The FINANCIAL — Eric and Amy Binders sold their house in Virginia, moved to Georgia and started a small business, Ronny’s Pizza in Tbilisi.
Due to their inexperience they made many mistakes and put too much money in to the initial launch of their business, Mr. Binder thinks in hindsight.
“Starting the same business in America would have been easier but much more expensive than the 100,000 USD sum we invested in Ronny’s Pizza in 2007,” said Mr. Binder.
“We spent too much time and money before we started our business,” said Mrs Binder.
At first the company was named Mozza. It sounded very Italian. Then they went for the more American name – Ronny.
They didn’t have a business plan when they first came to Georgia. They are both illustrators by profession and Mrs. Binder has also done some writing.
“We had nothing to do with the restaurant business before,” said Mrs. Binder.
First they hired a translator and accountant who helped them with the documents. Then they started to look for a location, equipment and products.
The couple then realized that there was no mozzarella cheese in Georgia, a key ingredient to making pizza.
“We went to the Ministry of Agriculture. They helped us find a company which could provide us with mozzarella. We needed to get equipment from outside Georgia. An American Pizza oven couldn’t be done in Georgia. Importing equipment and getting the necessary products took much time. We only managed to open our Pizzeria in 2009,” said Mrs. Binder.
They explain that while researching the Georgian business market they found many empty niches. They chose pizza for several reasons. The first reason was that they wanted to do something that could grow outside of Georgia.
The Binders are planning to offer their franchise in other countries.
“We know that Georgian people, like Americans, love delicious food. Pizza for Americans is like khinkali for Georgians. When we want to spend some time with our friends in a lovely atmosphere, we go to a pizzeria. We wanted a concept that was familiar to us,” said Mr. Binder.
The biggest problem Mr. Binder sees for small businesses in Georgia is the taxation system.
“In Georgia small entrepreneurs can’t keep their own expenses. For example the small factory that provides us with cheese doesn’t have a bill for VAT,” said Mr. Binder. “I think that the Georgian taxation system is very heavy, though it’s simple. What’s more, the tax for big and small businesses is the same. Whenever revenue surpasses 100,000 GEL, even by just 1.00 GEL, you have to pay 18% tax. When you are involved in a big business then that number is acceptable. But for start-ups, paying 18% tax is just too much.”
Asides from the taxation system, they have often had to overcome issues with quality.
“We put an accent on top quality products. We need the product to be the same, consistent good quality every day. Sometimes we are disappointed. Our motto is – Dough, Sauce and Cheese. It means that if the three components are perfect, the Pizza is perfect as well,” noted Mrs. Binder.
The first location for their pizzeria was on Pekini Street. It looked like a small fast food spot. There were not even any tables to sit down at. They mostly worked with orders. Since February 2011 they changed their location and moved to Vaja Pshavela Street. The new location is already ready with several tables and a nice interior to host customers till 10.00 pm every day.
Mr. Binder grew up in Panama. His wife also grew up outside America, in Bolivia. They think that it’s not worth living in just one country one’s whole life. They wanted their children to grow up with double cultures. So they decided to start a journey around the world to find a favourable country.
“We discovered Georgia from Sarpi in summer 2007. After the seaside we travelled to Kakheti. The hospitality of the Georgian people struck us. We had to find a school in Georgia for our 3 sons. Fortunately they got places in New School and we decided to stay here and not to go back to America. The first year was extremely difficult for all of us. The children learned only the Georgian language during their first year at the school. Now they are fluent in Georgian,” said Mr. Binder.
As Mr. Binder added, he has many Georgian friends. He doesn’t know any Americans who run small businesses in Georgia. Either large investments are put in or most Americans come for two years and then go back to their country again.
According to the National Statistics Office of Georgia 108,000,000 USD was invested from the USA in 2010. By the first quarter of 2011 the sum equalled 34,000,000 USD, which is almost 2.5 times less than in the same quarter of 2010.
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