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Start-up Advice

10 SA Entrepreneurs On What They Wish They’d Known Before Starting Their Businesses

Avoid making the same start-up mistakes and mishaps that these successful entrepreneurs did when they started out.





Great idea, wrong spot


Borjan and Lidija Ivanonic

Vital stats:

  • Borjan and Lidija Ivanonic are the founders of Balkan Burger.
  • What started as an experiment at a farmer’s market has grown into a full-time, highly profitable and successful business.

“We bought a 1967 short-body school bus that we converted into a mobile food truck. We took it to Arts on Main in Maboneng and parked it at the entrance of the market, but that didn’t work out for us. It was a great marketing tool – people would stop and chat and want to learn more, but they’d always say they’d come back after looking around and then forget about us.”

Borjan Ivanovic is very candid about the wins and losses of growing Balkan Burger. Effectively pioneers of mobile food trucks in Joburg with no one to guide them, they spent a lot of money buying and outfitting a very cool mobile food truck that was not yet needed.

A combination of being a purchase made too soon and positioning it in a bad spot for food sales, it was a costly trip-up that only started paying itself off once they joined other markets and started landing catering jobs.

Wanting to start a business? You should read these books first

Give people what they want, not what you want


Andrew Leeuw and Herzon Louw

Vital Stats:

  • Andrew Leeuw and Herzon Louw are the founders of Sumting Fresh.
  • Starting out as a food trailer in the streets of Midrand and making negative profits at first, they’ve since grown by 9 000% and have a staff contingent of 18.

“I’m a qualified chef and opening my own restaurant was just far too expensive to consider. I figured I could bring people restaurant-quality food from a food truck but learnt hard and fast that that’s not what people wanted. They wanted street food.”

Andrew Leeuw and Herzon Louw learnt a costly lesson in their early days as street food vendors. They were serving expensive food, expensively, because that’s what Leeuw thought people wanted. The minute they pivoted and focused on selling quality street food at value-for-money prices, sales rocketed. They went from 80 portions and – R480 a day, to 120, 240 and beyond.

“We really had to take a hard look at ourselves, develop our own identity and style, and then bring it to the people. Be flexible, take criticism constructively, and don’t wait for the customers to decide who you should be.”

Read more: 4 Ways Entrepreneurs Can Become Truly Great

Estimate how long you think something will take, then double it


Yossi Hasson

Vital Stats:

  • Yossi Hasson is the co-founder of Synaq.
  • Established in 2004 the firm underwent major changes that allowed the business to scale much more efficiently.
  • In 2011 Dimension Data bought a 50,1% share in the business, allowing them to scale at even greater speed.

“When we made the decision to convert from a product-based business to a service-based business, we lost R1,8 million, we owed SARS half a million rand, and grossly underestimated the complexity of the change and planning for it. What we thought would take six months actually took two years.”

It was an incredibly tough time for Yossi Hasson and his business partner David Jacobson, but they maintain it was the best move they ever made.

“We recovered through management pay cuts, we froze salaries, cancelled outsourced providers, managed expenses like crazy, managed to get clients to pay upfront for a small discount, and convinced shareholders to give a little bit more money.” The major lesson they learnt about change?

“Now we always get advice and manage expectations before we start, so we have a more realistic timeline of how long something will take.”

Read more: Yossi Hasson’s full story here

Look before you leap


Chris Ndongeni

Vital Stats:

“We should have done more research about the contract cleaning business and industry before we started. We’d landed our first contract with Man Truck and Bus, and on our first day we were shocked to find that there was absolutely no cleaning equipment or detergents and the previous contractor hadn’t left anything behind. We scrambled and made expensive purchases because of that.”

Business plans belong to the last century. Gone are the days of creating 40-page, detailed documents about your business, it’s target market, competitors, finances and so on.

Today it’s about the lean canvas: Starting with a hypothesis, testing it, and quickly iterating depending on the results of your test. Even though this method requires less research, research is still very necessary.

Ensure you know what permits, certificates, and approvals are required to operate in your industry, how competitors are operating, and then figure out what you can do differently.

Read more: Twin Cities Cleaning Services on Avoiding Those Costly Mistakes

Do what you know


Ross Wilson

Vital stats:

  • Ross Wilson is the founder of urbantonic, a Cape Town-based eventing agency.

In 2007, Ross Wilson made a business decision that would take him almost five years to recover from. Despite his background in eventing, he bought a joinery business.

“Urbantonic was a successful, growing business, but I’d been building it for almost a decade and I thought it was time to branch out. My ego was sky-high. I thought I could do anything, in any industry.”

This would turn out to be a very expensive assumption. 20 months after buying the joinery business, Wilson managed to close it down. It would take a further three and a half years to pay off the debts associated with the business.

“I kept thinking about that Top Gun quote, ‘Son, your ego’s writing cheques your body can’t cash. We built up urbantonic slowly. We offer incredible customer service because we’ve never over-extended ourselves, so our growth has been organic and self-funded. We’ve never spent what we don’t have. And most of all, we know this industry inside out. The joinery business was none of those things.”

Read more: Ross Wilson’s full story here

Hire for cultural fit, not skills


Irfan Pardesi and Hina Kassam

Vital stats:

  • Irfan Pardesi and Hina Kassam are the founders of ACM Gold, a R350 million + gold and foreign exchange trading company.

Of course skills are important, but many entrepreneurs have learnt to their detriment that a person with the right skills who is a complete cultural mis-match with the company will bring everybody down, and even put your business at risk.

Irfan Pardesi and Hina Kassam, founders of ACM Gold, learnt this the hard way. As their start-up grew, they started building up a team. The problem came when they made the decision to bring in an experienced management team. They focused on the credibility that they thought big names would bring to the business, instead of whether those same names suited the company’s culture.

“The whole culture of our company started shifting – it was no longer what we had worked so hard to build. It took us months to rectify, and cost us a lot as well. Today we know, always hire for cultural fit. Attitude is everything. Skills can be taught, experience gained, but you’ll never change a person’s values and personality.”

Read more: The Midas Touch: Hina Kassam & Irfan Pardesi

Know your numbers

Kerryne Krause-Neufeld

Kerryne Krause-Neufeldt

Vital stats:

When Kerryne Krause-Neufeldt launched her business, she was so focused on customers and making sales, that she neglected the inner-workings of her own company.

“I particularly wasn’t good with numbers,” she says. This was Krause-Neufeldt’s biggest lesson.

“It’s easy to abscond the numbers to the ‘finance guys’, especially if you don’t have a background in finance. I didn’t even know we weren’t paying PAYE, and ignorance is no excuse. You need a basic understanding of numbers at the very least.”

Once she realised the shambles her start-up’s finances were in, Krause-Neufeldt realised the buck needed to stop with her.

“I did accounting for dummies, followed by financial management workshops. It was time consuming, but worth it. It was the only way for me to truly be in control of my own business. Now I can spot problems in the figures at a glance.”

Read more: Kerryne Krause-Neufeldt’s full story here

Everything will always take twice as long as you think it will


Vusi Thembekwayo

Vital stats:

  • Vusi Thembekwayo is the founder of Motiv8.
  • He is a Dragon on South Africa’s Dragon’s Den, and the youngest JSE director in SA.

Vusi Thembekwayo is not the first entrepreneur who learnt this lesson, nor will he be the last.

“By the time I launched my motivational speaking and strategic consulting business I had top tier experience at a local FMCG giant. I knew business. I had seed money from ring-fencing and selling the division I’d built up and ran.”

Thembekwayo certainly wasn’t green behind the ears, and yet his start-up journey ended up being very different to how he imagined it to be.

“I used that money to get set up in fancy offices with a PA. I thought that was what you needed. And then it took eight months to get my first client.”

Eight months of zero income, and expensive overheads. Thembekwayo was sleeping in his car, fending off the bank who wanted to repossess it because he wasn’t meeting the payments.

Today that business has a turnover of R140 million, but Thembekwayo will never forget his first real start-up lesson: However long you think it’s going to take to get going, triple it. And you still won’t be there.

Read more: 10 Tips From The Dragons Of Dragons’ Den SA

Not everything is an opportunity, some are a waste of time

Mongezi Mtati

Mongezi Mtati

Vital stats:

  • Mongezi Mtati is Founder and MD of WordStart, a word of mouth marketing firm that connects brands with influencers.

“Your time is yours to pour into the business, not to use on non-paying efforts that present themselves as opportunities,” said a mentor who was discouraging Mongezi Mtati from taking on more work for exposure. “The advice fell by the wayside,” admits Mtati. “Unfortunately, he was right.”

Mtati knows the situation well: When you’re starting out, people offer you the opportunity of ‘exposure’ in lieu of billable work and hours. Start-ups that are desperate to build up their portfolios often agree.

“The reality is that most of that exposure does not amount to billable work. It ends up being a waste of time that could have been used to either make money or spent in the business waiting for the phone to ring or drumming up sales. It could even have meant going to SARS for an hour or two, which saves you pain and punishment later in the year.

“The rule is simple: Don’t work for free,” he says. You’re there to make money, so do it.

Read more: Mongezi Mtati on How Wordstart Proved the Power of Word-of-Mouth Marketing

Never treat the business’s cash like your own


Lebo Gunguluza

Vital stats:

  • Lebo Gunguluza is the founder of the GEM Group and a Dragon on South Africa’s Dragon’s Den.

Like many young entrepreneurs, Lebo Gunguluza treated the money his start-up made as his own. After a few weeks, he realised that he needed to start saving the cash he was making in a bank account if he wanted to hire some help. It wasn’t a lesson that translated into good cash flow principles. The more the young entrepreneur made, the more he spent.

On the one hand, he was a bootstrapper, and he made his first million at the age of 27 without funding, tenders or loans. This just meant that he at least didn’t owe anyone money when he went bankrupt a year later.

“I spent my first million in one year,” he says. “Instead of using the money I was making as seed capital, I bought a GTI and partied like there was no tomorrow. It didn’t take long before I was flat broke.”

He learnt from that lesson, built himself up, and never squandered cash again, and to this day he warns other young entrepreneurs: Never treat the business’s cash like your own.

Read more: Lebo Gunguluza’s full story here

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Start-up Advice

Alan Knott-Craig Answers Your Questions On Money And Partners

From starting the right business, to managing business partners and finding your magic number, there is a secret to happiness.

Alan Knott-Craig




If I get rich will I be happy? — JC Lately

Does money equal happiness? Mostly, yes. Research in the US shows that your happiness is proportionate to your earnings up until you earn $80 000 per annum. Thereafter, incremental income gains have a negligible effect on your happiness.

In other words: More money will make you happy as long as you’re poor. Once you break out of poverty and enter a comfortable middle-class existence, more money will not make you happier.

These are the top three for old folks:

  • I wish I’d spent more time with family.
  • I wish I’d taken more risks.
  • I wish I’d travelled more.

Therein lies the secret to happiness. Spend time with your family. Take risks. Travel.

But first, make money. Don’t do any of the above until you’re making enough money not be stressed about money.

Related: Your Questions Answered With Alan Knott-Craig

What is the magic number? — Mushti

The magic number is the amount of money you need to not worry about money ever again. If you don’t need toys like Ferraris, yachts and jets, the magic number is R130 million. Here’s the math: R130 million will earn R9,1 million in interest annually (assuming 7% interest). After tax that is R5,46 million.

Assuming you need 50% to maintain a good lifestyle, that leaves approximately R2,7 million for reinvestment, which is enough to keep your capital amount in touch with inflation for 50 years. The balance of R2,7 million (after tax) is for your living costs. In South Africa, R2,7 million will afford you a lifestyle that allows you to send your kids to a great school and university, to travel overseas a couple of times a year, and to live in a comfortable house.

Over time your living costs (and inflation) will eat into your capital amount. After 50 years you should be down to nil, assuming you earn zero other income in that time.

In 50 years, you will probably be dead. If you’re not dead, your kids will be able to support you (because they love you and they have a great university education).

I am the sole director of a company (the others still have full-time jobs and don’t want to be conflicted) and there is pro-rata shareholding based on our initial shareholder loans. However, I am putting in most of the hard work, together with one of the other actuaries. How best do I manage the director/shareholder dynamic? I obviously want to make as much progress as possible but there are times when I need the input from the others (and their responses aren’t always as quick as I would like). — Mike

If you have any perception of unfairness regarding effort/risk vs reward, deal with it NOW! You can’t do so later. The best approach is honesty. Call your partners together. Explain your thinking. Perhaps argue for 25% ‘sweat equity’ for yourself. Everyone dilutes accordingly. Ideally cut a deal whereby you have an option to pay back all their loans, plus interest, within six months, and you get 100% of equity (unless they quit their jobs and join full-time).

Equity dissent must be resolved long before the business makes money, otherwise it will never be resolved.

Related: Alan Knott-Craig’s Answers On Selling Internationally And Researching Your Idea

What do you think of WiFi in taxis?— Ntembeko

It’s a good idea, but not original. Before embarking on a start-up, you should survey the landscape for competitors. Just because there are none doesn’t mean no one has tried your idea.

It just means that everyone that tried has failed. You need to be 100% sure that you have some ‘edge’ that makes you different from everyone who came before you (and failed). Otherwise you will fail. What is your advantage that is different to everyone who came before?

Read ‘Be A Hero’ today


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Start-up Advice

What You Need To Know About The Lean Start-up Model

The Lean Start-up philosophy was developed by Eric Ries, a Silicon Valley-based entrepreneur who also sat on venture capital advisory boards. He published The Lean Startup in 2011, igniting a movement around a new way of doing business.





The model follows key precepts that include:

Taking untested products to market

The fact that too many start-ups begin with an idea for a product that they think people want, spending months (or even years) perfecting that product without ever testing it in the market with prospective customers.

When they fail to reach broad uptake from customers, it’s often because they never spoke to prospective customers and determined whether or not the product was interesting. The earlier you can determine customer feedback, the quicker you can adjust your model to suit market needs.

The ‘build-measure-learn’ feedback loop is a core component of lean start-up methodology

The first step is figuring out the problem that needs to be solved and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible. Once the MVP is established, a start-up can work on tuning the engine. This will involve measurement and learning and must include actionable metrics that can demonstrate cause and effect.

Utilising an investigative development method called the ‘Five Whys’

This involves asking simple questions to study and solve problems across the business journey. When this process of measuring and learning is done correctly, it will be clear that a company is either moving the drivers of the business model or not. If not, it is a sign that it is time to pivot or make a structural course correction to test a new fundamental hypothesis about the product, strategy and engine of growth.

Lean isn’t only about spending less money

It’s also not only about failing fast and as cheaply as possible. It’s about putting a process in place, and following a methodology around product development that allows the business to course correct.

Progress in manufacturing is measured by the production of high quality goods

The unit of progress for lean start-ups is validated learning. This is a rigorous method for demonstrating progress when an entrepreneur is embedded in the soil of extreme uncertainty. Once entrepreneurs embrace validated learning, the development process can shrink substantially. When you focus on figuring the right thing to build — the thing customers want and will pay for, rather than an idea you think is good — you need not spend months waiting for a product beta launch to change the company’s direction. Instead, entrepreneurs can adapt their plans incrementally, inch by inch, minute by minute.


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Start-up Advice

Start-Up Law:  I’m A Start-up Founder. Can I Pay Employees With Shares?

Bulking up employee salaries with equity is a common method to attract, retain and incentivise top talent.




Every early stage start-up company battles with restricted cash flow and not being able to pay market related salaries to their employees. Bulking up employee salaries with equity is a common method to attract, retain and incentivise top talent.

Can I pay salaries with shares?

South African labour laws require that employees be paid certain minimum wages, and “remuneration”, as defined within the Basic Conditions of Employment Amendment Act, either means in ‘money or in kind’.  ’In kind’ does not include shares or participation in share incentive schemes, as determined by the Minister of Labour. As such, there is no room for start-ups to completely substitute paying salaries with shares or share options. However, there is no restriction in topping up below market related salaries with equity via an employee share ownership plan (‘ESOP‘).

Related: 7 Ingredients Of Small Business Success Online

Employee Share Ownership Plans

There are a variety of ways in which employees can be incentivised, and it will always be important for the start-up founders to consider what goal they wish to achieve by incentivising their employees.

ESOPs can be structured in several ways, for example: employees may be offered direct shareholding in the company, options for the acquisition of shares in the future; or alternatively, a phantom / notional share scheme can be set up.

ESOPs permit employees to share in the company’s success without requiring a start-up business to spend precious cash. In fact, ESOPs can contribute capital to a company where employees need to pay an exercise price for their share options or shares.

The primary disadvantage of ESOPs is the possible dilution of the Founder’s equity. For employees, the main disadvantage of an ESOP compared to cash bonuses or bigger salaries, is the lack of liquidity. If the company does not grow bigger and its shares does not become more valuable, the shares may ultimately prove to be worthless.

Related: 7 Strategies For Development As An Entrepreneur

Key Features

Some key features to consider when setting up an ESOP are:

  • ELIGIBILITY – who will be allowed to participate? Full time employees? Part-time employees? Advisors?
  • POOL SIZE – what percentage of shares will be allocated to incentivise employees?
  • RESTRICTIONS – will employees be able to sell their shares immediately?
  • VESTING – will there be a minimum period that service employees will have to serve with the start-up to receive the economic benefit of his or her shares?

Employee share ownership plans are great corporate structuring mechanisms for attracting and retaining employees, as well as fostering an understanding of the company ethos and encouraging loyalty and productivity. It is essential when implementing an ESOP that all the tax implications are considered and that the correct structure and legal documentation are in place.

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