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Start-up Advice

How Lize Fouche Started with Nothing but Blood, Sweat, and Fears

Lize Fouche is the founder of Number 1 Foods with product ranges Nutristart, Hemel&Hawer and Chunky Muesli available in Pick n Pays nationwide. But did you know this venture, launched a little over two years ago, was prompted by hard times, with a few thousand rand and a kitchen oven? Here are her start-up success lessons.

Tracy Lee Nicol

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Lize-Fouche

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.

Related: Turning a Perfect Formula on its Head: The Lean Start-Up 

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.

Related: This Mental Trick Can Help You Bust Through Obstacles on the Way to a Goal

The Right Time to ExpandNutristart-cereal

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.

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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.

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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.

Related: 10 Truths That Sustain Successful Entrepreneurs

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.

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+.

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Start-up Advice

Put On Your Wellies: It’s Time To Wade Into Risk

Entrepreneurs aren’t all leaping into the unknown like lemmings off a cliff, but they do need to consider it…

Chris Ogden

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You’ve had a great idea. You’ve looked into its development. You’ve recognised that it has potential beyond just what Auntie Mabel and Mike From The Grocer think. And you’ve clearly nailed a pain point that can make money. Now it is time to take the risk of running with it.

Every big idea comes with risk. You can’t step out into the world of entrepreneurial thinking and business development without it. Your idea may fail. It will also be time consuming, demanding, hungry for money, and hard work. It is unrealistic to expect that your project will leap out into the world and be an unmitigated success.

It is also unrealistic to assume that it isn’t worth taking this risk.

There are steps that you can follow to ensure that your risk is managed so you aren’t blindly leaping off that cliff…

Step 01: Do your research

No, canvassing your neighbours, friends and family is not doing research. You need to know that your idea will appeal to a broad market and that it will have significant legs. This may sound like daft advice, but you would be surprised how many people think an idea will take off just because Susan in Accounting said so.

Step 02: Understand the costs

Projects are hungry for money and investment. Realistically work out your budgets and how much it will cost to take your project off the ground and then stick to it.

A calculated risk is a far better bet than one that shoots from the hip and hopes for the best. You can also use this as an opportunity to draw a clear line under where you will stop investing and end the project. If it keeps eating money and isn’t getting anywhere with results you need to be able to walk away.

Step 03: Know when to walk away

As mentioned before, this can be defined by a line you’ve drawn in the proverbial sand (and budget) but no matter where you draw this line, you have to stick to it. Often, when time, money and energy have been poured into a project it can be incredibly hard to walk away.

You think ‘but I have put so much into this, just one more’ and then it gets to a point where the ‘just one more’ has taken you so far down the line that walking away feels impossible. Leave. Learn the lessons. Apply them to your next project.

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Start-up Advice

Mind The Gap

The entrepreneur’s guide to finding the gaps and building the right solutions.

Chris Ogden

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Innovation may very well be the key to business success but finding the gap into which your innovative thinking can fit is often a lot harder than people realise. Some may be struck by inspiration in the shower, others by that moment of blinding insight in a meeting, however, for most people finding that big idea isn’t that simple. They want to be an entrepreneur and start their own high-growth business, but they need some ideas on how to find that big idea.

Here are five…

1. Network

It sounds trite but networking is actually an excellent way of picking up on patterns and trends in conversation and business problems. The trick is to note them down and pay attention. Soon, you will find patterns emerging and ideas forming.

2. Look for pain

Just as networking can reveal trends in the market, so can spending time reading. The latter will also help you find common business pain points. These are the touchpoints that frustrate people, annoy business owners, affect productivity, or impact employee engagement.

Be the Panado that fixes these pains.

3. Luck

luck

This is probably the most annoying of the ideas, but it is unfortunately (or fortunately) very true. Luck does play a role in helping you capture that big idea. However, luck isn’t just standing around and random people offering you opportunities. Luck is found at networking events, it is found in research and it is found in conversations with other entrepreneurs.

4. Luck needs courage

You may have found the big idea through your network, a pain point or pure blind luck, but if you don’t have the courage to take it and run with it, you will lose it to someone else.

Being bold in business is highly underrated because most people assume that everyone is bold and prepared to take big leaps into the unknown. However, not all brilliant entrepreneurs were ready to throw their family funds to the wind and leap into an idea – they were courageous enough to figure out a way of harnessing their ideas realistically.

5. Pay attention

This is probably one of the most vital ways of finding a gap in the market. Often, people are so busy that they don’t really pay attention to that niggling issue that always bothers them on a commute, or in a mall, or at a meeting. This niggling issue could very well be the next big business opportunity. Pay attention to it and find out if that issue can be solved with your innovative thinking.

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Start-up Advice

5 Things To Know About Your “Toddler” Business

As you navigate this new toddler phase of your business, here are five things to bear in mind.

Catherine Black

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Ah, toddlers. Those irresistible bundles of joy bring a huge amount of energy, curiosity and fun to any family – but there’s also frustration and worry that comes with their unpredictability, as they grow and start to become more independent. If you own a business and it’s successfully past its “infancy” of the first year or so, it’s likely it will also go through a toddler stage of its lifecycle.

Pete Hammond, founder of luxury safari company SafariScapes, agrees with this. “Our business is now three and a half years old, and we’ve found that we’re not yet big enough to justify employing a large team of people to handle the day-to-day admin tasks, yet we still need to grow the business as well,” he says. “As a result, our main challenge is finding the time to step back and see the bigger picture. Kind of like when you are raising a busy toddler and you spend most of your time running after them!”

As you navigate this new toddler phase of your business, here are five things to bear in mind:

1. This too shall pass

Everything in life is temporary – and that goes for both the good and the bad. It’s as helpful to remember this when you’re facing the might of a toddler temper tantrum, as it is when you’re facing throws of uncertainty in your business. If your new(ish) venture is going through a rough patch in its first few years, it can be easy to think about giving up – but don’t. As long as you have an overall big idea that you believe can add value to your customers, keep pushing through the rough parts until you come out the other side.

2. Appreciate what this phase brings

The toddler years mean that the initial newborn joy is officially behind you. But these small humans also bring their own kinds of joy, as you watch them learn new skills, say funny things, and give affection back to you. While your two-year-old business may not hold the same exhilaration for you as it did during those first few months, there are now different things to appreciate about it: Maybe you’re expanding your product range, or employing new people who can take the workload off you.

3. Establish boundaries

Toddlers thrive on boundary and routine – and your toddler business will too. As it grows into a new phase, try and establish limits in terms of the type of clients you want to work with and the type of work you’ll do. It’s also a good idea to make a decision about the hours you’ll work and when you’ll switch off, which will help you establish a good work-life balance.

4. Take a break

Every parent with a toddler needs a break every now and then, even if that means a walk around the block (on your own!), a dinner out with friends, or even a few days away. The same is true for a demanding small business: every so often, remember to take time out to rest properly, where you switch off your laptop and completely unplug. You’ll return much more inspired and resilient to deal with the everyday uncertainty that it brings.

5. Give it space to make mistakes

While the unpredictability of a young business can be stressful and tiring, it’s also a time for trying new things without the risk of huge consequences if they don’t quite work. After all, it’s much simpler to change your USP if you’re a small business employing a few people, rather than a big company where 50 people are relying on you for their salary, or where you’ve received a huge amount of investment capital. While you may fail in some of the things you try with your business (in fact, this is almost guaranteed), see it as a toddler that’s resilient enough to pick itself up, dust its knees and keep moving forward.

During this phase of business growth it’s also essential to have the right type of medical aid cover. There are medical schemes such as Fedhealth which has a number of medical aid options and value-added benefits to ensure that your health and wellness is taken care of too. After all, the healthier you and your staff are, the more productive your business will be – during the toddler (business) stage and beyond.

While this phase can be frustrating, it’s a sign that your business is growing and adapting, rather than remaining in its infancy, and that can only be a good thing! So embrace the difficulties, learn from them, and watch as your business strides forward confidently into the next exciting phase.

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