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.
Executive Education Geared For Industry 4.0
The Johannesburg Business School (JBS) was established in 2017 as part of the College of Business and Economics at the University of Johannesburg.
JBS offers a range of innovative executive programmes, expertly designed to develop effective, ethical and enterprising African leaders. With an emphasis on contextual intelligence, leaders are equipped to successfully navigate and overcome the complexities of today’s world, while advancing the evolution of the business environment for the benefit of their organisations and society.
All programmes designed and delivered by the JBS are grounded in the African context, with a strong global connection, for disruptors, entrepreneurs and managers alike. Business with purpose and an impact on the community, increasingly part of day-to-day business in Africa, underpins what JBS represents and does.
JBS is built around three pillars:
- Delivering world-class business education with a focus on the African context.
- Designing programmes geared for Industry 4.0 and the future world of work.
- Providing a platform to stimulate and inform purpose-driven business practices towards a collective impact across the continent.
We are authentically African with disruption and innovation at heart
At JBS we believe higher education is vital to the Fourth Industrial Revolution and ensuring that Africa becomes ‘future fit’. As such, the JBS partners with entities outside of the conventional business education space, with the idea to innovate and reinvent leadership development and education in an ever-changing business environment.
Our Executive Education portfolio provides managers and leaders with offerings that are relevant to the complex and disruptive nature of work, arming them with the skills to successfully navigate the rapidly changing business environment.
Our programmes are delivered with best in class faculty who encourage critical analysis and thinking, while emphasising contextual intelligence and conscious learning. The aim of our offerings is to advance the evolution of the business environment for the benefit of organisations and society at large.
JBS offers bespoke training programmes aligned to organisational strategic imperatives and people development frameworks. Our short courses are designed to equip entrepreneurs and leaders with functional excellence across the practice of management.
The JBS Masterclass offerings is growing in popularity and is available in cross-disciplinary fields, like Strategy, Marketing, Human Resources, Innovation, Coaching and Mentoring, to name a few. These 3-hour interactive sessions provide delegates with the latest insights and a practical view of shifting trends and their impact on business.
Visit www.jbs.ac.za for more information on upcoming programmes
Changing The Shape Of What’s Possible
Here’s how TomTom Telematics is changing the present (and the future), and the lessons in innovation that you can learn from a game-changer.
- Player: Thomas Schmidt
- Company: TomTom Telematics
- Position: MD
- Visit: telematics.tomtom.com/en_za/webfleet/
To be a successful company in today’s fast-paced and ever-changing market, you need three key ingredients: Access to markets (which starts with products that clients need), short-term agility and long-term goals.
Consider the epic success of Apple. Steve Jobs was hungry and fast — he drove his teams to achieve more in less time. But he also had a long-term vision that directed the business’s trajectory. True innovation is the result of looking five to ten years into the future, and laying the groundwork now for where the company needs to be then.
TomTom started out in 1991 as a software provider for Palm Pilots, long before the Internet was a thing, or GPS had been opened for civil usage. Today, the listed company’s latest acquisition is Autonomous, a business that focuses on navigation systems for driverless cars. Over the course of almost three decades, TomTom has consistently focused on what comes next: What do consumer and business clients need, where will technology take us, and what will be possible in the near future, enabling greater efficiencies?
Thomas Schmidt, MD of TomTom Telematics, unpacks the five lessons TomTom has learnt while developing world-class solutions for the consumer and B2B markets worldwide.
1. Focus on the problem you’re solving, not on the product you produce
Companies that are too fixated on what they do, instead of where technology and markets are heading, will often find themselves left behind. The most common example is Kodak, who refused to see the dangers digital photography posed. Instead of seeing themselves as a company that helped people capture moments, they saw themselves as manufacturers of films and cameras. The rest of course, is history.
Robust businesses reinvent themselves, adjusting solutions to fit the market and making use of technological breakthroughs. “In 1991, the founders of TomTom launched a company called Palmtop,” says Thomas.
“They designed and created the software for digital organisers. In principle, it was like a smartphone with no connectivity, and included a digital bible, a digital cookbook, a personal organiser, a calendar and a whole host of other features. By the late 90s it even included a digital map, which they had licensed through Tele Atlas, a Belgian company that developed very basic digital maps.”
Here’s how it worked: You bought a PalmPilot, purchased the map software, uploaded it to your device, and then purchased the cables and mountings that you’d need to instal the whole system in your car. It was complicated and something that only techies were really trying out, but it triggered something in the TomTom (at that stage Palmtop) team, who recognised that if they could remove the tech hurdles to get there, they’d democratise navigation.
The company had been a forerunner in the personal organiser software business. Based on where they believed the market was heading however, they began to shift their focus to hardware, and began manufacturing personal navigation devices (PNDs), complete with digital maps licensed through Tele Atlas.
By 2003 the business had been rebranded to TomTom and their first device, the TomTom Go, was launched. From there the business consistently grew 400% year-on-year, and an IPO was concluded in May 2005.
In hindsight, the shift looks simple, but in reality, it’s never easy to reinvent yourself as a business, unless you’re agile, adaptable, and willing to focus on the best solution, rather than what your current product stack looks like.
2. Always look ahead
Great visions always precede technological solutions. If they didn’t, nothing would ever progress or change. The companies capable of those visions become the trailblazers and game-changers that shape industries, solve problems and drive greater efficiencies.
The evolution of TomTom’s dynamic map data is a perfect example of this mindset in action, because the team kept asking what would make their product more useful to consumers. They had the device, and a digital map. What they didn’t have was mobile data.
Instead, Tele Atlas had vans driving around, capturing everything. It was time consuming, expensive, and meant maps were always out of date. They also weren’t dynamic.
“When you consider the fact that 15% of a map’s data changes yearly, we knew there was so much more we could do with this product if we just had the right tools, and developed appropriate solutions,” explains Thomas.
TomTom’s team started by looking to the future: What did they want this product to look like? The answer was simple: They wanted a navigation system that was dynamic and up-to-date. If anything happened, a user would know within minutes. This would include traffic, accidents, traffic lights that weren’t working, delays — anything and everything that would add value to a motorist or business with vehicles on the road. Today, this includes data drawn from how a vehicle is operating and how the driver is performing, right through to its location with regard to a dynamic map, and the capability to send companies and clients up-to-date information.
The technology that has made all this possible came after the idea of what the team wanted to achieve. With the right starting point, they were able to develop solutions that were possible. “We had millions of units on the road. We created a functionality that allowed users to update information on the map when they plugged it into their computers to update the software.”
The problem was that it was a slow process. By the time TomTom gathered the data, sent it to Tele Atlas, and the changes were implemented and released in an update, months had passed. Consumers lost interest because it took so long to see a change.
So, the team went back to the problem to engineer a different solution. “We went back to the data we were collecting, and started comparing that data with the map. What were speed averages on different roads? Based on this, we could predict times of the day when you could expect traffic congestion and delays. We also paid attention to roads on the map that no one used, or areas with no roads that nevertheless had traffic. These were flagged as out-dated areas on the map, and we could send vans to check those areas only. It was all based on historical data, but we were adding more information to the map on a continuous basis.”
The next component to be added to the mix was telematics. Thomas’ company, Data Factory, was purchased by TomTom in 2005. “Telematics brought more data early on to TomTom. This was real-time data that could be deployed elsewhere. In the early days we were using trunket radios to capture data, but it was all fed into the system. An average car spends less than an hour on the road each day. Compare this to six hours for a business car, and up to 12 hours for a truck, and you’ll get a view of how much data we were actually collecting. The trick was to continuously ask how we could use the data, and what we could do with it. It was not yet a dynamic system, but we were constantly moving forward and improving. We kept asking, ‘If we had this, what could we do with it?’”
TomTom also made another decision, and offered to purchase Tele Atlas in 2008. “We recognised that the future was fresh, up-to-date data. If we owned the maps, we can streamline the process. Two different companies, even working in partnership, create a lot of delays.
“Increasing efficiencies wherever you can is in our DNA. That’s what we do for customers. And it’s why we’ve been able to offer our customers up-to-date dynamic maps that are data-rich and create a seamless customer experience.”
3. Adapt to the future
This takes the ideal of looking ahead a step further. On the one hand, looking ahead is focused on the lane you’re currently in, and envisioning how you can change customer lives. But it’s also about paying attention to how the world is changing, and what the future will bring.
TomTom is currently a software and hardware developer. The business has four divisions: TomTom Consumer, TomTom Automotive, TomTom Licensing and TomTom Telematics. In each case, hardware and software solutions are deployed to drive efficiencies and cost savings, from consumers with a TomTom device in their vehicles, cars with onboard systems designed by TomTom, telematics systems that track a business’s entire transport and logistics solution, to the map data as one of the sources for Apple’s map solution.
But TomTom is looking much further than the solutions it currently offers. “TomTom democratised navigation, and today it’s available in multiple different ways; your phone, a device, your car. We understand this and move with the times. We expect technology disruption to go on and things to change even faster in the future. Today we manufacture devices. We don’t believe we will still be doing this in the long-term future. How our solutions will be accessed will change. We are also now investing heavily in the navigation systems and maps autonomous cars will use. This isn’t a big revenue stream for us now, but it will be incredibly important in the future, and we will have solutions ready.
“To stay alive, you need to be smarter, faster and the master in your specific area of competence. At our core we bring customers, data and development together. It’s always about the best experience and solutions.”
4. Be fast, agile and adaptable
Even though TomTom is a listed company, its controlling shareholding rests in the hands of four people — all of whom are entrepreneurs. “TomTom’s original founders still head up the business and drive its vision, and the four different business units are run by MDs who are entrepreneurial as well,” explains Thomas, who is one of those MDs, and who by his own admission could never be a standard employee.
“Data Factory was the third business I built, and I sold it to TomTom in 2005 because I knew this was the best way to achieve international growth. 12 years later I’m still here as MD of the Telematics business because our CEO and founder, Harold Goddijn, convinced me to stay and grow the exciting business unit. The fact that we’re given so much autonomy to grow each business unit as a company makes us fast, agile and adaptable. It’s the essence of this business. We all have a fiduciary duty to our shareholders, but we also have long-term visions that allow us to be trailblazers in our industry.
“We’re not executives who begin to implement projects and then leave. We’re focused on long-term, industry changing visions that will change the way our customers operate and do business. That’s what gets me up in the morning and keeps me constantly engaged and excited.”
The business is also run on a system of flat hierarchies, which Thomas believes is a key ingredient to TomTom’s success. “No single giant can know or understand everything. To remain relevant, businesses need fresh ideas, and these come from open and collaborative teams. As the leader, you don’t need to come up with all of the ideas — but you do need to be open to fresh thinking, even from your juniors. Have an open door policy, and listen to ideas when they are shared with you. That’s how you push the envelope.”
5. Give customers what they need, not what they want
Listening to customers is important, but you also need to look beyond their current needs if you’re going to be a game- changer — both in your own industry, and in terms of what you can do for your customers.
“Take note of your customers’ pain points and deliver solutions that create value, but you can’t innovate if you only listen to what your customers want. You need to be delivering to their needs, otherwise you’re just an executor and not an innovator.
“It’s up to you to jump to the next step that they can’t see yet, and often don’t even realise is possible. Customers are focused on the now — we need to be looking five years ahead.”
How do you stay ahead of the curve though? Thomas believes it’s all about asking the right questions.
“Consider the question, ‘What if we had unlimited energy for free in the world?’ So many people stop there and don’t ask further, because it’s seen as an impossibility. And that’s what kills innovation. If you remove that obstacle, and instead look at what this would mean for the world, you can start shaping a different future.
“So, what would it mean? It would mean an unlimited water supply, because we could easily make drinking water from salt water, at little to no cost. What does unlimited drinking water mean? An unlimited food supply, because water is the biggest restrictor. Once you start asking the right questions, you reach a future that you want to be a part of and make happen — and that’s when you start finding solutions.
“Solar is already doing this, at 50% of the cost of other alternatives. The latest technology delivers at 50% of the price, and it was developed because the right questions are being asked.
“This is how we operate. We are always dreaming about what we could do. This allows us to create solutions. They don’t always work, but we’re hungry, and when we fail we fail fast, learn the lessons we need and push on. We’re always heading in the right direction, and changing the shape of what’s possible.”
Set Up Your SME For Success With Fibre
Boost your business potential when you plug into fibre. It offers unprecedented benefits, taking your business to the next level of connectivity.
More South Africans are turning to fibre for fast Internet access. We’re witnessing a boom in fibre expansion and as a result, it’s becoming a more affordable option for SMEs. Once businesses connect to fibre, they can access a reliable, ultra high-speed connection that unlocks the full advantage of cloud-based processing.
Cater to usage demands
A slow Internet connection can derail your business. It’s imperative for business owners to prepare their networks to handle additional usage requirements. Failing to do this might lead to interruptions, slowdowns and a potential impact on your bottom line. An Internet connection should be a tool that supports innovation and uninterrupted productivity.
Shift to the cloud
More businesses are accessing cloud-hosted information via Software-as-a-Service (SaaS) tools and other platforms. In 2018, nine out of 10 companies in South Africa said they had increased spending on cloud computing, according to a report by World Wide Worx and F5 Networks. Running your day-to-day business on the cloud requires you to have a more powerful Internet connection.
Support video and VoIP
Some businesses make use of video capabilities for training and meetings, and VoIP for sales and marketing. On a fibre line, businesses can ensure they meet these demands without putting a strain on the network. With fibre, business owners can run voice and Internet data on the same line but may look at installing a second data connection for redundancy.
Get what you pay for
There’s no denying it, fibre provides exceptional speeds and offers a brilliant price-to-performance ratio. You won’t receive the same contention ratio as other connection mediums – you will get what you pay for. Bandwidth caps are less of an issue with fibre because there’s a choice of affordable uncapped deals on offer.
Make the right choice
- Before you decide on your fibre deal, ask the right questions, understand exactly what you’re paying for and match your business requirements with the right amount of bandwidth.
- Choose a provider that allows you to manage growth for the long term – one that allows you to choose your deal, scale when necessary and not throttle your fibre line.
- You’ll also want an ISP to have your back further down the line. Insist on obtaining a comprehensive list of services along with the monthly fee. Ensure you are provided with a full service including all necessary support and equipment to deliver optimal fibre performance.
Ignite’s drive and purpose is to be the spark that inspires SMEs, which is why the Ignite Fibre service is structured to put you in control. Ignite offers you tailored packages that take into account your daily Internet and business startup needs.
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