rut of mediocrity. Take an active role in managing your money.