SHAH ALAM, July 6 (Bernama) -- Former Prime Minister Tun Dr Mahathir Mohamad told a small and medium industries (SMIs) Congress here Wednesday that he has yet to receive any returns or dividend from his venture into the bakery and pastry business.

Dr Mahathir's venture is a Japanese-style bakery called The Loaf.

He said he has had to also pump additional capital into the business but has not borrowed a single sen from banks.

"I have a great fear of borrowing. I cannot sleep when I borrow money from people," he said.

Fortunately, he added, he has saved money from his 29-year stint in the government as minister and Prime Minister to start the bakery and pastry business.

Dr Mahathir advised those who want to do business to be prepared to have more capital than they expected or thought as adequate.

"If someone says you need to have RM1 million as capital, please prepare RM3 million," he said.

He also said some businessmen in Malaysia use the money from banks as capital and if they lost it in their venture, it was not theirs but the latters.

"They forget that the bank can take the matter to the court and make them bankrupt for not repaying the debt or their credit worthiness and credibility is jeopardised.

"They end up with no banks willing to give them loans anymore," he added.

Dr Mahathir said besides credit worthiness and credibility, an entrepreneur must deliver what he or she has promised to customers.

He said many people wanted him to franchise The Loaf and were willing to pay a lot of money upfront. But at the moment he added, he was unsure if that would bring in a profit.

"I want to ensure when the franchise takes off, it will make money. Then again, there is the question of credibility. If you want to take the money upfront and not care if the franchisees do well or not, very soon your reputation is gone," he added.

He said The Loaf now has four outlets in Kuala Lumpur, including one at the Pavilion Bukit Bintang and another in Langkawi.

Dr Mahathir said he is toying with the idea of having a centralised kitchen like most Japanese restaurants.

The one-day conference was organised by the Malaysia SME, a fortnightly local newspaper on small and medium enterprises.

-- BERNAMA