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Dorego’s: Steven Dally

Eight years ago Steven Dally opened his first Dorego’s in Metro Mall taxi rank in Johannesburg’s CBD. He had just relocated to Joburg from Kimberley and Dorego’s was relaunching in the City of Gold after exiting Gauteng in the late 1980s.

Nadine Todd

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Steven Dally

According to Steven Dally, owning ten franchise stores is not very different from owning one. As long as strong systems are in place, procedures are followed, staff, managers and operations managers are chosen carefully, and he pays attention to daily, weekly and monthly reports, he can maintain a firm grip on the daily operations of all stores.

That’s not to say that implementing and perfecting those systems has not been a challenge or that such massive growth has not meant long hours and hard work. Spending the first three years personally opening his stores at 7am and closing after 10pm every day, never seeing daylight, working seven days a week and being willing to do any job that needed doing, including cleaning the floors, required real dedication.

Over and above hard work, Dally has witnessed mob justice, seen firsthand how the taxi industry controls its ranks, and even forged relationships with taxi bosses.

Opening his first store in the heart of Joburg’s CBD at the Metro Mall was a huge gamble. But thanks to dedication and a willingness to work within the community where he chose to set up shop, he has reaped the rewards.

Maverick Franchisee

At a time when many franchises were steering clear of the CBD, Dorego’s embraced the idea of carving a niche in the country’s busiest hub. But the attempt was not for the fainthearted. With over 3 500 taxis entering and exiting the rank daily, thousands of commuters and a less than effective police presence, the store had the potential to do extremely well – or become a target for vandalism and robberies.

“Thousands of people walk past that store each day. It was a fantastic market to tap into. I recognised that, but I also knew that it would be quite a tough environment to work in. In those days the CBD was a bit like the Wild West – street justice, violence and robberies were all par for the course, in and amongst the normal commuters just trying to get to work and go about their lives,” says Dally. “That’s why I approached head office and insisted that inexperienced management could not be tasked with launching the store.”

An in-store Dorego’s manager since 1996, Dally was approached by the franchisors to relocate to Joburg as a consultant when they decided to re-enter the Gauteng market in 2001. He knew the brand, and he knew what he was talking about. The franchisors realised that he would be the ideal owner of one of the first Dorego’s in Joburg – particularly given its positioning.

Understanding the Community

Among his unique challenges were the laws that taxi owners and drivers impose in the ranks. “Our first exposure to how things worked in the CBD was a site visit to Metro Mall store before it opened. My first partner, Christopher Brown, and I arrived to check the shopfitting and were met by taxi drivers dragging around a passenger who had tried to steal from them. We went around the back to get to the store and half an hour later we left. That same passenger was being dangled by his ankles from the fourth storey. All we could think was ‘What have we gotten ourselves into? Are we completely mad?’”

To succeed, Dally needed to find a way to operate within the taxi ranks. “In those first few years we often heard shootings. I’ve had people dragged through my stores by taxi drivers meting out justice.

I once even saw a naked man run past the window – closely followed by a mob. We couldn’t get involved, but I needed to find a way to be accepted as well – and possibly enjoy some of that street protection.”

So Dally got to know the taxi bosses, drivers, queue marshals and police in the area. “They needed to know me and like me. We had to build a relationship with each other.” Eight years down the line and six successful stores in the CBD later and Dorego’s has become a trusted brand, and Dally  a familiar face.

“In the past four to five years the Joburg Police Department has put a lot of energy and focus into the CBD as well,” he says. “They are cleaning the CBD up and it’s become a very different place. But even though the CBD is safer, it still pays to know your clientele well. Together we form a community, and that is vital to brand building and brand loyalty. We’ve developed a solid reputation.”

Finding the Cash

Before Dally could be a success, though, he needed finance. “In 2002 securing bank finance was less of a challenge than it is today, but I still had to present an airtight business plan to the bank, I needed someone to sign surety for the loan, and I needed cash.” Dally already had a good relationship with franchisees, Gerald and Cedric Brown, who had also owned stores in Kimberly and were now eyeing Joburg.

“Gerald and Cedric signed surety for me, which meant I got the loan but cash flow was still a necessity. I cashed in my leave, sold what I could and maxed out my credit cards,” remembers Dally. “I put everything I had into that store.” Gerald and Cedric went on to buy the entire franchise in 2005.

Since securing that first loan, and then a second one for his next store, Dally has preferred to rely on cash rather than bank loans. “The repayment on a bank loan eats straight into your cash flow,” he advises. “The more cash you use the better your overall profits – and the more you will care about your investment.”

From One Store to Ten

In Dally’s case, that initial investment has grown from one store to ten. Within six months of opening Metro Mall’s store, a prime position opened in Park Central. “Park Central was even bigger and busier than Metro Mall and I could see the possibilities,” says Dally. “Location is vitally important in this business, and I love grabbing an opportunity with both hands when I see it. That’s probably why I’ve just opened my tenth store, this one in Thembisa. I don’t know how to walk away from a good opportunity.”

While owning ten stores in and around Joburg stretches Dally thin and he admits that his biggest problem is that he doesn’t spend enough time in each one, the franchise model lends itself to owning multiple stores, and there are actually benefits to owning more than one.

“Franchisors are very supportive of franchisees owning multiple stores. They already have a relationship with you and they’ve seen how you operate,” explains Dally. “It’s a win-win situation. It’s good for the brand and each new store opens on an established footing.”

For Dally, multiple stores was the natural progression of his own development. “Buying into a franchise is all about the systems. They are tried and tested – and they work. It makes opening another store simple, because you already have the blueprint.”

Of course, each store is slightly different. The staff, location and clientele all add to a store’s personality, and often what works for one store does not necessarily work for another. “Systems need tweaking for different stores,” agrees Dally, “but the procedures remain the same.”

For Dally, each new store means four things: growing the brand that he has invested in; the opportunity to fine-tune his systems; revenue growth and growth as a businessperson. “Each store is a challenge. The models and systems I have created enable me to successfully run multiple stores, and the revenue those stores generate gives me the start-up capital needed to invest in each new venture – but that’s just how I manage to own multiple stores.”

Franchise Support

Even though franchisees own their own stores, they operate within a group. That means working towards goals that benefit franchisee and franchisor alike. “Communication is vitally important in this business,” says Dally. “I need to be in regular contact with my franchisor and franchise consultants, as well as my own operational team, who I speak to anywhere from ten to 30 times a day. Even though I am hands on, I can’t be everywhere at once. I rely on my team. Similarly, if we have a problem, chances are someone else might have already had and solved the same issue.

“Let your franchisor know what problems you are experiencing. Too many franchisees say they do not receive enough support from their franchisor, but they are not keeping the channels of communication open either. If you don’t know something, pick up the phone and call someone. The point of operating within a group is that you have an entire support system to assist you and offer advice when you need it.”

Getting the Systems Right

Beyond his ability to thrive in the CBD, Dally won FASA’s Franchisee of the Year award because he designed and implemented systems that have since been applied across the franchise group, and also because of his close relationship with the franchisor.

He has worked within the Dorego’s framework for 14 years, and during that time he has gone from perfecting old systems to implementing new ones. “My systems work for me, so why shouldn’t they work for others?” he asks. Dally’s successful systems have formed the basis for the group’s guides.

“We all need to keep learning, every day. You also need to be open to change, as the market determines how you run your store. We are adjusting our systems constantly – but they form a strong framework to start from, and let’s face it, when you’ve invested money in a business, you need to make it work. Procedures and systems keep things organised and running smoothly, and they provide solutions for problems.”

As a multiple store owner, Dally also recognises the need for all his own stores to operate along the same principles. “My procedures might change slightly from store to store, but my principles stay the same: quality, cleanliness, reliability, maintenance and a focus on sales are paramount.”

Home Advantage

“My stores are only as successful as the calibre of staff I hire. Even though I visit my stores every day and I am hands-on, I cannot be everywhere at once. I rely on my people,” says Dally.

Dorego’s has a franchise-set guide for interviewing and hiring staff, which Dally adheres to, but he also believes in getting his existing staff involved in new hires. “My four operational managers who oversee the stores are involved in the hiring of new store managers. It is essential that they all get along and communicate well. Similarly, my managers are involved in hiring individual store staff. The more input the better.

“I expect my staff to have strong communication skills and to be friendly. Experience is far less important than good interpersonal skills. We can train people in our philosophy, brand structure and systems, but we need someone with a good personality as a base to work from.”

Dally is also a strong believer in getting opinions from staff before making any decisions. “We recently changed a few items on the menu based on the interaction between staff and customers,” he reveals. “They are in constant contact and it would be foolish of me not to ask for their input.”

Simply communicating with your staff is not enough though. “I care about the business and am willing to get my hands dirty, from flipping burgers to mopping floors to doing the paperwork. I lead by example. I don’t expect my staff to do something I’m not willing to do, and I show them what I consider to be the right way of doing things,” says Dally. “The right attitude is vitally important. A business cannot run by itself. It takes hard work and dedication from everyone involved.”

Dorego’s Milestones

  • Joe Dorego opened the first Captain Dorego’s in Cape Town in the early 70s.
  • After a successful period the Cape Town operation was sold to Major Foods, and later to Inter-leisure. However, stores in Bloemfontein remained independent.
  • In 1996 the brand was taken over by Carlos Nunes and in 2005 franchisees Gerald and Cedric Brown – who have been involved with the franchise since 1996 when they opened their first store in Kimberley – purchased the entire franchise operation.
  • In 2005 Captain Dorego’s became  Dorego’s, undergoing a massive rebranding.
  • There are currently 72 stores in the chain, predominantly situated in the Free State and Northern Cape, although its Gauteng presence is growing.

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

Entrepreneur Profiles

6 Lesson Gems From Appanna Ganapathy That Helped Him Launch A High-Growth Start-Up

Twenty years after first wanting to own a business, Appanna Ganapathy launched ART Technologies, a business he aims to grow throughout Africa, starting with Kenya thanks to a recently signed deal with Seacom. As a high-growth entrepreneur with big plans, Appanna spent two decades laying the foundations of success — and now he’s starting to collect.

Nadine Todd

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Vital Stats

Like many entrepreneurs before him, Appanna Ganapathy hadn’t even finished school and he was already thinking about his first business venture. A friend could secure the licensing rights to open Nando’s franchises in Mozambique, and they were very keen on the idea — which Appanna’s mom quickly dampened. “You can do whatever you want,” she said. “As long as you finish your degree first.”

Unlike many other entrepreneurs however, Appanna not only finished his degree, but realised that he had a lot of skills he needed to develop and lessons to learn before he’d be ready to launch the business he wanted.

“We launched ART Technologies just over two years ago. If I had started any earlier, I don’t think I would have been as successful as I am now,” he says.

Here are six key lessons that Appanna has learnt along his journey, which have allowed him to launch a high-growth start-up that is positioned to make an impact across Africa.

1. You don’t just need a product – you need clients as well

Business success is the ability to design and execute a great product and solution, and then be able to sell it. Without sales, there is no business. This is a lesson Appanna learnt while he was still at university.

“I was drawn to computers. I loved figuring out how they worked, playing computer games — everything about them,” he says. “My parents lived in Mozambique, and during my holidays I’d visit them and a friend who had a computer business. I helped him assemble them and thought I could do this too while I was studying. I convinced my dad to buy me a car so that I could set up my business — and never sold or assembled a single computer. I delivered pizzas instead.”

So, what went wrong? The simple truth was that at the time Appanna had the technical skills to build computers, but he lacked the ability to sell his product.

“If someone had said, ‘I’ve got an order for 30 computers’, I would have filled it — but to go out and get that order — I didn’t really even know where to start.”

2. Price and solution go hand-in-hand

As much as you need the ability to sell your solution, you also need a market that wants and needs what you’re offering, at a price point that works for everyone.

In 2007, Appanna was approached by a former supplier whom he had worked with while he was based in Mozambique. The supplier had an IT firm and he wanted to expand into South Africa. He was looking for a local partner who would purchase equity shares in the company and run the South African business.

“I loved the opportunity. This was something I could build from the ground up, in an area I understood well,” says Appanna. The firm set up and managed IT infrastructure for SMEs. The value proposition was simple: “We could offer SMEs a service that they could use for a relatively low cost, but that gave them everything an enterprise would have.”

The problem was that although Appanna and his team knew they had a great product, they were competing on price with inferior products. “If we couldn’t adequately unpack the value of our solution, an SME would choose the cheaper option. It was a big lesson for me to learn. It doesn’t matter how good the solution is that you’re offering — if it’s not at a price point that your target market accepts, they won’t choose you.”

It was this understanding that helped Appanna and his team develop the Desktop-as-a-Service solution that ART Technologies now offers the SME market.

“While I was developing the idea and the solution, I needed to take three key things into account: What do SMEs need from an IT infrastructure perspective, what is the most cost-effective way to offer them that solution, and what will the market pay (and is it enough to cover our costs and give us a small profit margin)?”

Appanna’s experience in the market had already taught him how cost-conscious SMEs are, and so he started developing a solution that could deliver value at a price point SMEs could accept. His solution? A unique Desktop-as-a-Service product that combines all the processing power and Microsoft products a business needs, without any capex outlay for servers or software.

“It’s a Cloud workstation that turns any device into a full Windows computer,” Appanna explains. “We hold the licences, and our clients just access our service. A set-up that would cost between R180 000 and R200 000 for 15 users is now available for R479 per user per month.”

It took Appanna and his partners time to build the solution, but they started with the price point in mind, which meant a solution could be designed that met their needs as well as the needs of the market.

“Too many businesses set everything up, invest in the solution, and then discover they can’t sell their product at the price point they need. My time in the market selling IT and infrastructure solutions gave me invaluable insights into what we needed to deliver on, and what we could realistically charge for our service.”

3. Get as much on-the-ground experience as you can

appanna-ganapathy-art-technologies

The time that Appanna spent building the IT firm he was a part-owner of was invaluable. “I started as a technical director before being promoted to GM and running the company for three and a half years. Those years were very, very important for me. They’re where I learnt everything about running a business.

“When I started, I was responsible for sales, but I didn’t have to actually go out and find clients, I just had to meet them, compile quotes and handle the installations. Everything I did was under the guidance of the company’s CEO, who was based in Mozambique. Being the guy who did everything was the best learning ground for me. It set me up for everything I’m doing today. In particular, I learnt how to approach and deal with people. Without people and clients your business is nothing.”

Appanna didn’t just learn by default — he actively worked to expand his understanding of all facets of the business. “At the time I wasn’t planning on leaving to launch my own business,” he says. “I was a shareholder and I wanted to grow that business. That meant understanding as much as possible about how everything worked. If there was something I wasn’t sure of — a process, the numbers, how something worked — I asked. I took personal responsibility for any errors and got involved in every aspect of the business, including areas that weren’t officially ‘my job’. I wanted to really grow and support the business.”

4. Stay focused

Interestingly, while the experience Appanna has accumulated throughout his career has allowed him to build a high-growth start-up, it also taught him the importance of not wearing too many hats as an entrepreneur.

“I’m glad I’ve had the experience of wearing multiple hats, because I’ve learnt so much, but I’ve also learnt that it’s important to pick a lane, not only in what you do as a business, but in the role you play within your business. I also race superbikes in the South African Kawasaki ZX-10 Cup; through this I have learnt how important it is to focus in the moment without distractions and this is a discipline I have brought into the business.”

“If you’re the leader of an organisation, you need to let things go. You can’t be everything to everyone. When I launched ART Technologies, I knew the key to growth would be the fact that although I’m technical, I wasn’t going to run the technical side of the business. I have strong technical partners whom I trust, and there is an escalation framework in place, from tech, to tech manager, to the CTO to me — I speak tech and I’m available, but my focus is on strategy and growth. I believe this is the biggest mistake that many start-ups make. If you’re wearing all the hats, who is looking at where you’re going? When you’re down in the trenches, doing everything, it’s impossible to see the bigger picture.”

Appanna chose his partners carefully with this goal in mind.

“All the partners play a very important role in the business. Ruaan Jacobs’s strength is in the technical expertise he brings to the business and Terry Naidoo’s strength is in the support services he provides to our clients. Terry is our technical manager. He has the most incredible relationship with our customers — everyone wants to work with Terry. But there’s a problem with that too — if we want to scale this business, Terry can’t be the technical point for all of our customers.

“As partners we have decided what our blueprint for service levels will be; this is based on the way Terry deals with clients and he is developing a technical manual that doesn’t only cover the tech side of the business, but how ART Technologies engages with its customers.

“Terry’s putting his essence down on paper — a step-by-step guide to how we do business. That’s how you build a service culture.”

5. Reputation, network and experience count

Many start-ups lack three crucial things when they launch: Their founders haven’t built up a large network, they don’t have a reputation in the market, and they lack experience. All three of these things can (and should) be addressed during start-up phase, but launching with all three can give the business a valuable boost.

Appanna learnt the value of networks at a young age. Born in India, he moved to Zambia with his family as a young child. From there he moved to Tanzania and then Mozambique, attending boarding school in Swaziland and KwaZulu Natal. At each new school, he was greeted by kids who had formed strong bonds.

“I made good friends in those years, but at each new school I recognised how important strong bonds are, particularly as the outsider.”

Appanna’s early career took him back to Mozambique, working with the UN and EY on various projects. When he moved to South Africa, as a non-citizen he connected with his old boss from the UN who offered him a position as information officer for the Regional Director’s team.

His next move would be to the tech company that he would run for just over three years — also the product of previous connections. “Who you know is important, but how you conduct yourself is even more so,” says Appanna. “If your reputation in the market place is good, people will want to do business with you.”

Appanna experienced this first hand when he left to launch his own business. “Some key clients wanted to move with me,” he says. “If I had brought them in it would have settled our business, but I said no to some key customers who hadn’t been mine. I wasn’t ethically comfortable taking them with me.”

One of those multinational clients approached Appanna again six months later, stating they were taking their business out to tender and that they were hoping ART Technologies would pitch for it. “Apart from the Desktop-as-a-Service product, we also provide managed IT services for clients, particularly larger enterprise clients. Due to the client going out on tender and requesting for us to participate, we pitched for the business and won. The relationship with this client has grown, allowing us to offer them some of our services that they are currently testing to implement throughout Africa.”

“I believe how we conduct ourselves is essential. You need your own personal code of ethics, and you need to live by it. Business — particularly in our environment — is built on trust. Our customers need to trust us with their data. Your reputation is key when it comes to trust.”

Interestingly, although Appanna and his team developed their product based on a specific price point, once that trust is built and a certain standard of service is delivered, customers will pay more.

6. Start smart and start lean

Appanna was able to launch ART Technologies with the savings he and his wife, Kate, had put aside. He reached a point where he had ideas he wanted to take to market, but he couldn’t get his current business partners to agree to them — and so setting up his own business became inevitable.

Although he was fortunate to have savings to bootstrap the business, it was essential for the business to be lean and start generating income as quickly as possible. This was achieved in a number of ways.

First, Appanna and Kate agreed on a start-up figure. They would not go beyond it. “We had a budget, and the business needed to make money before that budget was reached.” The runway Appanna gave himself was only six months — highly ambitious given the 18-month runway most start-ups need. “Other than my salary we broke even in month three, which actually extended our runway a bit,” says Appanna.

Appanna had a server that he used to start with, and purchased a second, bigger server four months later. He also launched another business one month before launching ART Technologies — ART Call Management, a virtual PA services business that needed a PABX system, some call centre technology and two employees.

“I’d been playing around with the idea for a while,” says Appanna. “We were focused on SMEs, and I started noticing other challenges they faced. A lot of entrepreneurs just have their cellphones, but they aren’t answering them as businesses — it’s not professional.

“In essence we sell minutes — for R295 you get 25 incoming calls and 50 minutes of transferred calls. We answer the phone as your receptionist, transfer calls and take messages. How you use your minutes is up to you. For example, if you supply the leads, we can cold call for you. ART Technologies uses the call management business as a reception service and to do all of our cold calling. It’s kept the business lean, but it’s also brought in an income that helped us with our runway.” In 2017 ART Call Management was selected as one of the top ten in the SAGE-702 Small Business Awards.

The only problem with almost simultaneously launching two businesses is focus. “It’s incredibly important to know where you’re putting your focus,” says Appanna. “The call management business has been essential to our overall strategy, but my focus has been pulled in different directions at times, and I need to be conscious of that. The most important thing for any start-up is to know exactly where your focus lies.”


Into Africa

Thanks to a distribution deal signed locally with First Distribution, ART Technologies was introduced to Seacom, which has available infrastructure in a data centre in Kenya.

“It’s a pay-per-client model that allows us to pay Seacom a percentage of every client we sign up,” says Appanna. “First Distribution will be our sales arm. They have a webstore and resellers, and we will be opening ART Kenya with a shareholder who knows the local market.”

From there, Appanna is looking to West Africa and Mauritius. “We have the product and the relationship with Seacom gives us the foothold we need to grow into East Africa.”

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Entrepreneur Profiles

Kid Entrepreneurs Who Have Already Built Successful Businesses (And How You Can Too)

All over the world kids are abandoning the traditional notion of choosing a career to pursue until retirement. Gen Z aren’t looking to become employable job-seekers, but creative innovators as emerging business owners.

Diana Albertyn

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Do kids have an advantage or disadvantage when it comes to starting and building a company? It depends on how you look it. Juggling school, friends, family and other aspects of childhood and adolescence comes with its own requirements, but perhaps this is the best age to start.

“Being an entrepreneur means having to learn, focus, and connect to people and these are all traits that are valuable throughout life. Learning this when you are young is especially crucial, and will set you up for success and to be more open to other opportunities,” says billionaire investor, Shark Tank personality and author Mark Cuban.

Here are some of the most successful kidpreneurs who have cashed in on their hobbies, interests and needs to start and grow million dollar businesses borne from passion and innovation:

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Entrepreneur Profiles

30 Top Influential SA Business Leaders

Learn from these South African titans of industry to guide you on your entrepreneurial journey to success.

Nicole Crampton

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Entrepreneurship is said to be the answer to South Africa’s unemployment challenges and slow growth, but to foster entrepreneurship we ideally need business leaders to impact grass root efforts. Business leadership is vital to improved confidence and growth. These three titans of global industry say:

  • “As we look ahead, leaders will be those who empower others.” – Bill Gates
  • “Leaders are also expected to work harder than those who report to them and always make sure that their needs are taken care of before yours.” – Elon Musk
  • “Management is about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could.” – Steve Jobs

Here are 30 top influential SA business leaders forging the path towards a prosperous South African future.

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