Nugget Café's Founders on Opening an Expat-Owned Business in BJ
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For many of us, merely booking a doctor’s appointment in Beijing, ordering through a delivery app other than Sherpa’s, or successfully registering with the local police station feels like an accomplishment tantamount to Einstein’s discovery of relativity. After busting through language barriers and contorting ourselves into all manner of bureaucratic acrobatics, we emerge the other side invincible and unstoppable forces of intelligence, having valiantly completed the absolute bare minimum required to live here. Needless to say, these victories over the system are gratifying (if not entirely unimpressive), however, they aren’t battles that anyone in their right mind would willfully seek out.
That is unless you're Jen Rao and David Carey, two expats who chose to tackle the seemingly unthinkable and open their very own small businesses, nugget café and nugget records. Rao, a 30-year-old hailing from Canada, and her 29-year-old Irish partner, Carey, have both been in Beijing for about six years. After losing their day jobs to the pandemic early last year, they decided to turn their passion for DIY music and community into a full-time gig.
We caught up with the duo to discuss what it’s like opening a business – as expats no less – in the capital.
Since opening their doors in mid-2020, nugget cafe has quickly become a staple of Beijing's indie scene
First and foremost, let’s start with a little introduction to the business.
My partner, Dave, and I run a cassette
label called nugget records. In 2019, we invested in the technology to
record and duplicate cassette tapes and started producing tapes for
Dave's bands and the bands/musical projects of people we knew. Once news
spread that we were producing tapes, many others started reaching out to
us from all over China. Soon after we started to collaborate with and
represent artists as a label by providing services such as artist
management, consultation, merchandise production, gig booking, album
cover design, poster design, etc.
In the summer of 2020 during
the pandemic, both Dave and I lost our day jobs (we were formerly
teachers). At this time we decided to start doing nugget records full
time. We registered the company, signed a lease on a commercial space,
and built an arts/music space, as well as a recording studio!
Nearly
eight months since the opening, nugget now operates as a café in the
day, bar at night, and live house on the weekends. There's also an area
where tapes, our tape player, and other merch are sold. Behind the bar,
we have a fully soundproof professional recording studio. In addition to
recording and producing music for our signed artists, we also provide
recording services for clients.
Co-owner David Carey surveys the bare bones of his new project
Can you briefly walk us through the evolution of nugget café?
When it came to opening the café, I'll admit that there was actually very little planning that occurred.
Initially, we weren't even looking for spaces to open a café, but a
recording studio. Dave had a studio out by the east fifth ring but
during the pandemic, they refused to let foreigners into the compound so
he decided to find a place with our friend Brad and build one. The idea
for the café came to us later when we saw a few places that had
potential.
From my understanding, it's pretty much impossible to
get new business permits, especially in the hutongs. Licenses have
already been granted for those locations which are allowed to establish
businesses so it's just a matter of finding a space that has the right
license.
Co-owner Jen Rao envisions the terrace's potential
What have been some of the biggest obstacles to opening a business in Beijing? Did you have to secure funding or was this entirely self-financed?
We're still figuring all of this out as we go along! It's definitely quite difficult to open a business here as a foreigner. It helps to have an agent to guide you through the process, which is overly complicated and bureaucratic. But if you persevere, it's more than possible! Our café isn't that large, so although there were still a lot of costs related to rent and renovation, it was something that we could afford after several years of teaching here. This means we have a lot of freedom in running the business, we can do what we want without having to always consider investors, etc.
Potential actualized!
Anything that was surprisingly easy?
Renting the space that became our café was surprisingly easy! We went to view it twice, then sat down and figured out the details of the contract with our landlord. It all happened bewilderingly fast, and before we knew it we had our own little space.
Do either of you have a background in business?
It's funny you ask that because I'm the one that actually has a degree in business but Dave is definitely the more business-minded one. When I get carried away with ideas, he's the one that puts it into perspective in terms of financial feasibility. But for the most part, we know what our break-even point is and just try our best to stay above it, which is proving to be challenging in our first year as we figure things out.
Up until recently, foreigners who wanted to open a business in Beijing needed a Chinese partner. Is this still the case?
It's possible to open a business that's
entirely foreign-owned, which is what we have done, but unfortunately,
there are certain rules about what foreign-owned businesses can do as
opposed to Chinese ones. This limits our scope in certain areas.
However, in order to get around that, we would have to give up at least
51 percent of our business to a Chinese partner, which isn't something
we have any desire to do right now.
Basically, what we have done
now is opened a wholly-foreign owned business under the name of "nugget
records" which is a company that falls into the sector titled "cultural
company." This allows us to do things like open a recording studio,
record audio, create media, offer management and design services, etc.
This license is, however, not tied to the space we're renting since that
space already has its own license which is meant for "food &
beverage." We use that license to operate the cafe.
Come for the coffee, stay for the good vibes
I'm assuming your Mandarin is pretty damn fluent, but have language barriers posed any issues?
As I was saying above, having an agent is essential. Not only for the language barrier, which can pose a pretty big issue, but also to make sure you're doing everything exactly as you should.
From interacting with vendors to brand development and bookkeeping to general housekeeping, who takes care of what?
We share the workload between us as best we can and delegate tasks with regards to our respective strengths, while still making all the decisions together. In terms of events, Dave has mainly been involved with the musical side of things and Jen with more artistic-focused events. Dave runs the recording studio and Jen creates all the visual graphics. Dave is mainly responsible for booking shows but Jen oversees the daily operations of the café, such as communicating with vendors. But this has been evolving and changing as we progress, it's important to stay open and flexible!
Carey working the bar on opening day
How far into the future do you have nugget's growth planned? 5-year plan? 10-year plan? Dear God, I hope we can make it to tomorrow?
We have a lot of dreams and desires for where we’d like to take nugget as time moves on but nothing concrete yet, as we're just concentrating on establishing our main location in this first year. We do plan on growing the label side of the business more and more as time goes on, with new band signings and releases over the next year, as well as larger events outside our own space.
Friends are treated to a highly-anticipated pre-opening party
Anything else you'd like to share?
This pandemic has been hard on everyone and it was a strange and crazy time to open a business in Beijing. There have been a lot of business closures recently in the Gulou area and surrounding hutongs due to the epidemic situation and other reasons we all know about. If you have a favorite spot to hang out and spend time with friends, now is the time to frequent it more and more, to keep these businesses going with your patronage. Beijing is a beautiful, vibrant place, but the pace of change is rapid and unrelenting, so never take these bars, restaurants, and cultural spaces for granted, they could be gone before you know it.
READ: Nugget Injects a Welcome Dose of DIY Music Vigor Into Beijing's Bar Scene
Images courtesy of Jen Rao
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