Connect with us

Entrepreneur Profiles

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

Published

on

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+.

Continue Reading
Advertisement
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Company Posts

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.

FedEx

Published

on

By

relate-bracelets-neil-robinson

Vital stats

  • 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.”

Related: Zenzele Fitness’s Clever Tactics To Grow In Next To No Time

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.”

Supporting growth

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.”

Related: Entrepreneur BB Moloi’s Inspiring Story of Rise To Success Through Grit And Hard Work

The business

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.

Continue Reading

Entrepreneur Profiles

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.

Nadine Todd

Published

on

116-if-you-dream-it-you-can-be-it

VITAL STATS

Take note

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.

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

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.

Related: Zuko Tisani Learnt These 7 Invaluable Lessons On His Path To Success

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.

Related: Self-Made Millionaire At 24 Marnus Broodryk On How To Build A R1 Billion Business

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.

Related: Entrepreneurial Powerhouse TBO Touch On How Success Is Built From Small Acts

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.

Related: Shark Tank’s Romeo Kumalo Weighs In On High-Impact Entrepreneurial Businesses

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.


Related: Watch List: 50 Top SA Small Businesses To Watch

Continue Reading

Entrepreneur Profiles

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.

GG van Rooyen

Published

on

edward-moshole

Vital Stats

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.

Related: Attention Black Entrepreneurs: Start-Up Funding From Government Grants & Funds

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

chem-fresh-products

PC: risingafrica.org

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.

Related: Sibongiseni Mbatha’s Top Collaboration Techniques To Grow Your Business

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.”


Key Insights

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 NOTE

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.


Related: 6 Of The Most Profitable Small Businesses In South Africa

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending