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How Nyalu Communications Began as a Side Business but Grew to Success

Nyalu Communications began as a business run in spare time while Ephraim Mashisane worked his corporate job. He boot-strapped, used clever collaboration, and now owns the building he runs his R44 million company out of. Here are the start-up tricks that helped get him where he is today.

Tracy Lee Nicol

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Vital stats

  • Company: Nyalu Communications
  • Player: Ephraim Mashisane
  • Est: 2009
  • contact: +27 (0)11 402 8546
  • Visit: www.nyalu.co.za

Nyalu Communications is a company that can print and brand on anything; they pride themselves on that and doing it all in-house. Walk through the factory floor and there’s every print-making, sewing and embroidering bell and whistle you could think of. But it didn’t start that way; far from it.

Related: Hustling on a Side Business? How to Find the Time.

Getting Started

It was while he was employed full-time as the manager of a bank’s digital print department that Mashisane registered Nyalu Communications as a side-line business printing promotional material in 2006.

He ran the operation from his laptop, outsourced projects and recalls being surprised when jobs came through, “I remember asking myself in dead quiet times, ‘Am I still in business?”

In time, a few more jobs came through and Mashisane decided to hire a receptionist and rent a small office to deal with clients while he focused on his day job.

“That cost me about R3 000 a month which I took out of my salary. I also used my credit card to finance projects until I got paid. Sometimes I’d run out of money completely, and people would phone shouting for their money,” he recalls.

Lesson 1:

“Sometimes I wouldn’t have money to pay debtors, and I’d avoid all calls that were private or withheld numbers. But I realised this tactic was also blocking customers and potential customers, so I forced myself to take the angry calls and get on with it.”

Taking the plunge

Having carved out some profit, Mashisane heard of a liquidated company selling off equipment.  “I took R640 000 of my savings and spent it all on one machine. But it soon dawned on me I’d need to hire someone to operate it and buy its consumables. By this time I had two staff and a machine, and all of my corporate salary went to the business – I got nothing. I knew then I’d have to focus my full attention on bringing in business. I resigned in September 2009 and felt the pressure of having no salary to pay anyone!”

Lesson 2:

You can’t grow a business while your attention is divided. “Once I’d bought that printer and knew I needed more business to pay for the additional expenses, I knew I had to spend all of my time bringing in new business. So I rolled up my sleeves and got busy.” With this new focus on sales, by 2010 the company not only broke even but grew 300%.

Building the BusinessNyalu

From 2010 Mashisane’s calculated risk had paid off and he was able to draw a salary.  “I cut it significantly from what I was earning in corporate to build working capital, grow endowment policies for the business, and save for future purchases.”

Being a young business in the thick of a recession meant Nyalu Communications felt little love from banks.

“During the times when we really needed the money, the banks turned us down. So to grow, I’d identify equipment I needed, save and then buy it with cash. This helped with the business’s gearing, and as we built savings and equity, we became more appealing to the banks.”

Lesson 3:

Be prepared to take home a meagre salary for the benefit of the business and re-invest everything you’ve got into the business. “In corporate, I was used to having money and buying whatever I wanted, but I knew the business’s priority would have to be profit, not my own personal gain. Strategy and discipline were needed.”

Related: 6 Stern Truths You Need to Know Before Becoming an Entrepreneur

Biting Off the Right Size

Mashisane has grown from a small print business to a R44 million company by pushing out of comfort zones.  “I’m always looking to see how I can improve and expand Nyalu’s service offerings, never getting comfortable. In the early days I learnt when to say no to business. If a client needed a project completed in unrealistic time, I’d say no knowing it would preserve the reputation of the business. Clients would be upset, but they’d come back after being burnt elsewhere, knowing we deliver on our promises. Similarly, I formed a consortium of other same-sized businesses to share large projects.

Lesson 4: 

Business isn’t always about competition, especially when growing.

“I developed partnerships with similar businesses to mine so that when a project came along that was too big for me to handle alone, I’d share it. That way quality was maintained and we all benefited from the business,” says Mashisane.

After working his way through the ranks of the print industry since 1999, Mashisane also knows the realistic capacity of his staff and equipment.

“On paper, a machine will produce say, 7 000 T-shirts in eight hours, but you have to know the ideal versus the reality – which is load time, human performance, etc. Without that you’ll over-commit, fail to deliver and compromise your business.”

Keeping Afloat In the Wait for Payment

One of the major difficulties of Mashisane’s industry is late payment, making cash flow challenging and potentially crippling growth.

“It’s a priority of this company to save as much profit as possible, and we focus on fostering a good relationship with the bank. Because of savings and an overdraft facility we can withstand quiet months and late payments. Some months there’s millions in outstanding payments but, because of our cushion we can continue to operate and grow until the clients’ 30, 60 or 90 days are up.”

Lesson 5:   

“It was hard for me as a young business receiving calls from suppliers and banks because I owed them money, but I’ve learnt you have to treat clients like the bank treats you: Always remind clients of outstanding payments.

“I’ve got a team dedicated to following up on payments now. They send statements and invoices, and follow up regularly, asking, ‘Are we still on track for the 30th payment?’ Every client knows what they must pay and by when because we actively remind them.”

Success philosophy: Always be available

Visit Mashisane’s website or look at his business card, you’ll see his personal cellphone number.

“Some business owners remove themselves from the coal face when their business is growing by employing general managers and department managers to allow them to focus on the business. I also have the same staffing structure to free me to work on the business, but I’m always available to clients and prospective clients no matter their size. Reputation and referral is everything in business, so I make myself available for good or bad.”

Related: The 7 Traits of the (Really) Wealthy

Tracy-Lee Nicol is an experienced business writer and magazine editor. She was awarded a Masters degree with distinction from Rhodes university in 2010, and in the time since has honed her business acumen and writing skills profiling some of South Africa's most successful entrepreneurs, CEOs, franchisees and franchisors.Find her on Google+.

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How Netflix Is Now Disrupting The Film Industry By Embracing Short-Term Chaos

One wrong move and Netflix could have been nothing more than a footnote in the history of entertainment. But by staying ahead of the curve and embracing disruption, the company is threatening some very entrenched competitors.

GG van Rooyen

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Attendees of the annual Cannes Film Festival are typically not afraid to be vocal in their dislike of a new film — booing and hissing are both surprisingly common — but the recent film Okja possibly set some sort of record. The crowd was booing and jeering before the film had even properly begun. In fact, all it took was the name of the studio behind the film: Netflix.

Why the animosity? Netflix is disrupting the film industry, and the traditionalists aren’t happy. After debuting at Cannes, Okja wasn’t released in cinemas. No, instead it was released right to Netflix, free to stream as long as you have an account.

Of course, few would have guessed a few years ago that Netflix would ever get into the business of making its own television shows and movies. According to industry lore, entrepreneur Reed Hastings launched Netflix because he was annoyed with the exorbitant late fees of video/DVD store Blockbuster.

Instead of having to return a movie once you’ve watched it, he conceived of a business that would ship DVDs right to your door through the mail.

Related: Meet The 40 Richest Self-Made Entrepreneurs On Earth

It was a clever idea, but not one that seemed terribly disruptive. The whole process could be a bit of a hassle, and it required you to schedule your entertainment well ahead of time. Blockbuster even had a chance to buy Netflix, but decided that it wasn’t worth it.

The rise of streaming

Even as Netflix was hitting its stride in the early-2000s, the tide was already turning. It was becoming increasingly clear that the Internet was going to be an incredibly disruptive force, but many companies failed to notice. Or, if they did notice, they failed to take adequate action.

By 2007, the potential of streaming TV shows, films, music and books online was clear, but the DVD business was still doing well. However, Netflix decided to prepare for the future (and disrupt its own operations) by launching a streaming service. It did this by going to the traditional movie studios and television networks, and asking to licence their old content.

In the view of these studios and networks, old pieces of entertainment had run their course, so they were pleased with the new revenue stream.

This brings us back to Okja. Netflix has been creating its own content for the last few years because it realised that studios and networks would eventually catch on. At some point, they would understand that they were giving Netflix the ammunition needed to disrupt the industry. Why have Netflix stream your content if you could create your own streaming service?

“The goal is to become HBO faster than HBO can become us,” Hastings said of one of the most popular American cable channels back in 2013.

In a mere 20 years, Netflix has gone from a low-tech operation that sends DVDs through the mail to one that not only streams content online, but is also producing its own content — content from some of the most respected actors, producers and directors in the world. All of this is costing Netflix hundreds of millions of dollars, and it remains to be seen if this strategy will ultimately pay off, but betting against Netflix is risky.

Related: How To Make Money Investing, According To Ashton Kutcher

Netflix has shown itself to be uniquely capable in drastically shifting its business model. Here is how Hastings explains it: “Short-term optimisation about being efficient is the death of long-term success and innovation. Building Netflix, we created a company that tolerated some short-term chaos, and we manage right at the edge of chaos. The value of that is keeping and stimulating the amazing thinkers, so when the market shifts, like DVD to streaming, or licence to original content, we have in Netflix all kinds of original thinkers, and that is the long-term optimisation that all of us in organisations want.”

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SME Leaders: How You Can Manage Growth

Fresh growth is all around us this Spring – find out how you can powerfully manage growth as you provide leadership to your SME.

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In the transition from start-up to scale-up, a critical factor for a growing business is the quality and strength of its leadership team.

Learning to trust and empower staff is a crucial step for SME leaders who wants to grow their business upwards.

As a business grows, one of the biggest challenges for the business founder and leader is the hand-over of an idea from the founder to the people who work there, The brand moves from being one person’s idea to being the professional focus of a whole group of people.

Without effective leadership, small businesses will be held back, more than three-quarters of SMEs provide no leadership development for their staff. What does this mean for you?

Related: We Went up Against A Highly Regulated, Entrenched Industry. Here Are 4 Tips For Getting Your Foot In The Door

If you lead your business with vision and clarity, you set yourself apart from your competition. Here’s how.

Lead the pack

A growing business creates more work than a leader can handle alone.

As the team grows, founders often react by micromanaging the details of their business. In trying to take on everyone else’s job, the founder often leaves the most critical position vacant: strategist and vision-setting.

Learn to trust and empower others in the organisation and you will find you have room to innovate, which is critical for business growth.

Related: What I Learned About Dating That Will Transform Any Business

Steady the ship

An effective leader will also engage others in the business to embrace and adapt to change as growth continues.

  1. Vision: First, plot the course for where the business should go in the short term, and the long term.
  2. Change: Understand what needs to be put in place to grow the business. You might need to source better business operating systems to streamline this growth, or change a few internal business processes, or rethink how you calculate your hourly rates.
  3. People: Growth equals change, and change equals pain, so if you want growth, budget for pain. Understand that you will need to guide and coach the staff into changing their mindset and adapting to these growth changes.

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We Went up Against A Highly Regulated, Entrenched Industry. Here Are 4 Tips For Getting Your Foot In The Door

Focus on creating value, not disruption.

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Multibillion-dollar legacy industries don’t make it easy for entrepreneurs to step in and create value. There are huge barriers to entry – licensing, pricing, regulations, and cultural/brand significance – that come with being around for a century or more.

However, those barriers shouldn’t stop you from innovating.

Take the utility sector for example, which is perhaps most frightening of all: A trillion-dollar taxpayer subsidized network of poles and wires set up through franchised municipal monopolies. Otherwise known as, our power and energy industry. It’s a mouthful of protection, and as a result, utilities make for a great investment (just ask Warren Buffet), since the likelihood of disruption is tough to even think about. To most reasonable entrepreneurs, the regulated utility sector, similar to the financial and healthcare industries, is tantamount to a “NO TRESPASSING” sign.

But, that is exactly what makes the effort so worthwhile. If you can successfully work with or alongside a monolith industry and produce value, instead of being focused on “disruption,” you’ll be able to achieve massive results.

When we first started trying to provide consumers cleaner and better energy options, getting to market proved difficult as we were trying to break into a utility-customer relationship (paying a power bill) that hasn’t really changed for the last half-century. But, with a clear mission in mind and the understanding that we would have to work in unison with utility providers, we were able to start making our mark.

Related: How to Create a Winning Mindset, to Crush the Competition

Here are a few tips for getting your foot in the door:

1Create value, not disruption

There are some industries where the Silicon Valley catchphrase “disruption” falls flat. Some industries just aren’t meant to be disrupted in the way that people in the tech community are used to. Nearly our entire economy depends on the power grid and we couldn’t come in and totally upheave that. When you’re going after a big industry, you first need to provide value to the customer or the provider. 

Show instead of tell that you have a strong customer base and that people need what you’re offering. And build relationships – working together with the big players in the space will get you much faster and better results for your company and your customers.

2Focus on the customer experience

When you’re a startup, you already have the advantage of being years ahead in your digital experience compared to traditional companies in your space. Own that and hone in on it to make it the best customer experience possible. We looked across sectors to bring modern design, UX and data elements to the home energy experience.

Traditional companies aren’t necessarily thinking that way, and you’ll win people over by offering self-service customer tools, easy payment options and notifications they actually understand. Good communication with your customers goes a long way.

3Start small, build toward the vision

A lot of start-ups begin with very lofty goals – disrupting whole industries and changing the entire way a process is done. We certainly had a broad vision to be the trusted home energy advisor for everything from solar to batteries. But, you’ll never be able to achieve anything if you try to tackle everything all at once in a highly regulated and old-fashioned industry. Instead, to get started, focus on one thing.

For us, it was offering clean energy via renewable energy certificates (REC). By starting small, you’ll be able to learn about and understand the space you’re going into, and will be able to see if there’s a market for what you’re offering. As you learn, you can slowly expand step by step and tackle more complex products in the industry.

Related: Why Flame-Grilled Chicken Franchise Galito’s Opened Up Shop Right Next To The Competition

4Use best practices from other innovative industries.

No industry has a monopoly on good ideas, and the boom in direct-to-consumer brands across apparel, food, finance and healthcare provides a great roadmap for how to build a modern customer experience. Look to other industries that have been there and done it. For example, Mint.com has created an innovation through the consumer interface – in their case to manage finances – while leaving the existing banking and credit card infrastructure in place.

While the thought of breaking into an established industry is definitely intimidating, in today’s entrepreneurial environment it is definitely possible and innovation is desperately needed. Success depends on the ability to shed your typical idea of disruption, and stay patient and persistent.

This article was originally posted here on Entrepreneur.com.

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