Put down the sudoku, the Sunday crossword puzzle and whatever the latest puzzle you have on your phone is. It’s time to step it up a notch and become your very own Sherlock Holmes meets James Bond. Hashtag Escape, Johannesburg’s biggest adventure game, was founded by Stratis Kouvdis and Chris Tsatsarolakis in 2015 and has grown from a two-man startup to a ten-person company. At Hashtag Escape groups of four to seven friends or colleagues get locked in a mysterious room filled with clues and tricks. You have one hour to work as a team, solve the puzzles and escape the room. Just as difficult is the game Stratis and Chris have to play to keep the business running: finances. Here they give us some finance lessons for business.
So, how did an accountant end up as a game designer and entrepreneur?
Stratis graduated from Wits in 2009 and went on to do his articles at KPMG. He registered as a Chartered Accountant in 2012 after completing his board exams, but life had other plans for him. Having grown up with an entrepreneur for a father, the ‘self-starter’ style of thinking was ingrained in him (he even sold cell phone covers to his school friends).
“I loved my job but there was a different challenge I wanted. I also wanted to do something fun.”
Stratis encountered his first ‘escape room’ in March 2015 when he was on holiday in Greece. It reminded him of the treasure hunts and games he played with his childhood friend, Chris. One thing led to another and five months later the two friends started designing their first escape room.
Finance lessons: Top learnings from Hashtag Escape
With a background in accounting and two years’ experience in running a business, we had to pick Stratis’s brain to see what advice he has for other business owners.
Funding the business
Stratis and Chris funded Hashtag Escape using their savings. Had they not been able to do this, he says, they would have reached out to their immediate networks for financial assistance before going to a bank.
“Hashtag Escape is a new and unusual concept and that comes with a risk,” Stratis explains. “Traditional financing institutions are risk averse and most probably would have rejected our application for finance.”
When Hashtag Escape launched, customers were expected to do their bookings and pay on the company website. But things didn’t go as Stratis had planned. “People didn’t want to pay with credit cards online. They also preferred to pay individually instead of as a group. So we had to make a plan to allow customers to pay in store.”
However, allowing customers to pay with cash came with its own set of challenges. “I have a financial auditor background, so I knew having cash on the premises was not a good idea. It’s too dangerous,” Stratis says. In addition to this, most of their gamers prefer paying with their bank cards as it’s more convenient.
Stratis tried two different credit card machines but both were either too expensive or too complicated. In April this year, Stratis switched to Yoco and hasn’t looked back.
Financial management for growing businesses
Stratis quickly learnt that running a business gives rise to a huge amount of admin. Everything from basic book-keeping and cash up to annual financial statements and tax returns has to be done efficiently and accurately. Making sure you have the right tools and processes can make all the difference here.
Furthermore, budgeting and keeping a close eye on your cash flow can not be overlooked.
“When I started Hashtag Escape revenue was small and unpredictable so I had to make sure I didn’t commit to unnecessary costs.”
To control their business expenses Stratis and Chris avoided hiring any staff for the first seven months. They did everything themselves, from the construction and cleaning to the marketing. Now that the business is more established, Stratis focuses on controlling the revenue by ensuring they price the game rooms at the right rate and receive payments timeously.