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

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

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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.

 

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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
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+.