Watch this video of Rudolf Bornman, a Pick n Pay franchisee, on the franchise.
- Players: Robert Storey and Rudolf Bornman
- Position: Franchisee
- Company: Pick n Pay
- Visit: pnp.co.za
How do you think being in the retail sector at corporate level helped you realise your dream of being a franchise owner?
Corporate helped me to gain the relevant experience that has enabled me to manage my business successfully. I started as a training manager in goods receiving and worked my way up to store manager.
I was later promoted to regional manager and then to general manager of Long Meadow Distribution Centre. This meant I had a good end-to-end view of the retail sector. I also completed my MBA at Henley during this time, which gave me a deeper understanding of the economic environment on both a micro and macro level and what factors will have an impact on your business.
Retail is very complex and as a good manager/owner you need to understand all aspects of the business to make it a success.
First, you need sound admin and accounting experience to ensure you manage your expenses and understand your business.
Next, it’s important to drive sales growth through sales promotions, because without sales growth your business will suffer. Finally, looking after people (your staff and your community) is one of the key values for us and also a principle on which the founder of Pick n Pay, Raymond Ackerman, built this company.
It’s important to ensure you have happy staff who feel cared for. They need to be managed with clear rules, expectations and processes to protect them and your business. Our staff face our customers daily and need to deliver excellent service to them.
What was it about Pick n Pay’s values that appealed to you?
Pick n Pay is still a family-owned business and a very strong brand in the South African retail market. Its focus is on long-term sustainability and not just short-term profits. Head office continues to invest in the brand’s sustainability and long-term growth.
As a franchisee with your own long-term growth goals, this is appealing. The company also has strong values that are very familiar to us and align to our values. Both my business partner and I know the Pick n Pay store processes from store operation to support, and this is a huge advantage for us.
With tight margins, you can’t afford to make any mistakes. We just have too much at risk and need to ensure we minimise that risk and get a good return on our investment.
Pick n Pay is a growing company and this also gives us the opportunity to grow our business. We have the opportunity to buy or open more stores due to the growth of the company.
It’s therefore very important to us to get our business profitable and paid off as quickly as possible, enabling us to open more stores as multiple-unit franchisees.
Why did you choose franchising?
My business partner, Robert Storey, and I wanted to run our own business. Franchising was the best way to enter the retail sector. Due to the competitive nature of this sector in South Africa, it’s important to be part of a strong brand to ensure that you as franchisee are successful and get a good return on your investment with long-term growth and sustainability.
Pick n Pay is a strong, established and successful brand, with a tried, tested, and above-all proven franchise model. While I was researching which brand I wanted to invest in, I looked at various business models and the Pick n Pay franchise model was the best fit for us.
We both had many years of experience in the corporate world, and the brand and its values were appealing to us. We’re proud to be ambassadors for this brand, and that’s the way franchisees should feel. You’re joining an existing system that stands for something.
What’s the biggest challenge you face as a franchisee?
Cash flow, cash flow, cash flow. Without a positive cash flow, you’re doomed. You cannot manage a successful business without managing your expenses and purchases. Without stock, you cannot grow sales and without sales growth you’re doomed.
Second to this is staff. It’s a challenge to get strong and reliable management and keep good staff. People do get other opportunities in life and they will naturally go for those opportunities once presented to them. That’s why you need to treat your people with respect and dignity and always motivate them.
One of our key principles is to treat our staff like family; we put them first. As owners we have a responsibility towards our staff. You need to reprimand and build them, encourage them and reward them for good work done. We believe this enables them to deliver excellent service to our customers.
How would you advise aspiring franchisees on navigating the industry?
Make sure that whatever you do, you’re passionate about. We’re passionate about food; I love good food. We’re also passionate about the business and serving customers.
If you’re not passionate about retail, it will drain you and consume you. I’ve seen people who have lost everything they invested, but I’ve also seen many more people being incredibly successful in retail. It takes hard work, long hours and passion.
It’s also critical to plan and manage your family time, which is one of the main reasons why I have a business partner; together, we can share the load. You must decide what’s important for you before you start. For us, balance between work and family is essential.
It’s also important to take on a business that you have sound knowledge of. You can’t manage a successful business if you don’t understand the processes end to end. Cultural fit is also essential. Do you fit in with the franchise’s company culture and values? Are your values aligned with the company’s values? If the answer is no, walk away.
Related: Make Krispy Kreme Happen
You can’t change their values if misaligned. You’ll just end up frustrated and unhappy, and there will be conflict between you and your franchisor. It’s a lose/lose situation.
Successful franchisees need their franchisor’s support and vice versa.
Finally, brand strength is an essential ingredient. How well is the brand supported in the market sector you’re operating within? When customers have a choice between various brands in a specific area, where do they choose to spend their money?
This is a critical factor as we operate in a very competitive environment and consumers are all under pressure. Choose a brand that has stood the test of time and that you can associate with. You need to be proud of the brand, as you’re essentially a brand ambassador as well as a franchisee. When your customers experience that, then you’ll be able to grow your business.
Why is it important for successful franchises to have a strong relationship with their banking partners, and how does it benefit the franchisor and the franchisee?
It’s important for us to have the support of banking partners that fully understand the business model. We’ve looked at various financial institutions and Nedbank was very professional. In particular, they support and fully understand the Pick n Pay franchise business model.
Banking partners aren’t there just to assist with the upfront investment. It’s even more critical that you have the support of your banking partner once you’ve purchased the business. You’re under huge pressure to ensure you implement the correct processes to manage your business without impacting your customers, and believe me, this is a challenge.
You can’t afford a drop in standards as customers will leave and not return. As a franchisee you need to ensure you deliver high operational standards, are compliant with your franchising agreement and that you’re a good ambassador for the brand.
Good financial management is an essential ingredient for all of these factors, and the right banking partner will assist you in this regard.
South Africa Seeks Innovative Solutions to Payments Systems
How to bridge the divide and bring FinTech technology and a new infrastructure of POS systems to the masses.
News has been circulating that high-level players in South Africa are working hard to introduce structural changes in payments solutions. Some of the biggest players in the industry, including the Payments Association of South Africa, and BankservAfrica have begun work in earnest on facilitating expedited transactions settlements, by adding new payments systems and features into the market.
Financial technology, a.k.a. FinTech is powering the payments gateway to cost-effective solutions for South African businesses, consumers, domestic and international stakeholders. According to industry pundits, the payment system that currently exists in South Africa was formulated in the 1980s. At the time, it was highly regarded by world standards. However, the rampant innovation that has taken place with the Internet of things since then necessitates updating.
Various solutions have been touted, to rethink the infrastructure framework that currently exists in South Africa. The economy is rapidly changing, and mobile technology is being embraced across the board. The South African payments system is long overdue for an upgrade, as shifting priorities and the widespread digitisation of the economy take place. For starters, payments solutions across South Africa must factor in the large underbanked and unbanked sectors of society.
A key industry player, Bankserv which is owned and operated by Standard Bank, ABSA, and Nedbank among others is ringing the changes. Back in 2017, this financial entity processed R188.2 billion worth of ATM transactions. The total number of transactions numbered 452.6 million additionally. It processed 52.5 billion POS transactions valued at R290.9 billion in credit card authorizations in the same year. Electronic funds transfers (EFTs) to the value of R9.4 trillion were also processed by Bankserv. These are significant figures, and they point to a shift in financial transactions processing in South Africa.
Groundbreaking POS Systems to Debut in SA
The widespread innovation currently taking place in POS systems is reshaping retail industry, the food and beverage service, and other merchant networks across the board. One of the industry leaders in this regard is revel systems POS. It is fully integrated with a robust selection of features, the likes of which include superior reporting features, full kiosk functionality, and a modern kitchen display system for the thriving restaurant industry in South Africa. The technology was created back in 2010 by Chris Ciabarra and Lisa Falzone as an innovative Apple iPad point-of-sale system. It was tested in the San Francisco Bay Area and became an instant hit.
Today, the Revel POS system sports 25,000+ terminals around the world, at high profile company such as Cinnabon, Goodwill, Smoothie King and others. South African restaurants and food industry businesses can enjoy monthly subscription fees, and the software license is included in the monthly subscription fee. Flexible pricing is another advantage of using this POS system. Plus, users get to enjoy industry-specific software and integrations that can be used by quick service businesses and restaurants.
It’s ideally suited to businesses that have 500,000 SKUs, although it’s equally adept at serving smaller SA businesses. In terms of ease-of-use, this POS is intuitive for front-end use, and training videos facilitate backend learning and integration. The backend management is particularly effective in terms of training regimens, navigation, and utilisation. All that’s required to get started is an Apple iOS device, and any standard barcode scanner is fully compatible with the system.
Among the many features include the following:
- Fully Functional point-of-sale systems
- Real-Time Inventory control of SKUs, including cost considerations, pricing, inventory, size, colour, style etc. Digital menu boards, kitchen display systems, and kiosk point-of-sale systems are also available
- Purchase Order Management and QuickBooks integration
- Customer Management in terms of purchases, details and personal data is also available.
What Are the Current FinTech Challenges in South Africa?
Contrary to widespread belief, South Africa has one of the most sophisticated payments infrastructures. This is certainly a feather in the cap for South Africa’s financial and FinTech sector. Given that Internet usage is widespread, and the telecom network that facilitates Internet functionality is highly developed, South Africa ranks on par with the best of them.
There are effectively 2 parallel economies operating in South Africa – the first world developed FinTech economy, and the informal economy which dominates the outlying areas. South Africa has a challenge on its hands: How to bridge the divide and bring FinTech technology and a new infrastructure of POS systems to the masses.
Investing In Value Creation Tools Can Help Your Business Grow
ACCA on attracting new clients, establishing and strengthening commercial partnerships and accessing external finance to help your business expand.
The business journey of many SMEs is often characterised by a gradual change in internal management practices which develop as the business operations grow. The subsequent recognition of the business’s value creation, across all its operations – tends to emerge slowly but surely alongside this process.
Gaining an understanding of ongoing value creation can be challenging. This is because smaller companies tend to not have access to simple and understandable data sets on everything, which is and isn’t contributing to value across the business.
For example, customer and supplier relationships, human capital and intellectual property are all common examples of activities where SMEs regularly experience difficulties in determining the real contribution to the businesses’ overall value. These are areas that are not picked up by financial reports that are a focal point of many growing businesses, hence the importance of these areas in business is not given the proper attention it deserves.
However, by improving trust and relationships between customers and those along your supply chain, this information can be used to attract new clients, establish and strengthen commercial partnerships and access external finance to help your business expand.
Key actions to consider when capturing the value within your business include the following:
- Use cloud and data analytics technology to support growth;
- Create a business strategy which incorporates everything;
- Allow staff to use new technologies to innovate; and
- Appreciate the importance of technology in attracting external finance.
These actions will help you succeed in developing a successful business strategy.
Use cloud and data analytics technology to support growth
Purchasing relevant software packages could help you access the data you need to understand where and when value is being created. Cloud and data analytics technology can provide a real-time flow of information, offering detailed measures across workflows, whilst also complementing existing reporting processes.
More long term, this technology can provide you with greater flexibility when anticipating future periods of growth.
For example, when the time comes to up-scale your business operations, it could help your finance function adapt more easily to any additional demands being placed upon it and mitigate the risk of disruption towards ongoing operations.
At the same time investing in this technology doesn’t have to happen overnight. Software packages can be purchased in stages and tailored to meet the specific needs of your business.
Create a business strategy which incorporates everything
Business success will often be determined by how effectively you can combine the value of ongoing operations into the development of a single, overarching business strategy. Understanding of the key strategic themes by employees is critical in aiding future business expansion plans and growth. This integration can support planning processes.
By taking a short, medium and long-term view on how value creation might change across the business, you will be in a much better place to identify upcoming risks and opportunities related to your growth ambitions.
The practical delivery of this might involve regular integrated reporting across your business’s operations. The more data that is involved in this process, the more helpful it will be towards informing your management decisions.
Allow work teams to use new technologies to innovate
Companies might also want to consider supporting work teams in certain areas to come up with new ideas to enhance plans for business growth and learn from possible failures, without the personal risks that entrepreneurship entails.
Allowing employees to use new technologies could help to reduce costs and offer new revenue opportunities as your business expands. It could also help to stimulate a high growth business and to fully communicate business’s value to potential clients and commercial partners.
Appreciate the importance of technology in attracting external finance
Investing in technology at an early stage can help attract external investors, as well as reducing the cost of raising growth finance. Such investors need to be able to understand the broader strategy of your business.
Lenders are increasingly using data to build up a broad perspective on the growth potential of SMEs. If you can provide real-time information – rather than just historical data – of your business’s performance, this could greatly increase the chances of obtaining the finance you need to grow.
However, there remains a gap and potential to co-create new approaches of raising capital amongst growing businesses and in creating agreed terms of sharing risks. This could bolster the advancement of entrepreneurial houses toward creating real economic equity in long term.
Save Your SME Money With A Good Payroll Management System
Not only does an efficient payroll system enhance staff morale and boosts your reputation, it can also save your business significant costs.
Payroll solutions are designed to help hone the strategic focus of your business’ HR department, by shifting HR and payroll managers’ from paperwork to developing and motivating employees.
“The biggest potential saving comes from full compliance with tax and labour laws and regulations,” says Ania Strydom, Compliance Specialist at Sage. “Avoiding the massive costs of fines, interest and penalties that a company risks if it doesn’t comply.”
Here are her tips for conducting payroll, saving money on a good system, and pitfalls to avoid that most SMEs don’t see coming:
Choosing a viable payroll management solution
- Look for a scalable product that can grow alongside the business
- Find a solution with full local support that is kept up to date with relevant labour and tax laws for the markets where the business operates
- Make sure the vendor has a proven track record and local reference sites
- Ensure that the solution is built on flexible modern technology that accommodates today’s trends — mobility and the cloud, for example
- Consider a solution with integrated employee self-service functionality.
Vital considerations when conducting payroll
- Ensure that the payroll department consists of people with a good knowledge of payroll and the required skills set to ensure success and compliance with payroll
- Instil a payroll environment that does not need regular review
- Conduct regular payroll compliance audits to ensure compliance minimises the risk of exposure.
How a good payroll management system actually save you money
- Using automated payroll software with employee self-service functions can help organisations save time as it diminishes the need for manual data capture, calculations, reporting or returns
- Rest easy knowing that automation reduces the possibility of human error, allowing businesses to focus on strategy, customers, and employee engagement rather than on red tape
- Payroll can help businesses understand how employees are contributing to profitability, what resources are needed, the cost for major projects, and identifying gaps or surpluses in their human capacity
- The risks of payroll fraud and incorrect payments are reduced by giving managers better visibility into transactions, providing an audit trail, and providing a set of controls, checks and balances
- The biggest potential saving comes from full compliance with tax and labour laws and regulations – avoiding the massive costs of fines, interest and penalties that a company risks if it doesn’t comply.
Avoid payroll errors SMEs typically make
- The use of manual solutions due to tight budgets. They should instead, look at affordable, cloud-based solutions that are priced per payslip per month instead
- Failing to enforce separation of duties. Different people should have responsibility for capturing payroll data and for managing access to the system as well as adding and removing employees from the payroll. Another person checking that the numbers add up could reduce risks of fraud and error
- Not keeping abreast of changes to tax and labour laws such as the Employment Tax Incentive.
- Beauty Of Failure: The Art Of Embracing Rejection
- 3 Tips For Succeeding After You Fail
- South Africa Seeks Innovative Solutions to Payments Systems
- Tsogo Sun Entrepreneurs Takes On 30 New Businesses
- 2018 National Budget: What To expect?
- #SONA2018: Upbeat Address Offers Inspiring Message For South African Entrepreneurs
- LaunchLab Fellows – Great Opportunities For Aspirational Young African Students
Start-up Industry Specific3 months ago
How Do I Start A Transport Or Logistics Business?
Upstarts3 months ago
10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets
Business Plan Advice3 months ago
Writing a Business Plan May Not Be Your Idea Of Fun, But It Forces You To Build These 4 Crucial Habits
Company Posts1 month ago
Enhance Your Entrepreneurial Flair With An Online Postgraduate Diploma From The University Of Pretoria