Watch this video on Trudi van Niekerk, Nando’s, with advice on running a company.
- Player: Trudi van Niekerk
- Position: Business Development Director
- Company: Nando’s
- Visit: nandos.co.za
Running a company — regardless of size — in South Africa can be challenging. Resource constraints, economic and political uncertainty all make consumer spending rather conservative at times. Nando’s Business Development Director Trudi van Niekerk knows this.
“The biggest daily challenge is that we are people-reliant, so we are driven to make the guest experience a good one,” says Van Niekerk.
“We ensure the guest leaves with the best possible experience, even if the staff is having a bad day.”
Nando’s knows what it’s doing. Van Niekerk says it’s about the people who make the chicken. “We invest heavily in our people; our Nandocas. Be it training or taking care of their basic needs such as health care and ongoing education.” It’s a differentiator that has seen the franchise chain continuing to grow year-on-year, even with the massive amount of global competition flooding the market.
“We operate in a very competitive environment and over the past 30 years many large international food brands have entered the local market,” affirms Van Niekerk.
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“Despite this, we have shown very impressive growth in both sales and market share in recent years. We have invested heavily in our brand and today it is one of the most loved brands in South Africa. We never compromise on product quality and we truly believe we sell the best tasting flame grilled peri-peri chicken in the world.”
Keeping the brand grounded
“Nando’s owns a third of its existing footprint, which helps it to stay in touch with its market and the restaurant business model, which in turn, benefits franchisees,” says Van Niekerk. Not only does this mean the company will suffer most if the business goes awry, but it’s a great way to try out new products and ideas without using franchisees’ funds.
“It provides us with a great platform for trialling new staff incentives, looking at different layouts and testing new menu products’ viability.”
Nando’s has established itself in around 21 countries and plans to continue expansion in the near future, along with rolling out a lot more of its drive-thru models, which have proven very successful within the South African market, according to Van Niekerk.
“We’re potentially taking that idea into other markets we’re currently trading in. We’re also very focused on some new menu innovation ideas.”
Van Niekerk delves further into Nando’s success, future plans, and how Nedbank is helping to get them there.
Why is it important for successful franchises to have a strong relationship with their banking partners, and how does it benefit both the franchisor and the franchisee?
Having a strong relationship with their banking partners is critical for franchisees as it will assist them both in their short-term cash flow needs as well as their future growth plans. They need to have a financial partner that understands their business and can advise them of the best funding or investment mechanisms.
Nedbank’s Franchise Division has built up a strong track record and understanding of franchised businesses over the years. They understand the financial implications of a franchised business and are geared to tailor-make banking packages for a particular brand.
What attracts franchisees to Nando’s?
The important thing in business is to have a business model that works. Franchisees need a healthy pay-back period so that they can generate a good return on investment. In addition to this, we provide a strong support base to our franchised system.
What are some of your biggest achievements that other franchise brands can learn from?
We have always stuck to our core values, namely pride, passion, courage, integrity and family. Those values are the point from which we make all of our business decisions, and act as a guiding light, no matter what challenges or innovations we are facing.
Related: 3 Secrets To Franchising Success
What role do your marketing campaigns and social media presence play in your success as a business?
Our ads define and create the brand character that is Nando’s. We have become a social commentary brand in SA and we can say what other people are thinking. But we never lose sight of the fact that the goal of the advertising is to get guests to the restaurants, and to make people remember and think about the brand.
Fundamentally we are a brand that cares about the things that most South Africans care about, and so when we’re ‘firing things up’ (be it online or on TV) we are connecting with the hearts of our consumers. That connection builds brand love and has built the Nando’s business you know and love today.
Banking on success
“Nedbank has made a significant contribution to our business, especially in supporting us and our franchise base to effect changes, which keep us ahead of the pack,” says Van Niekerk.
“They understand franchising and individual franchisees’ needs. They don’t lose sight of the fact that they’re banking a brand and they give the franchisee the benefit of being part of a bigger umbrella organisation.
“Nedbank has been a key business partner to Nando’s over the years. This helped us to grow both the brand and our franchisees.”
Is The Future Of AI Around the Corner? Computing Power Suppliers Are Shifting Gears
Here, we look at the challenges faced by cloud-based computing, and some potential solutions.
Artificial Intelligence (AI) is changing everything from the information we see on our Facebook feeds, to improving diagnosis and treatment of medical conditions.
According to McKinsey, it has the potential to create an additional $13 trillion in global economic output by 2030. Governments and start-ups alike are scrambling to ensure they are in a position to enjoy the economic benefits that AI will bring.
However, despite the apparent potential, there’s one significant bottleneck — the supply of computational power required to develop and drive AI products and solutions.
At present, cloud-based providers of computing resources are striving to keep up with the pace of development in power hungry AI. Here, we look at the challenges faced by cloud-based computing, and some potential solutions.
Challenge 1 – Supply and Demand
AI relies on data and lots of it. As such, the computational demand of AI is growing — one report estimates that the amount of compute used by AI currently has a three and a half month doubling time.
As things stand, AI developers are dependent on computing capacity from the $247 billion cloud computing industry. This industry is dominated by four corporate IT firms – Amazon, Microsoft, Google, and IBM, collectively known as the ‘Big Four’. These companies rely on their vast centralised data centres to keep the world’s cloud computing services running.
In an attempt to meet the growing demand for AI computing services, investment in data centres is also growing at a startling pace. Computing firms spent $27 billion in the first quarter of 2018, with most of that expenditure thought to be directed into developing data centres. Compare this with the $74 billion spent in 2017, and the pace of growth is evident.
The question is, how long can the computing firms continue to keep up with demand using the traditional datacenter model?
In an attempt to stem demand, the big IT firms are increasing their costs.
With AI services requiring massive computational power before they can go to market, the rising cost of computing risks stifling innovation, particularly for smaller developers.
Challenge 2 – Environmental Sustainability
If the only way to meet demand is to build more data centres, then this means more electricity-hungry machines. It’s reported that 2% of all CO2 emissions globally emerge from the datacenter industry — more than the airline industry.
Just this month, the United States of America’s Department of Energy reported that data centres in their country accounted for around 2% of the overall energy consumption.
While owners are investigating green energy alternatives, the fact remains that more data centres will result in higher energy consumption.
Challenge 3 – A single point of failure
Amazon famously brought down a number of large websites last year when an employee accidentally took more servers offline than intended. That event sparked a domino effect that was felt globally.
It’s natural that single points of failure raise the risk of an incident having a more substantial impact. With cloud data provided by just four companies from a limited number of data centres, that risk is always present.
A Quantum of Solace?
Chinese marketplace Alibaba is also in the business of cloud computing, albeit not yet one of the ‘Big Four’ However, its representatives have clearly stated that the company has market leader Amazon firmly in its sights.
Earlier this year, Alibaba launched its first cloud quantum computer, capable of processing 11 quantum bits (qubit). A typical computer chip is binary, meaning it can only process values of 0 or 1 at any given moment depending on its speed. A quantum computer is capable of handling both at the same time, meaning a single qubit can participate in many millions of processes.
Alibaba has pledged to continue development in this area, having already invested $15.5 billion at the end of last year. IBM is also firmly invested in quantum computing, having launched its own quantum computer last year. Quantum computers could ultimately do away with the need for centralised data centres.
From Cloud Computing to Distributed Computing
While some commentators have predicted a wait of five to ten years for quantum computing solutions to cope with demand, a few start-ups are working to meet the requirements of cloud computing on a shorter timeline. One start-up has devised a scalable solution, which it says will be up and running as early as 2019.
Tatau, which calls itself the “Uber of Computing,” has designed a platform which essentially creates a global supercomputer to harness the joint capacity of already existing GPU computing capacity.
By utilising a resource that already exists, the company claims it can offer cloud computing that is cheaper, more environmentally friendly, and more scalable than current solutions. Moreover, a decentralised model doesn’t have a single point of failure, reducing the risk of downtime or hacks.
Tatau’s decentralised network taps into the computing capacity that sits outside of data centres. The company has designed a blockchain-driven marketplace where owners of GPU hardware can sell under-utilised computing power to a buyer. By utilising latent capacity, this solution provides a way for owners of hardware to receive better returns on their investment, and provide access to reliable, cost-effective compute previously unavailable to AI developers.
The Future for AI Development
Given the growing demand for AI services, the computing sector needs to find a way to meet the need for computing services. Given the challenges inherent in the current datacenter model, it seems likely that quantum or distributed computing could ultimately take off.
The question will be, are the current ‘Big Four’ market players ready to compete on a different playing field?
Organisational Design Disruptions Do Not Occur In A Vacuum: Future Business Models
What is the shape of the world in which models need to operate and how do they come together to build future value?
In today’s ever-changing world, organisations are using a disruptive business model design to build unique approaches to creating value and organisations that are ready for the future.
At all scales, from micro-enterprise to multinational, operating in multiple settings and contexts, rethinking business models has become one of definite ways of offering customers something truly better than what already exists.
To ensure sustainable business growth, businesses need to navigate modern economic development and societal issues and in so doing articulate what meaningful, inclusive and enduring value looks like. In the past, a linear approach to business model design may have sufficed – inputs enter a logical process that creates outputs of value.
Today, to truly deliver a value proposition that can flourish, an understanding of the way that complex adaptive systems come together to create both outputs and outcomes is required. ACCA identified12 characteristics that organisations are combining as they build new business models. The full model and characteristics can be read here.
The accountancy profession is well placed to support the growth of business models of the future that help build resilient, inclusive and prosperous societies, by leading in strategic roles. In order to be ready to make the most of these opportunities professional accountants will demand new skills. Financial acumen, technical knowledge and ethical judgement are attributes that the accountancy profession can uniquely bring to support business model innovation across the three spheres of value proposition, value creation and value capture.
But to navigate the contours of a changing economy, new mindsets are required. These include the ability to:
- think like a system
- understand how to capture and assess new sources of value
- build creative capabilities to think differently and problem solve
- adopt a long-term mindset.
Business models of the future: Systems, convergence and characteristics attempts to answer fundamental questions; why does business model innovation matter? What is the shape of the world in which models need to operate and how do they come together to build future value?
An Introduction To COID Registration And The Letter Of Good Standing
Company Partners is a leading COID Registration Service Provider in South Africa. They also assist Companies to obtain a Letter of Good Standing from COIDA.
What is COIDA?
The Compensation for Occupational Injuries and Diseases Act (Act 130 of 1993) replaced the “Workmen’s Compensation Act” (Act No. 30 of 1941), and was amended in 1997.
The Compensation Fund provides compensation for occupational injuries or diseases sustained or contracted by employees in the course and scope of their employment, or their dependents for death resulting from such injuries or disease, and to pay reasonable medical expenses incurred.
Who must register with COID?
According to prescription, anyone who employs one or more part- or full time workers must register with the Compensation Fund and pay annual assessment fees. The Compensation Fund is a trust fund that is controlled by the Compensation Commissioner and employer contributes to the Compensation Fund. The Commissioner is appointed to administer the Fund and approve claims lodge by employees or their dependants.
An employer must register with COID within seven days after the day on which he employs his first employee. An employer must register with the Commissioner by submitting Form W.As.2 with the particulars required therein to the Commissioner.
During COID registration copies of the following documentation should be included:
- the registration certificate from the Register of Companies if they are a company or closed corporation;
- or their ID document, if they are sole owners of the business.
What are assessment fees?
The annual assessment fee is of an employer is based on their employee’s earnings and the risks associated with the type of work or profession. Before 31 March each year, all employers (including contractors) must submit a statement (return) of earnings reflecting amount paid to all their workers from the beginning of March to the end of February.
Assessment tariffs, reviewed annually, are based on the risks related to a particular type of work.
Payment of assessments
- Employers must pay within 30 days of receiving the notice of assessment;
- Employers must apply in writing to settle assessments in installments (not exceeding 12 months);
- 20% of the outstanding balance due is required upfront before instalment arrangements can be applied for;
- Should the instalment fall overdue, the full amount becomes due and payable immediately.
Failure to comply may result in:
- Penalty can be imposed for late submission of ROE (Sect 83(2) – 10%);
- Estimations will be done if no returns (ROE) are submitted (Sect 83(6)(a);
- Penalty on non-payment of assessments (Sect 87(1) – 10%);
- Interest on late payment of assessment (prevailing prime rate);
- Penalty for late reporting of accidents
- A penalty is imposed where an employee meets an accident / death and employer is not registered with the Compensation Fund (not exceeding full compensation payable to the employee (Sect 87(2)(a))
- An employer who fails to comply with a provision of this section shall be guilty of an offence – Sect 81(3)
Contractors and sub-contractors:
- Contractors and sub-contractors must register with the Compensation Fund and pay assessments;
- Failure to comply with the COID Act by the sub-contractor will make the mandatory or main contractor to be responsible for any claims from the sub-contractor’s employees (thus the need for a letter of good standing);
- The contractor may recover any such payments directly from the sub-contractor.
Letter of Good Standing:
The Letter of Good Standing is a certificate issued by the Compensation Fund to verify that a business actually exists, has paid all its statutory dues, has met all filing requirements and, therefore, is authorised to operate.
Conditions when applying for a letter of good standing:
- Employer must be registered with the Fund as per section 80 of the COID Act,
- Employer must have submitted all returns of earnings as per section 82 0f the COID Act,
- Employer must be fully assessed as per section 83 of the COID Act,
- Employer must have paid/ settled all outstanding debt as per section 86 of the COID Act.
- Employers that have entered into an instalment arrangement will only be issued with a letter of good standing on a month‐to‐month basis.
Related: Register A Company In South Africa
What happens if an employee is injured?
The amount of compensation paid to you, depends on how much you were earning when you got injured or diagnosed. If you’ve stopped working by the time a disease is diagnosed, the compensation will be worked out according to what you would’ve been earning.
Types of compensation:
Medical costs: All your medical expenses will be paid for up to 2 years, from the date of the accident or the diagnosis of the disease. You are free to choose a medical service provider you want to consult with. All medical accounts and reports should be submitted to the Commissioner.
Temporary disability: When you’re unable to work or can’t do all your work because of an injury or disease.
All medical expenses are also paid if the medical accounts are submitted to the Commissioner.
You can claim compensation for temporary disability for 1 year. This can be extended to 2 years, after which the Commissioner may decide that the condition is permanent and grant compensation on the basis of permanent disability.
Permanent disability: A permanent disability is an injury or illness that you will never recover from. The seriousness of the disability will determine whether you’ll never be able to work again or whether you’ll find work more difficult. If the disability is more than 30% disability, you will get paid a monthly pension. The size of the pension depends on what your wages were and on the seriousness of the disability. If the disability is 30% or less, you’ll get paid a lump sum. The lump sum payment is a once-off payment.
Death benefits: Burial expenses will be paid and the spouse of the deceased and children under the age of 18 (including illegitimate, adopted and step-children) are entitled to compensation. If a family member that earns money to support the family (breadwinner) is killed by an occupational injury or disease, dependants can claim from the fund.
Established in 2006, Company Partners guarantees that the services they offer meet the standards of the best in the industry. Over 30 full-time Consultants offer services and standards of the highest quality.
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