From the December 1998 issue of Entrepreneur

Some would say entrepreneur Thanh Quoc Lam paid his dues a lifetime ago, long before he set foot on American soil. Lam spent his childhood in war-torn South Vietnam. At age 16, he encountered the oppressive policies of the Communist regime ruling his country when he was sentenced to two weeks in prison after he tried to prevent a government official's mistreatment of a girl who lived next door.

"[Being in prison] was terrible. After that, I know I cannot stay there," recalls Lam, 39, in halting English, his second language. "Sooner or later, we'd have to leave the country." Perhaps the dramatic circumstances of Lam's early years left him better prepared than most entrepreneurs to deal with the demands and setbacks of starting a business. Today, Lam's thriving wholesale French bakery and chain of sandwich shops dot Honolulu and ring up gross annual sales of more than $4 million.

Go East, Young Man

In 1979, after four years and two unsuccessful attempts to leave Vietnam, Lam, his fiancee and 19 family members paid the government six ounces of gold per person to board a crowded boat headed for Malaysia. Lam and his family spent nine months in a Malaysian refugee camp before the American Red Cross helped them relocate to San Jose, California.

Lam hit the ground running, taking time out only for a few months of English lessons at a San Jose high school. He reinforced what he learned in class by watching CNN news reports, and he quickly found work. "I did a lot of work--at a car wash, a flea market, as a busboy in a restaurant," says Lam. "After one year, I told my wife, `We have to do something to make more money.' "

When Lam saw an advertisement in a Vietnamese newspaper seeking drivers to take people from San Jose to Reno, Nevada, for gambling, he seized the opportunity. Soon he was organizing his own tours from California to Reno. In a sign of things to come, Lam began making sandwiches to serve his customers during the trips. He then simplified his operations by purchasing the sandwiches from a local Vietnamese businessperson named Le Vo.

In 1984, as competition in the Reno tour business stiffened, Lam left the tours behind and accepted Le Vo's invitation to partner with him in a new venture. Visitors from Honolulu had dined at Le Vo's San Jose sandwich shop, Ba-Le (which means "Paris" in Vietnamese), and encouraged him to establish a similar business in Honolulu.

Later that year, Lam and Le Vo left the California coast for the tropical shores of Oahu to check out a promising location in a former Chinatown grocery store that was for sale. The choice to set up shop in Chinatown was a thoughtful one. "I did not have experience in the food business, but in Chinatown, there is a lot of foot traffic and a lot of Vietnamese people," Lam says. "I thought the first location should be where a lot of Vietnamese people go, [because] we sell Vietnamese-style food."

At that point, Lam's entrepreneurial ambition kicked into high gear. Setting his sights firmly on the goal, he was undeterred when the grocery store owners doubled the price they'd advertised. "They said, `Yes, last week I want $20,000, but now I change my mind,' " recalls Lam.

Le Vo was unhappy with the turn of events, but Lam put down a deposit. "I told him, `I think it's a very good location,' and it [was]. After we open, we make money right away. The lucky [thing] is that no Vietnamese shops in Honolulu sell the food we sell," he says of their shop's focus on Vietnamese desserts, sandwiches and French breads.

Le Vo returned to San Jose in 1985 and sent his son to Hawaii to assist Lam. As the business prospered, the bakery Lam had contracted with to supply the shop with bread couldn't keep up with Ba-Le's demand. To Lam, the solution was simple: It was time to diversify, so he summoned a friend from San Jose to help establish Ba-Le's own bakery.

Adding a bakery to the business wasn't the only change afoot. In early 1986, Le Vo offered to sell Lam his share in Ba-Le. Lam located a private investor to lend him the money to buy out his partner--and got another taste of tricky business.

The lender had verbally agreed to lend Lam $70,000 at an 18 percent interest rate--which became a 20 percent rate the day Lam arrived to sign the loan documents. Lam was more than disappointed. "It hurt me a lot. The feeling hurt me more than the money. I told [the lender], `If you put 30 percent, I still will sign because I have no choice.' And I sign it," says Lam. "When [you're] in need, people take advantage."

In the same year that Lam negotiated sole ownership of Ba-Le French Sandwich & Bakery, he also became a U.S. citizen. Things were looking up, and Lam and his wife worked night and day to keep the bakery successful.

Fortunately, Ba-Le's stellar reputation on the Honolulu restaurant scene was growing, thanks to a local publication's review of its tasty cuisine and quality service. "When that magazine come out, my business [increased] 100 percent by the end of the year," Lam says.

In 1987, to pay off his previous lender and finance the purchase of a larger oven to keep pace with rising customer demand, Lam secured an $80,000 SBA loan after being turned down by two other banks. He paid off the seven-year SBA loan in just two years, which was considered an amazing feat by everyone but Lam. "I [worked] seven days a week, 18 hours a day," he says.

"I [kept working] long hours, but my wife had another big job she had to take care of: my two boys," Lam says. "After two or three years, I don't like her to work long hours. I ask her to work [only] from 8 to 6. To take care of the children is more important than the business."

Locations, Locations

Before long, Lam began to open and then sell new Ba-Le locations to faithful employees and family members. It was his way of spreading the wealth--and the Ba-Le name--throughout Honolulu.

In 1988, Lam expanded his bakery and added a new element to the mix: wholesale goods marketed to outside buyers such as the Hilton and Sheraton hotel chains. Next, several airlines came on board, including Continental and Hawaiian Air, which contracted with Ba-Le to provide 5,000 croissants and dinner rolls per airline each day. In 1997, he sealed a wholesale deal with upscale restaurant chain Sam Choy's.

In the meantime, Lam has become well-known in Hawaii's Vietnamese community for helping others. His philosophy? Put your family first, and treat your employees like family. "It doesn't matter how smart you are or how strong you are. You cannot be successful if you don't have the other people work together with you," says Lam. "That's why my success is maybe half from me and half from my employees. Without them, I couldn't be here."

Most of Lam's employees are Vietnamese. "Most of them don't speak English," says Lam. "They come here just like me."

Rather than pay his workers minimum wage, he starts them at $7.50 an hour and offers them flexible work schedules so they can attend English classes. "I treat them just like family," he says. "Sundays, we picnic together. We go play volleyball together, and they come to my house for karaoke and swimming."

There's no doubt that Lam, the proud recipient of the 1998 Ernst & Young LLP Hawaii Entrepreneur of the Year award in the retail food and beverage category, has a firm grip on democracy: "If you a small customer or big customer, I treat you the same way. I respect you and take good care [of you]," he says.

When you do the math (think 50,000 croissants sold daily), it's clear Lam has found the right formula for success. Expecting $3.5 million this year in bakery revenues alone, Lam runs his wholesale operations from the 15,000-square-foot warehouse he purchased in 1995. He also still owns and manages two of his original sandwich shops.

But Lam is looking beyond Oahu's shores for future growth. "[Next,] we open on another island--Maui," he says. And he doesn't plan to stop there. The man behind this American success story has his eye on other lands: "I have two [teenage] sons. The older one is studying Mandarin," he says. "I try to convince him that maybe someday he will run the business in China. That's my dream. And the second boy study Japanese. Who knows? Maybe some day, we open in Japan."

Contact Source

Ba-Le French Sandwich & Bakery, (808) 847-4500, fax: (808) 845-3967