The Start-Up Story
My career before entrepreneurship was under new product development in Woolworths. Then in 2006 I left to run my own luxury guest house in Summerstrand, Port Elizabeth.
I would make our own muesli using healthy ingredients and guests loved it so much they wanted to buy it. Cadbury’s was also a regular guest and they wanted to buy my recipe. I was very flattered but didn’t act on the idea, focusing instead on the guest house and other entrepreneurial projects.
By May 2013 my husband and I were struggling to make ends meet, we shared his car, and I was now raising a baby girl. I had to do something to bring in extra income. That’s when my attention returned to muesli.
The Lean Approach into Launch
March 2013. With almost no money I couldn’t buy large quantities of ingredients so I used the kitchen oven, lived very sparingly and started small by selling muesli to guests, friends and family.
As my daughter grew, it became harder to care for her and watch over roasting muesli, so we took our last few thousand rand and tried to build a steel roasting drum. It didn’t work.
Undeterred I approached a local engineer to help design a muesli roaster and he told me about a nearby chicory roasting factory. It turned out they had extra capacity, so I negotiated to rent one of their roasters and pay after sales.
Turning Hiccups into Wins
April – June 2013. The first few batches in the bigger roaster were a complete flop, but there was a positive outcome – we had inadvertently created a muesli pop that would later become a popular product in our range. With a few tries we then mastered roasting muesli in the bigger oven.
With increased production, I approached local hotels, but learnt that the larger chains have strict regulations. The answer was smaller chains and independent hotels. I had to be really persistent to get meetings with chefs, but once they tried it they realised the quality and cost worked out to be a huge convenience for them!
Setting Audacious Goals
June – July 2013. While I was giving samples and building clients around Port Elizabeth, I signed up for the four-day Kirkwood Wildsfees, a large annual expo. That gave me just two months to get a professional logo, packaging and produce enough to sell there.
I approached my local SEDA and, impressed with my business plan and numbers, they agreed to assist with packaging and design which only arrived three days before the expo. I poured everything into Wildsfees. I’d played with numbers gestimating visitors and likelihood of sales and came to 1,2 tonnes of muesli that I financed with previous sales. I recruited two of my friends to help and we camped to save money.
We got people sampling and we didn’t just sell out everything; we had orders for another 800kgs! We had to start roasting the minute we got back, and I used some of the profits to buy equipment to help grow the business further.
Getting into Retail
August – October 2013. The Wildsfees really excited and motivated me, which is why I turned to retail. I approached some Eastern Cape grocery stores and began stocking there, while I continued attending national festivals to build brand awareness.
I wanted to get into national retailers but discovered we didn’t have the necessary food and ISO accreditations, so I hired a consultant who helped me implement the necessary systems in my business to get the right accreditations.
Making Big, Bold Moves
Unfortunately the chicory factory didn’t have the needed accreditations, so we had to find a new plan. I applied for R30 million in IDC funding but it was rejected.
In hindsight it was a great learning curve that forced me to gain a better understanding of my business, that would help with future funding applications, plus I don’t think we were ready back then.
With research we learnt about contract manufacturing, which meant we rented space in an existing manufacturing plant, and could therefore grow without huge debt. We found a facility in Joburg and customised it with some of our machines.
By October 2013 we were roasting and distributing from Joburg and we had all the right accreditations to approach Pick n Pay. There are horror stories about buyers steam-rolling entrepreneurs, but we found them eager to help and supportive of our business. The negotiations to supply Pick n Pay increased our production considerably.
November – December 2013. Early in the business I got the Nielsen Report for the cereal market and saw big growth for functional cereal – food that’s nutritious, not just filling. Now, with a steady income we knew the time was right to break into the functional cereal market and develop Nutristart, but this would require a lot of finance.
SEDA put us on to Anglo Zimele, and we approached them and the Eastern Cape Development Corporation (ECDC) for finance.
Anglo’s fund manager told us what documents we’d need to submit with our application and we realised we didn’t even have a tax clearance certificate; I was just a one woman show at festivals. I went into overdrive working for weeks and through the nights so I could compile everything accurately.
Both Anglo and ECDC could see the business’s potential and we landed R4,8 million from Anglo Zimele, which went into six months of product development and testing, and a further R4,9 million from ECDC for launching and financing key staff. Through our contract manufacturer we found and employed a great general manager to allow me to focus on product development and relationship building.
We’re now looking into export deals to the US, and I’ve developed recipes with another company and supply them with ingredients for their products which helps with revenue streams and mentorship.
Top lessons for aspiring entrepreneurs
- Start small
- Learn as you go
- Just keep trying
- Negotiate your butt off
- Get yourself out there
- Set big hairy audacious goals
- Don’t be afraid to ask for help
Don’t be defeated when you get rejected
- Get busy partnering
- Keep doing research
- Be prepared
- Focus! Chase one rabbit at a time.
What Lize Did Right
Lize is not your typical entrepreneur who spent years dreaming about being her own boss and running her own business, instead she became an entrepreneur through circumstances. The advantage of this was that she wasn’t chasing a ‘blue sky’ dream – she had to make this work!
The first thing that she did right was returning to basics. She used her previous experience and made that her business focus. She knew that muesli was popular, there was a market demand for it and there had been a market pull with Cadbury’s requesting the recipe. She also kept her inputs minimal, her process lean and cultivated expenses throughout her operating process.
Lize did not allow setbacks or disappointments to deter her business focus. Remaining positive helped to overcome obstacles and keep her business moving forward. Lize also promoted her business in clever and visible ways so that she would reach her target market effectively.
One of the greatest limitations that most entrepreneurs face is their inability to ask for help. Or their unwillingness to share a piece of their pie by engaging in partnerships. Lize saw the positive opportunities which could result from getting help and from linking her strengths with others. The outcome proved constructive.
Finally, Lize paced her company growth conservatively and intelligently. She took logical steps to grow in the right direction and when the time was right.
The bottom line is that Lize kept level-headed about her business. She did not allow her ego or emotions to derail her focus, and most importantly, she knew there was demand for her product, which was something that she was familiar with and able to work with comfortably.