It’s hard to believe that Howard Blake started his business with just a typewriter and a home office. It’s even harder to picture him visiting his first clients on a banged up scooter. But that is how determined the founder of what is today a leader in the international business process outsourcing sector was.
Ask Blake (49) what made him launch his own business and he’ll tell you it was desperation. In reality, he is a born entrepreneur who would find it difficult to work for anyone. An attorney by profession, he started out in estate administration, and then became a legal advisor before joining a firm of staid attorneys in KwaZulu Natal. Not happy there, he left.
With a wife, two kids and his back against the wall, he launched Blake and Associates in 1990 when he was just 27, working from his kitchen. Today, the business is known simply as Blake and has established itself as a highly respected leader in business process outsourcing and contact centre services, focusing on all aspects of customer lifecycle management and not just debt collection. It has an annual turnover of R350 million with offices in Namibia, Botswana, Mauritius and the US. Blake also employs more than 3 000 people and has had a massive impact on the development of the community of Phoenix, which is close to the company’s head office in Mount Edgecombe, Durban.
Overcoming early challenges
Accountability is something Blake mentions often. He is known for taking full responsibility for what happens in the business – the good and the bad – without looking at the team that implemented the decision. He’s always accepted that ultimately the responsibility remains with him, and this is still one of his keys to success.
Blake faced and prevailed over a number of challenges common to start-ups. In the first two years of the business, he was lucky enough to have a sympathetic banker. His father had died when he was a child, and family resources were few. Money was always an issue in the beginning. He had no collateral to start the business and laughs when you ask where he got finance. But he also required very little money to get it going.
“Where I was fortunate, is that the mainstream technology available to everyone today had not evolved yet. I did everything manually, providing an excellent manual service that we slowly morphed over time into a fully automated one, which made it more possible than in today’s environment where so much outlay is required for infrastructure. I started out with just me and an assistant. Today, you would have to have a lot of money to start this kind of business. Technology has raised the barriers to entry from that point of view.”
Another issue he had to tackle early on was that people were reluctant to work for the business. Blake recalls that is was difficult to convince those early staff members that he would indeed be able to pay their salaries. He says it took a lot out of him to find people who were ready to join and take the risk alongside him.
“But the secret to success is simple,” he says. “You just have to persevere. The minute you stop, it’s over. You have to try to project yourself into what your endgame is. I always made sure we paid our staff on time, even if it meant we owed the bank a little more each month. I held onto my vision and honed the service aspect of the business. That’s what set us apart. It’s like Starbucks – without the customer service focus it would be just another coffee shop.”
The idea came about after Blake identified the need for a debt collection service without high legal costs. His clients were doctors and service stations. Soon the list grew to include vehicle dealerships and furniture retailers. Then the explosion of store credit cards between 1993 and 1996 boosted the business. Retailers across the spectrum turned to the firm for debt market advice to minimise risk.
Blake might be highly successful today, but he did not have an easy time of it at the beginning. By July 1991 he was worn out by trying to sell his services to bigger clients and ready to lock the door and throw the key away. But then he landed a contract large enough to enable him to service the business’s debt.
“As it so often happens in business, just as I was about to give up, we closed a fantastic deal. I had been pursuing a retail company for months, and my tenacity eventually paid off. I demonstrated to them that we had the capability to improve their debt collection and minimise risk, based on the work we had already done. I proved that we could manage their debt on a more scientific basis and help them to create better default prediction models. Within a few months I was employing 16 people.” The business doubled every year from 1993 to 1997.
“We help companies leverage their markets and enhance their customers’ brand experience,” says Blake, who is now the firm’s chairman. Among his oldest clients are Foschini and Truworths.
“I was oblivious to the competition at the time,” he says. “I developed our system based purely on good service. One of the most unique aspects of the business was that I allowed retailers to use our letterheads and infrastructure so that they did not have to hand over their book. From that, as the business grew, we developed service offerings that drilled further down into their business, so today we look at the entire customer lifecycle, taking into account the opportunities to cross-sell and up-sell, and always enhancing the customer’s experience of the company and the brand.”
Blake notes that the South African market is still immature when it comes to business process outsourcing. Where his American counterparts would have a much wider mandate, South African business leaders tend to want to hold onto the family silver. But attitudes are shifting slowly but surely.
“As a continent, Africa has the opportunity to leapfrog when it comes to communication technology.
There’s no need for the laying of terrestrial networks; everything can work wirelessly. That’s the beauty of the Web – you can go from nothing to smart technology that enables you to trade globally. It’s great for the development of young people, who are able to see that the world is much bigger than the town they come from.”
Expanding into overseas markets
In 2002, Blake saw the need to either lock the business into a boutique offering and look after the needs of South African clients only, or to look for opportunities to leverage the organisation’s vast capacity and infrastructure.
“Some of our processes had been pioneered by the company and were not yet tried and tested. We overcame that by providing a range of services for the mobile industry in the UK. Because we did not have the expertise internally to interact with that market, we brought in an expatriate team. We formed a joint venture with a British company looking for capacity in South Africa. Initially, they were fairly sceptical about our abilities. We provided the capital and the infrastructure, and they provided the management and day-to-day expertise required to run the business. That relationship continued for six years.”
During that time, Blake began to explore the American market. In 2006, the company set up a call centre team in Mauritius to look after American customers. The focus was on customer service as all calls were inbound. From that experience, the company looks after a fair chunk of business in France using the Mauritian team.
“Initially it was extremely difficult to move into overseas markets,” he says. “We were coming in off the back of a mature industry. But again, perseverance paid off.
To enter the global market, you have to be patient and you have to be aware of where your expertise lies and where it is that you need to bring in experts who know the local territory. There is no way of doing it quickly. You must be prepared to take the time to do it properly, cover all your bases and ensure that you have the capacity to bring on board local partners. Now, because we trade globally, we have a deep understanding of the business standards that are required and the expectations of our customers in Europe, the US and Africa.”
Blake says the company is leveraging its longstanding innovation drive as call centre functionality migrates from voice to data-oriented services. “Instead of calling and speaking to someone, customers can now have their problems and queries resolved through live online chat and other Internet-based services. That does not mean voice will ever disappear, but online services is an area that will continue to grow rapidly as back office services that really enhance customer experience.”
The international expansion changed the way Blake did business. Because European and American markets are so much more advanced, it accelerated the company’s maturity at a rapid rate, enabling Blake to introduce a number of new service offerings.
“We did a lot of support work in the e-commerce environment, which allowed us to grow a whole new line of business in South Africa. We are now able to guide our clients through the e-commerce process and provide best practice advice, services and platforms. We are in the process of building the first of two major e-commerce platforms for a huge local retailer. The company is doing things that enable South African clients to catch up with their overseas counterparts at a rapid rate without having to pay the school fees.”
Bringing shareholders on board
Over the past ten years, the company has always had external shareholders, some of which have changed over time. Blake says it’s because they are drawn to the high-tech nature of the business, but once they’re in, they’re not quite sure what to do with it. His own conviction is that he would much rather own a smaller percentage of a big business than the whole of a smaller one. That’s why he was always open to investors.
In 2008, furniture retailer JD Group increased its shareholding in the company from 27,5% to 55%, with Blake remaining a shareholder and running its operations. “They were not customers before they became shareholders. Now that they are, JD Group have given us enormous reach into the retail market. Their involvement in the business immediately allowed us to be taken more seriously by some of the bigger players. It showed that we were a business of substance. We’ve pooled many of our resources when it comes to IT expertise.”
Although technology played a large part in growing his business, it was his unfaltering entrepreneurial spirit that led to the longevity and success of Blake & Associates, which, in turn, led to him being nominated in 2008 for the Ernest & Young ‘Emerging Entrepreneur of the Year’ Award. “As part of the awards process, I was asked what motivates me. I have to say that I love seeing what we have been able to conceive and create. My vision for the company turned into a working business model that employs people, creates opportunity and adds value to the economy. That’s exciting. It’s also far more rewarding than pure financial gain, which is what I think you’ll find with most true entrepreneurs. There is something amazing about developing a realistic, viable business proposition. From there, the opportunities just flow.”
Blake says that building the business had a massive impact on his personal life. If you don’t have the support of your family you cannot do it, he cautions, adding that he really had no option because he did not have a job. But although he had a wife and two kids, he simply could not see himself working in the corporate sector for the rest of his life.
He risked everything to set up the business, even selling T-shirts at that point to at least have some income. It was a big step for someone who had no inheritance, and no private school old boys’ network. He’s not sure that he would have the guts to do it all over again, but right now he is adamant that being an entrepreneur is who he is. One thing he was never prepared to sacrifice was time with his children. But that came at a price. The hours he spent with his kids had to be made up and he often worked late into the night. “You have to be there to support your children, but when you are in the service industry your clients really don’t care about things like that, so you have to do it entirely in your own time.”
Blake is candid about his interests. “I don’t read successful people’s biographies. They really don’t interest me. I learn from reading business books and from my mentors in the JD Group. I believe that if you have hit the ceiling in terms of what you can do, you must look past your capabilities. Make yourself scared. That’s the best way to grow.”
He’s always been the personal driver for the success of his business. It’s his unfaltering belief that things can always be done, not only differently, but also better, that has driven the massive success of the company.
He has consistently refused to accept the current status quo as the best way of doing the job. Together with his passion for delivering a top quality brand experience to his clients, this is what has been driving his company to integrate unsurpassed levels of technological innovation, business practice and managerial skill with exceptionally high levels of service.
Driven to innovate
One of Blake’s clients, an insurer, has handed over its entire social media interface to the company. Another of the retailers Blake acts for has one million customers and an average of 80 000 new account applications per month. “What interests me is what is being done to look after those one million clients, rather than just focusing on the new customers,” says Blake. And it’s that kind of thinking that has led to the company’s trademark innovation. “We are constantly looking for more web-enabled processes that allow us to chat live with customers. This means instant feedback, but we’re also trying to migrate out of the voice market into data interactions. Not only do you then have everything on record, but you’re also saving time and resources.”
That’s when he starts talking about the distinction between Blake’s classic business and innovation arm – which is what has enabled a business that’s more than 20 years old to stay way ahead of the game.
“The classic business takes care of itself these days and has an excellent management team. I focus on innovation and I have taken full responsibility for it. I do an enormous amount of research on the Net and I also have a team of seven researchers working with me. They go off and investigate markets; they go to trade shows, exhibitions and tech forums. We also serve several companies coming out of Silicon Valley, which obviously gives us great exposure to new technologies. It helps that we are now in a position where capital is not an issue, but innovation begins with great ideas and paying attention to your market – something we have always done. We’re going through another reengineering process, which is something we do regularly – every 18 months, in fact. We leave the classic business alone and hone new innovations. Then we take those to our clients in product form to find out if they are interested.”
Blake says that innovation requires a huge amount of effort and research. He has a long-standing association with Harvard and is a regular reader of the Harvard Business Review. Educating yourself, he says, is critical. He’s also a Twitter addict and interacts every day on the micro-blogging site. “I watch the feeds and click through whenever I see something that is relevant. We are now in the business of social media on top of everything else, so I have to be interested.”
When your business is all about customer service, it’s important to have the right employees. Blake has approached staffing as a vital component of his business – and a way to impact his local community.
1990 Blake is a business of one. He finds it difficult to convince early staff members that he will indeed be able to pay their salaries. One of his biggest challenges is finding people who are ready to join and take the risk alongside him.
2010 The company peaks at 3 000 employees and is actually focusing on downscaling its headcount and employing more technology. It’s possible to do this in such a data intensive business.Today, Blake hires unemployed school leavers, kids who have a wealth of experience on Facebook, Twitter and BBM. “Maybe it’s because I was once unemployed. I have empathy with these kids. We take on even those without experience, train them and help them tackle bigger things,” he says.
7 000 The number of people who the Blake group has employed over a period of 13 years, most of whom were unskilled and unemployed when they started with the company.
The Blake brand
Over its 20 year history Blake has grown from a one-man show to a business that employs 3 000 people and operates across three continents. Here’s the company in a nutshell.
Blake provides contact centre solutions in customer lifecycle management, offering a solution based on servicing niche markets and identifying unique partnerships involving business process enhancement and back-office outsourced solutions.
Blake is committed to working with clients throughout their customer lifecycle.
Client acquisition, customer service, customer retention and business process outsourcing are evolving in the South African market. These, together with broad-ranging cost saving initiatives among corporates, will support Blake’s activity levels. “We will continue to market traditional business services, but we are also pursuing opportunities to leverage our executive skill set to enhance business processes and provide differentiated service levels,” says Blake.
The company adds value through technology, people, process and relationships to improve service levels and productivity as well as delivering successful business outcomes. It also builds partnerships that enhance its customer value chain.
The company recently got a makeover and has a whole new look. The landscape was changing and the business needed to change accordingly. The rebranding campaign – from Blake & Associates to Blake – was the perfect way to introduce Blake’s embrace of the future, as well as showcase its in-house talent.
The company’s online presence needed to be renewed in line with the new branding. “The company’s web site, blake.co.za, is an essential integrated business tool. Not only does it facilitate business activity but it also serves as an important source of information for prospective clients,” says Blake.
Going The Extra Mile With Neil Robinson Of Relate Bracelets
In business, your offering is only as good as your relationships. Neil Robinson from Relate Bracelets explains how FedEx Express has helped the business grow into Africa and beyond.
- Who? Neil Robinson
- Company: Relate Bracelets
- Position: Managing Director
- Visit: relate.org.za
Neil Robinson, MD of Relate Bracelets understands the importance of business relationships. While Relate is a non-profit organisation, it is run like a business. It does not rely on donors, but instead produces and sells a product.
For each bracelet sold, one third of the income goes towards the materials and operating costs, one third supports the people who produce the bracelets, and one third goes to the charity for which that particular bracelet is branded.
In order for the business model to work and be sustainable, Relate’s partners are incredibly important. These include the retail chains that stock the product and who provide prime point-of-sale positioning, the charities who Relate works with, and most importantly, Relate’s logistics service provider, FedEx Express.
“Retail is all about visibility and availability,” explains Neil. “A brand is a living, breathing thing. People can see it, use it, and comment on it, but if they can’t access it, it’s all for naught. And so, at the point of purchase, it’s both visible and available, or it’s not.
“Logistics is key. You need to get your product to the retailer on time, 100% of the time. The expertise and focus that FedEx displays in supply chain and logistics encompasses far more than just retail, they understand our specific needs, making them a strategic partner, rather than merely a supplier.”
Building a relationship
The FedEx/Relate Bracelets relationship stretches back to 2009, when Relate Bracelets launched its first campaign with ‘Unite Against Malaria’ leading up to the 2010 FIFA World Cup.
“We did the first campaign in partnership with Nando’s,” says Neil. “Robbie Brozin was passionate about the cause, and he pulled in strategic partners to launch the campaign. Within two years we’d shipped hundreds of thousands of bracelets. FedEx was an incredible partner, ensuring the integrity of our product and time-sensitive deliveries, and we’ve worked with them ever since.”
As with all good B2B relationships, the FedEx and Relate Bracelets teams understand that regular strategy sessions and updates are important.
“FedEx understands the inner workings of our business,” says Neil.
“A successful campaign has multiple elements, from planning and strategy, to marketing support, pricing and distribution planning. Of these, distribution planning is the most critical. For us, the bridge between our brand and the consumer is logistics. FedEx have delivered beyond expectations. They literally and figuratively go the extra mile for us.”
Protecting a brand
FedEx has customers across different industries and each of their needs are different. In the case of Relate, who operate in the retail sector, buying patterns are important. “Retailers run a tight ship,” explains Neil.
“They have planning cycles and seasons. Besides the fact that penalty clauses are built into contracts, you can’t miss a deadline by two days, or you’re in the next cycle, and that might be two weeks later. Not only are you missing out on valuable shelf time, but this can affect an entire campaign. Lost sales can also influence the retailers’ buying decision the following season. FedEx has made it their business to understand our business, so they know what’s at stake and what’s important to us.”
FedEx has also played an integral role in the overall expansion of Relate Bracelets, particularly into new markets. “As a global organisation, FedEx has been absolutely critical in supporting us to grow our business into Africa, the US, Australia, the UK, Western Europe, and now New Zealand. They play an enormous role in the delivery of our products, with sophisticated tracking systems ensuring that the quality and integrity of our products are maintained.”
Through the relationship with FedEx, Relate experiences the benefits of working with a globally recognised and credible brand. “When you work with quality, you get quality.”
If you’ve ever bought a beaded bracelet that supports a cause (for example: United Against Malaria, Operation Smile SA or PinkDrive), chances are it was a Relate Bracelet. If you bought it at Woolworths, Clicks, Sorbet or Foschini, it most definitely was.
To date, Relate Bracelets has raised more than R40 million, which supports various charities and ‘gogos’, women living on government grants and supporting their grandchildren, and who desperately need the additional income Relate Bracelets provides.
Slikour’s Moto: If You Dream It, You Can Be It
Rapper and entrepreneur Slikour believes his success is the result of one key element: The aspiration to make something of himself, and create a platform for his voice to be heard. Now he’s bringing that mindset to South Africa’s black urban youth.
- Player: Siya Metane AKA Slikour
- Company: Slikouronlife.co.za
- Launched: 2013
- Visit: www.slikouronlife.co.za
Before you can achieve great success, you have to believe in the possibility of success. This is the single greatest secret to changing your circumstances — you have to believe it’s possible.
Did music or entrepreneurship come first? Siya Metane, aka rapper Slikour, isn’t sure himself. The two have worked hand in hand for him since he started selling cassette tapes of his own music when he was 12 years old.
What has developed over time however, is an innate and deep understanding that with his success comes a responsibility to pay it forward, and help his community and kids like him see that they can be anything they put their minds to.
If they can dream it, they can be it — provided they realise they can dream it in the first place. This is his challenge, and greatest driving force.
Start small, but dream big
I bought cassette tapes on Smal Street in the CBD for R5. My best friend, Lebo and I recorded our own rap music onto them and sold them in our neighbourhood for R15. We needed the mark-up — it meant we could buy more tapes, and also that we were making a profit.
I’m not sure if we were trying to start a business or launch our rap careers, but if you’re living in a hood like Leondale you don’t always recognise that there are opportunities open to you. No one is going to do it for you — you have to have your own aspirations, and find a way to make them happen.
Keep dreaming big, no matter what
That was one of the biggest and earliest lessons I recall growing up: The ability to dream big can be stifled out of you. I lived in a hood where there were no aspirations past our neighbourhood — the neighbourhood and its opportunities were everything. If 90% of the people you know are suffering, who are you to not suffer?
It’s a very limiting mindset, and one that does a lot of damage to our youth. I knew kids who had incredible potential, but could only look at their immediate environments for opportunities. So a budding young scientist doesn’t find a way to change the world — he finds a new way to make drugs.
Those are the limiting aspirations I was surrounded by. I call it the Trap, and it’s the driving force behind everything I do today. I want South Africa’s urban youth to recognise the Trap, and understand that they should have aspirations beyond it, because they have the abilities and potential necessary to break free.
Work hard, be determined and believe in yourself
I was lucky, I wasn’t a victim of the Trap. What so many people don’t understand is that I could have been. Hard work, drive and discipline aren’t enough to break free of the Trap. You need to believe you can break free — to look beyond your current circumstances. In my experience, that seemingly simple mindset shift is the biggest hurdle to overcome. It’s more complicated and pervasive than you can imagine.
Two things showed me a different way. First, my mom got me bursaries at Holy Rosary Convent and then St Benedict’s College. I was surrounded by rich white kids, full of privilege, and it struck me that here were the same talents and opportunities, but with a wealth of aspiration in the mix.
That was the real difference — not ability, but recognising that ability and having the aspiration to do something with it. It was eye-opening. The second was meeting my best friend, Lebo Mothibe. Lebo, or Shugasmakx, as he’d later be known in the music world, had one foot in the privileged world, and one foot in our world.
His mom lived in the hood, his dad was a wealthy entrepreneur who lived in Illovo. And Lebo straddled both worlds effortlessly, and with humility. But he looked beyond the limiting beliefs held by many of his neighbourhood peers.
Find people to inspire you to reach success
His dad was also the first self-made, wealthy black man I met. But when I heard his story, I realised that it wasn’t overnight success. He’d slept on Lebo’s mom’s couch while he slowly but steadily built his business. It gave me an understanding that success is earned. You need to work at it, and push on against adversity. This had a huge impact on me.
Lebo was the ying to my yang. Even though we didn’t think of each other as business partners, that’s what we were, from the age of 12. We formed Skwatta Kamp, we hustled and shook up the music industry together, and changed the face of rap music in South Africa.
I was the dreamer, the visionary, and Lebo was the executor. He found a way to make my crazy schemes and ideas come to life. This is exactly what a partnership should be — helping each other grow, and complementing diverse skill sets.
Build your success, one step at a time
We built our success, brick by brick. I entered a TV show competition, Jam Alley, and won. I used the cash and Dions vouchers to buy recording equipment. Lebo’s dad helped with speakers and a keyboard. My brother, who was studying IT, downloaded software and helped us with our recording quality. Everyone pitched in with what they could.
Be your own biggest cheerleader
We tried the recording contract route for a while, but realised that the only people who cared about our success were us. And so we hit the streets — hard. We had street crews, we sold our own CDs and negotiated with music stores to carry our albums.
Recording studios kept saying they’d sign us, but they never had a studio available. They just didn’t see the value in rap and hip hop. They didn’t believe there was money in it in South Africa. We needed to prove there was.
Gallo finally approached us and signed us after we won at the South African Music Awards (SAMAs) as an independent act. We used real guerrilla tactics to get our name out there — on stage, with that platform, we told our fans that if a music store didn’t carry our album, to burn it down. We wanted the attention — that’s how you build a name.
Our first album went gold, and we used that to push the idea of rap into mainstream media. If 20 000 people bought the album, another 200 000 had bootlegged it. There was money here; and slowly brands and advertisers started realising we were right.
Drive a movement with your business
We were musicians, but first and foremost we were driving a movement, and that meant we needed to be businessmen as well. We hosted end of year parties, and got brands on board, realising we had a captive audience that aligned with their target market demographics. We started our own label, Buttabing Entertainment.
Our goal was to find and nurture young musicians from the hood to get them established in the industry, and show other kids in the Trap that it could be done: Anyone can create their own destiny. One of the things I’m proudest of is discovering a kid in Katlehong, Senzo Mfundo Vilakazi, who would develop into Kwesta.
He’s doing phenomenally well, and recently appeared on Sway in the Morning, one of the biggest hip hop shows in the US. Our success spilt over into Kwesta, and now his meteoric rise will hopefully inspire a whole new generation to dream bigger than they ever thought possible.
Pivoting to further growth
All success has its pinnacle. By 2010 we had achieved so much as Skwatta Kamp. We’d brought rap music into the mainstream and opened opportunities for countless kids, as music labels actively sought rap and hip hop acts. I realised that I’d hit a ceiling. I needed to step back, regroup and figure out what to do next.
What I did was something I’ve only ever associated with privilege. I moved home, spent a lot of time lying on the couch, and wrote. I wrote my life, my lessons, my dreams, my ideas. I don’t know how I reached a point where I was able to do that, but I’m grateful. I started collecting my thoughts and understanding my purpose.
During that time I was approached to join a few marketing agencies. I had no formal marketing training, but we’d worked with big brands at our parties and activations.
Sprite was the first to recognise that they had an opportunity to authentically connect with the black urban youth through us, and so we partnered up. I learnt above-the-line marketing in a Coca-Cola boardroom, and built onto what we’d learnt on the streets about below-the-line marketing.
Take a step back, and rediscover your purpose
That experience had drawn attention, and so for a while I joined an agency. But its mandate was sponsorships, and my heart was with the black urban youth. I’d discovered my purpose, even if I’d subconsciously been living that purpose for almost 20 years.
I wanted to create a platform that gives young black artists a voice; established artists a way to reach out to the youth that other platforms don’t offer; and brands a way to authentically connect with that audience — not just to sell products, but to show black urban youth that their culture is important, that it holds value, and that they, in turn, hold value.
Adidas’s support of Run DMC in the US showed that kids from the ghetto had a message worth listening to. Big brands have the power to connect the unheard and voiceless to the mainstream, if it’s done correctly. I had the marketing experience to understand the ROI that brands need, as well as what I could do with that to support black urban youth.
All I had were dreams and a URL, but that was enough. I quit my job and launched my website, Slikouronlife.
Reveal opportunities and create aspirations with your message
This is my politics and CSI. If we can get marketing to marry culture, and change the positioning and perception of young black South Africans, we can show there are opportunities out there, and create aspirations.
But we need to put culture first and tap into the authenticity of who we are as South Africans. We need to recognise and acknowledge the mental traps that exist in our neighbourhoods, and that we are victims of limiting beliefs, and then show that there is another way.
Everyone told me I was nuts. That black people don’t go online. I did it anyway. With Skwatta Kamp we had created a market for our music. Kids supported us; my name added value — and then brands came on board. We now average between 200 000 and 250 000 unique visitors a month, which is impressive for a mainstream website, let alone a niche music site.
Ten months ago we were a team of three operating from my house with one desk. Today we’re a team of ten with one focus: To make a real difference on the ground. To give the voiceless a voice. To prove that if we can drive the aspirations of South Africa’s urban youth, the sky will be the limit.
Edward Moshole Founder Of Chem-Fresh Started With R68 And Turned It Into A R25 Million Business
Edward Moshole started a business in 1999 with just R68 in his pocket. Today he has a company that not only has a turnover upwards of R25 million, but is also on the cusp of expanding to the next level. Here’s how he’s turning clients into partners.
- Player: Edward Moshole
- Company: Chem-Fresh
- Established: 1999
- Visit: www.chemfresh.co.za
In 1999, Edward Moshole was a cleaner with just R68 in his pocket, but he noticed a business opportunity.
Good quality detergents and disinfectants could make a tough cleaning job much easier, so he started buying quality products in bulk and selling them to his fellow cleaners. He wasn’t satisfied, though. He wanted a business that made and sold its own products. So, he tackled the long and arduous process of creating cleaners and detergents that could pass strict regulations and compete with the best products on the market.
It wasn’t easy, but he kept at it. In fact, he only got his first real breakthrough in 2006 when a supermarket agreed to start stocking his products. Today, his Chem-Fresh products can be found all over Africa, and he counts Pick n Pay as one of his main clients. How did Moshole manage to turn R68 into an empire?
Here are his rules for building a large and sustainable operation.
1. Find the right clients
“Very early on, I identified Pick n Pay as a must-have client. I could see that the company was changing its strategy — it was starting to move into townships and rural areas, places where it hadn’t been operating until then — and I thought it would be the perfect place to sell Chem-Fresh products,” says Moshole. But getting in wasn’t easy.
“As a small business, you don’t get to sit down with decision- makers. Becoming a supplier to a large retailer is a difficult process. It took me years to get a foot in the door, but I didn’t give up. I just knew that Pick n Pay was the right company to do business with, so I kept at it.
I refused to take no for an answer. Today, Pick n Pay operates more like a partner than a client.
Thanks to my partnership with Pick n Pay, I’ve been able to scale Chem-Fresh quickly and access a distribution channel that allows Chem-Fresh products to be sold all over the continent. Once you have the right clients, you gain instant clout and reliability.”
2. Own the manufacturing process
When starting out, entrepreneurs often have little choice but to buy other companies’ products and resell them. It’s not necessarily a bad thing — it can be a successful strategy. However, it can eventually limit your growth.
Firstly, buying and reselling products places a cap on your margins. When you own the manufacturing process, you can increase your margins, since making and selling products tends to offer wider margins than merely buying and reselling.
That said, you have to keep in mind that this is only true when you operate at a certain scale. Making and selling something in small quantities can often be more expensive and time consuming than simply buying it from a supplier. You need to crunch the numbers and make sure that the expense of a manufacturing facility is actually worth it in the long run.
Secondly, it allows you to keep control of the quality of your product. “The secret to any great brand is consistency,” says Moshole.
“People should know what they can expect from the brand, and one of the best ways to ensure this is to have total control of your product. If you make it yourself, you’re in charge of the quality.”
3. Be willing to diversify
Some companies can grow while sticking to a very specific niche, but most have no other option but to diversify. Although Chem-Fresh started out selling just one or two products, Moshole soon started to expand the range. The company now has more than 100 products.
“Generally speaking, you can only capture so much of a market. Sometimes it makes sense to actively try to grow your market share, but it’s also a good idea to diversify. Not only does this open more revenue streams, but it also protects the business against market changes. So, if the sales of one product slows down, another speeds up and everything evens out,” says Moshole.
But the important thing is not to stray too far from your comfort zone. Chem-Fresh now has a large product range, but it has stuck to an industry that it is knowledgeable about. The company has built a name for itself within a specific industry.
4. Build a strong foundation
“Don’t wait too long to start thinking about the long-term life of your business,” advises Moshole. “The stronger the foundation of the business, the easier it is to grow it, so you need to implement the right systems and processes early on. If you don’t, the business will fall apart without you.
“You will always be very involved at an operational level. You’ll be so busy with the daily grind, that you’ll never be able to take a strategic view and focus on building the company.
So, you need the right systems and the right people. You need to know that the business can keep going without you. If you do this, you will be able to grow the company while others deal with the operational demands.”
There’s no substitute for perseverance
It took Edward years to get his product onto Pick n Pay’s shelves, but he wouldn’t take no for an answer. Today, the relationship is more like a partnership.
Own the process
In the right quantities, producing and selling your own product can significantly increase your margins over selling someone else’s products.
Strategically increase revenue streams
Diversifying your product range within your niche allows you to offer the same clients a greater range, tap into new markets, and protect the business against market changes.
Take a long-term view when contemplating the growth of your company. It’s never too soon to prepare a business for growth. Implementing the right systems and processes right now can make it much easier to scale the operation down the line.
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