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.
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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.
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.
Entrepreneurship: How To Develop Your ‘Great Idea’
There is one or more critical elements that a significant proportion of start-up entrepreneurs overlook when evaluating their own idea/s.
Empty pockets never held anyone back. Only empty heads and empty hearts can do that. – Norman Vincent Peale
Volumes of start-up entrepreneurs claim to have wonderful ideas that will serve as a catalyst to attaining riches. Often once internally convinced of their own great idea they march into the offices of bank managers, venture capitalists, or angel investors and ‘blurt out’ their earth-shaking idea with a staggering amount of confidence only to regularly hear loud and repetitive echoes of that unpalatable word ‘NO’ .
Totally devastated and mesmerised by the behaviour of investors, self-pity often sets in and the prospective investors are blamed for their lack of vision and understanding. Holding oneself accountable and doing honest self-reflection often only comes with a great deal of experience and wisdom therefore inexperienced entrepreneurs often falter at the first serious hurdle that they face and go back to a day job blaming others for their failure.
There is one or more critical elements that a significant proportion of start-up entrepreneurs overlook when evaluating their own idea/s:
Within the grand scheme of things it really does not matter if you think you have a great idea that will transform into a ‘money maker’ in reality it only matters if the market believes your idea is great and am willing to pay for it. An untested idea can never be great an idea has to be actualised and proven to be great or not.
Wise investors are more interested in investing in you as opposed to investing in ‘your great idea’ because the idea will only have traction and sustainability if the person that conceived it is willing to overcome any and every obstacle in his/or her way and move towards success with urgency and a sense of unwavering commitment.
Related: 20 Quick Money-Making Business Ideas
Carefully considering the above it is a smart move to create a ‘minimum viable product’ , to test your product in the marketplace and to adjust according to the findings of your research until you have moulded your ‘great idea’ into and actualised ‘great product’.
Do not attempt to entice investors armed with only a ‘great idea’ instead announce a market tested product with a proven demand when you pitch. Speak to industry experts, hear what entrepreneurial peers have to say about your products or services, create focus groups and have a number of consumers test your product. Carefully listen to the cues prompting improvements within their feedback and adjust where and if appropriate.
Engaging consumers, peers, friends and family with a minimum viable product is taking great strides towards not only refining and improving your product or service but also at the same time assists in formulating your sales and marketing strategy.
The attempt to take an untested product or service to a marketplace where the ‘lukewarm’ are often gulped up can cause a great deal of pain to the start-up entrepreneur and can be a very costly exercise. It can be both emotionally and financially draining to such an extent that the entrepreneur gives up on his or her dream relatively quickly.
To what degree you factor in the testing of your product considering both your start-up budget and project timeline can have a great amount of positive impact on your success.
As a business coach I have never underestimated the value of having a wise mentor whom can give sound advice and support especially during the start-up phase of your venture. Consult with your mentor on how to thoroughly test your product or service and structure the testing phase of your project in such a way that it saves you money and a lot of pain in the future.
How To Turn Your Side Hustle Into A Full-Time Gig
It will be scary, but also incredibly rewarding.
Few people are lucky enough love their 9-to-5s, and more and more people are finding themselves doing something else on the side, either to add to their income or to feed their passion. Sometimes, those “side hustles” start to feel more and more like “the real thing,” and suddenly these people are dreaming about running a business of their own. Sound familiar? If you’re one of the thousands of people dreaming about turning your side hustle into a true business, you’re not alone.
Moving away from a steady, full-time position to being on your own is the scariest, yet most invigorating feeling in the world. I’ve found most people consider entrepreneurship either unattainable or, honesty, highly romanticised. The reality is that neither is correct. Being an entrepreneur is a ton of work, but it’s also completely possible.
1. Be clear and honest with yourself about when it’s time to make the jump
Giving up the benefits and security that come with a full-time job is scary, and sometimes unrealistic, but it’s also dangerous to keep waiting until the time “feels right.” Ask yourself exactly what you need to have before you can make your side gig your new reality. A good rule of thumb is to have enough savings to live for about six months without income, and/or with the income you already have from your side clients.You should also have a clear idea of who your potential clients might be and how to connect with them.
After taking care of the logistical considerations, try to avoid dragging your feet. According to the British Psychological Society, you’re 91 percent more likely to accomplish something if you give yourself a deadline. So do it! Hold yourself accountable. Maybe you’re not willing to stay at your current job beyond a certain date, or maybe there will be other indicators that will make you certain that it’s time to go.
If your current role isn’t fulfilling and the passion is gone, it may be the perfect catalyst for making the jump.
Both of my businesses came to fruition because of my own realisation that I wasn’t flourishing in my current roles. I wasn’t the best, I wasn’t seeing the success I wanted and instead of feeling defeated, I changed directions. For me, the clearest signal that it was time to leave was that I didn’t believe in the goals I was supposed to be working toward.
2. Before you quit, put the processes in place to help your side gig scale
Early on, business organization and strategizing is a huge component of success. You’ll need to limit stress and create as much efficiency and ease as possible in your daily systems. This could mean scheduling things carefully, or using free software to make your work more effective. I try to divide the week into days assigned to different businesses tasks. Try as best you can to not switch back and forth between your different focus areas within the same day. Going back and forth between tasks that are not related is inefficient and breaks focus. Give your brain a break and keep yourself on one straight road each day.
Digitising your work can help, too. According to Accenture, companies that use cloud collaboration tools with their teams improve productivity, have greater clarity about what’s going on in their business and save money. When you first start out, it can feel silly to keep documents in a shareable cloud space (like Google Drive, DropBox or whatever option you like best), but you need to have the structures in place so that you’re organised and ready for the time if/when you hire a team to support you. This is a good thing to play around with before you quit your main gig. Having the tools and processes you know work well for you ready to go when you make the switch can make ramp up time easier.
It’s long hours, it’s always being “on,” its wearing too many hats, but it’s also incredibly rewarding. So, how do you successfully turn your side project or passion into a prosperous business? What are the steps? We all want the “1, 2, 3 and voila, here it is, a company of our own,” but realistically, how can we make it happen? I can only speak to my own experience, failures or what I like to call “directional pivots” and successes. There have been a few true catalysts that have helped me turn my two side gigs into full-time gigs.
3. Work hard, and be humble
Your time is valuable, but as new entrepreneur you can’t treat it like currency. What I mean is, be prepared to put in lots of hours with minimal return. Initially, time may not correlate with financial success; this is an incredibly important mindset to remember. Your time isn’t money, yet. It’s groundwork. Building a side gig up from the ground requires wearing a lot of different hats. If you want your business to succeed, you have to be ready to play customer service rep, salesperson, individual contributor and HR.
If you’re feeling overwhelmed, break the work down further. Spend more time working on the day to day tasks, checking things off the to-do list. These are all working toward your big vision, but in small doable pieces rather than hefty overwhelming ones. Try not to consider any task “beneath you” and take some time to truly understand what goes into each part of your business.
You won’t have a boss telling you what’s right or wrong, so you’ll need to build a sense of self-accountability – one of the toughest parts of being an entrepreneur. Take notes about the challenges you face in each aspect of your business so that you’ll know what anyone you might hire will have to cope with. It’s your best chance to uncover important considerations and think about what resources might need to go where, down the line.
4. Surround yourself with smart people – even if you never plan to work with them
As much as entrepreneurship can be a solitary job, especially in the beginning, it’s vital to your success to remember how others can help you thrive. Invest your time in like-minded people. Take time to get to know others and their stories and create valuable relationships. So much of success is built from opportunities or inspiration from people we know.
Find people you connect with to talk about your ideas, write about your ideas online and build a community that empowers you. Take advantage of those around you who want to see you succeed. You’ll be surprised at how much people want to help!
The number of new startups and small businesses has dropped dramatically in recent years, nearing a 40-year low in 2016. The landscape has gotten tougher, which makes being an entrepreneur scarier. Turning a side hustle into the real thing is not easy, and I’d be lying if I said I loved every minute of it. But, just as with most other big decisions in life, there are always lessons to be learned no matter what happens. Be thoughtful, take smart risks and see where your “side hustle” can go.
This article was originally posted here on Entrepreneur.com.
How To Keep Big Ideas From Being Big Failures
Simple, Yet Effective Business Advice from Clients on Demand Founder, Russ Ruffino.
As an entrepreneur, it’s not uncommon to have big ideas. Ideas that, if worked properly, can take your business to higher levels.
Maybe you’ve came up with a way to enhance your products or services that would advance your company lightyears ahead of your competitors. Or perhaps you’ve thought up a new gadget or tool that, once developed and released, could potentially change the world as it exists today.
The problem with having these big ideas is that sometimes they fail. And they can fail hard.
Big Ideas Can Equal Big Failures
Take Coca-Cola, for instance. On April 23, 1985, this well-known company announced that it was changing its formula and releasing the “new Coke.” While its goal was to update a soft drink that had been 99 years in the making, it actually had the opposite effect. Consumers were mad. Real mad.
People had grown to know and love the taste of Coke, so the thought of it changing didn’t sit right with their taste buds. Many protested the company’s actions, creating such a stir that, in addition to being picked up by news sources everywhere on that day, it is still being talked about today.
Ultimately, Coke recovered and is still loved by many. However, it easily could have went the other way, potentially causing a revolt big enough to force them to close their doors.
So, what can you do to take your big ideas and turn them into wins versus risking them becoming huge failures capable of sinking your business? According to one entrepreneur, you simply do a numbers test.
The Numbers Test
In a People Stack Podcast, Russ Ruffino shares that his company, Clients on Demand, is on track to earn $20 million this year. This number is up from $4.5 million in 2016, just two short years ago, and Ruffino says that one thing has helped him reach this level of success is that he and his team use data to help them decide what to do. “We always run the numbers,” says Ruffino.
For instance, if your big idea is to recreate one of your current products, how much will it cost your company to make and test a prototype? What about manufacturing costs on a larger scale?
Think also about expenses related to marketing the updated product line and costs associated with creating enough buzz to get it to really sell. Put them all together and see what the numbers are telling you.
Sometimes New Isn’t Better
You may just find that newer isn’t always better. In fact, Ruffino says this is typically the case as, usually what he finds at Clients on Demand is they can typically “get to our income goals faster by just getting a little bit better at what we’re already doing.”
Benjamin P. Hardy, a former top writer for Medium.com in the self-improvement and entrepreneurship space, agrees and adds, “It doesn’t matter how good your strategy is, if you’re not skilled at what you do, that strategy won’t take you very far.”
That’s why Hardy recommends that you put yourself in challenging situations. “This is how you evolve,” he says. And be sure to follow your own path and keep your why’s in front of you along the way to remind you of what is driving you forward. Let these motivate you when times get tough.
It’s only natural to come up with big ideas in business. That’s what being an entrepreneur is about. Just make sure you follow your numbers and those big ideas can potentially become big successes.
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