- 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.
1Find 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.”
2Own 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.”
3Be 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.
4Build 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.
Jason English On Growing Prommac’s Turnover Tenfold And Being Mindful Of The ‘Oros Effect’
Rapid growth and expansion can lead to a dilution of the foundational principles that defined your company in its early days. Jason English of Prommac discusses how you can retain your company’s culture and vision while growing quickly.
- Player: Jason English
- Position: CEO
- Company: Prommac
- Associations: Young President’s Organisation (YPO)
- Turnover: R300 million (R1 billion as a group)
- Visit: prommac.com
- About: Prommac is a construction services business specialising in commissioning, plant maintenance, plant shutdowns and capital projects. Jason English purchased the majority of the company late in 2012, and currently acts as its CEO. Under his leadership, the company has grown from a small business to an international operation.
Since Jason English purchased Prommac in 2012, the company has experienced phenomenal growth. At the time he took over as owner and CEO, it was a small operation that boasted a turnover below R50 million.
Today, Prommac is part of a diversified group of companies under the CG Holdings umbrella and alone has grown it’s turnover nearly ten fold since Jason English took over. As a group, CG Holdings, of which Jason is a founder, is generating in excess of R1 billion. How has Prommac managed such phenomenal growth? According to Jason, it’s all about company culture… and about protecting your glass of Oros.
“As your business grows, it suffers from something that I call the Oros Effect. Think of your small start-up as an undiluted glass of Oros. When you’re leading a small company, it really is a product of you. You know everything about the business and you make every decision. The systems, the processes, the culture — these are all a product of your actions and beliefs. As you grow, though, things start to change. With every new person added to the mix, you dilute that glass of Oros.
“That’s not to say that your employees are doing anything wrong, or that they are actively trying to damage the business, but the culture — which was once so clear — becomes hazy. The company loses that singular vision. As the owner, you’re forced to share ‘your Oros’ with an increasing number of people, and by pouring more and more of it into other glasses, it loses the distinctive flavour it once had. By the time you’re at the head of a large international company, you can easily be left with a glass that contains more water than Oros.
“Protecting and nurturing a company’s culture isn’t easy, but it’s worth the effort. Prommac has enjoyed excellent growth, and I ascribe a lot of that success to our company culture. Whenever we’ve spent real time and money on replenishing the Oros, we’ve seen the benefits of it directly afterwards.
“There have been times when we have made the tough decision to slow growth and focus on getting the culture right. Growth is great, of course, but it’s hard to get the culture right when new people are joining the company all the time and you’re scaling aggressively. So, we’ve slowed down at times, but we’ve almost always seen immediate benefits in terms of growth afterwards. We focus heavily on training that deals with things like the systems, processes and culture of the company. We’ve also created a culture and environment that you won’t necessarily associate with engineering and heavy industries. In fact, it has more in common with a Silicon Valley company like Google than your traditional engineering firm.
“Acquisitions can be particularly tricky when it comes to culture and vision. As mentioned, CG Holdings has acquired several companies over the last few years, and when it comes to acquisition, managing the culture is far trickier than it is with normal hiring. When you hire a new employee, you can educate them in the ways and culture of the business. When you acquire an entire company, you import not only a large number of new people, but also an existing organisation with its own culture and vision. Because of this, we’ve created a centralised hub that manages all training and other company activities pertaining to culture. We don’t allow the various companies to do their own thing. That helps to manage the culture as the company grows and expands, since it ensures that everyone’s on the same page.
“Systems and processes need to make sense. One of the key reasons that drove us to create a central platform for training is the belief that systems and processes need to make sense to employees. Everyone should understand the benefits of using a system. If they don’t understand a system or process, they will revert to what they did in the past, especially when you’re talking about an acquired company. You should expect employees to make use of the proper systems and processes, but they need to be properly trained in them first. A lot of companies have great systems, but they aren’t very good at actually implementing them, and the primary reason for this is a lack of training.
“Operations — getting the work done — is seen as the priority, and training is only done if and when a bit of extra time is available. We fell into that trap a year ago. We had enjoyed a lot of growth and momentum, so we didn’t slow down. Eventually, we could see that this huge push, and the consequent lack of focus on the core values of the business, were affecting operations. So, we had to put the hammer down and refocus on systems, processes and culture. Today Prommac is back at the top of it’s game having been awarded the prestigious Service Provider of the year for 2017 by Sasol for both their Secunda and Sasolburg chemical complexes.
“If you want to know about the state of your company’s culture, go outside the business. We realised that we needed to ‘pour more Oros into the company’ by asking clients. We use customer surveys to track our own performance and to make sure that the company is in a healthy state. It’s a great way to monitor your organisation, and there are trigger questions that can be asked, which will give you immediate insight into the state of the culture.
“It’s important, of course, to ask your employees about the state of the business and its culture as well, but you should also ask your customers. Your clients will quickly pick up if something is wrong. The fact of the matter is, internal things like culture can have a dramatic effect on the level of service offered to customers. That’s why it’s so important to spend time on these internal things — they have a direct impact on every aspect of the business.
“Remember that clients understand the value of training. There is always a tension between training and operational requirements, but don’t assume that your clients will automatically be annoyed because you’re sending employees on training. Be open and honest, explain to a client that an employee who regularly services the company will be going on training. Ultimately, the client benefits if you spend time and money on an employee that they regularly deal with.
“For the most part, they will understand and respect your decision. At times, there will be push back, both from clients and from your own managers, but you need to be firm. In the long term, training is win-win for everyone involved. Also, you don’t want a client to become overly dependent on a single employee from your company. What if that employee quits? Training offers a good opportunity to swop out employees, and to ensure that you have a group of individuals who can be assigned to a specific client. We rotate our people to make sure that no single person becomes a knowledge expert on a client’s facility, so when we need to pull someone out of the system for training, it’s not the end of the world.
“Managers will often be your biggest challenge when it comes to training. Early on, we hired a lot of young people we could train from scratch. As we grew and needed more expertise, we started hiring senior employees with experience. When it came to things like systems, processes and culture, we actually had far more issues with some of the senior people.
“Someone with significant experience approaches things with preconceived notions and beliefs, so it can be more difficult to get buy-in from them. Don’t assume that training is only for entry-level employees. You need to focus on your senior people and make sure that they see the value of what you are doing. It doesn’t matter how much Oros you add to the mix if managers keep diluting it.”
When Jason English purchased Prommac late in 2012, the company had a turnover of less than R50 million. This has grown nearly ten fold in just under five years. How? By focusing on people, culture and training.
Who’s Leading Your Business Billy Selekane Asks – You Or The Monkey On Your Back?
You’re either a change-maker, or someone who is influenced by the shifting conditions around you. The truly successful know how to determine their own destinies. Here’s how they do it.
- Player: Billy Selekane
- Company: Billy Selekane and Associates
- About: Billy Selekane is an author, internationally acclaimed inspirational keynote speaker, and a personal, team and organisational effectiveness specialist.
- Visit: billyselekanespeaks.com
We live in a world of disruption. We live in a world where Airbnb’s valuation is $31 billion, but the Hilton’s market cap is $30 billion. Airbnb doesn’t own one square kilometre, and yet they’re worth more than the world’s biggest hotel chains with enormous assets. We live in a world where things have been turned upside down.
In this brave new world, you can either thrive, or fight to survive. As a leader in your organisation, the choices you make, the mental mind-space you occupy and how you engage with those around you, will determine your personal success, as well as that of your entire organisation.
“The business of business is people. You can’t just pay lip service to the idea that they are your most important asset. You need to live it. Leaders must be intelligent and honest. You can’t just push people to meet the numbers,” says Billy Selekane, personal and business mastery expert and international speaker.
The problem is that great leaders need to first find balance within, before they can successfully lead their organisations.
“Things can no longer be done the same way,” says Billy. “Success today is defined by people who are driven, are inspired by their own lives and goals, and have the power and capability to inspire others.” But before you can achieve any of this, you need to rid yourself of the monkey on your back.
Related: Billy Selekane
The monkey on your back
“If I continue doing what I’m doing, and thinking what I’m thinking, I’ll continue to have what I have,” says Billy. “That’s the definition of insanity. Are you doing things by default or design?”
Billy’s analogy is a simple one. It’s something we can all relate to, and it’s the single biggest thing stopping us from clearing our minds, focusing on the positive and achieving success. He calls it the monkey on our backs.
“Every one of us is born with an invisible monkey on their shoulder,” says Billy. “Your monkey is always with you. Sometimes they’re the one speaking, and you need to be careful of that.” What you need to be even more aware of than your own monkey though, is everyone else’s monkeys.
“Every interaction we have is an opportunity for what I call a monkey download. You have an argument with your spouse before work, and you end up getting into your car with not only your monkey, but theirs as well. Your irritation level has doubled thanks to the extra monkey. Now you get irritated with a pointsman, another driver or a taxi on your way to work. You’ve just added three monkeys.
“By the time you walk into the office, you’re bringing an entire village of monkeys with you. They’re clamouring, clattering, arguing with each other, and the noise is deafening. Not only does everyone get out of your way, but you can’t hear yourself think. And the more your mood drops, the more monkeys you download from the people around you. This is not the path to focus, achieving your goals or being happy. It’s certainly not the path to great leadership.
“Great leaders know how to keep all those monkeys out. They know how to control their moods, and regulate their own positivity. They understand that they are the architects of their own success.”
Getting out of the monkey business
To be a great leader — and personally successful and happy — you need to start by getting out of your own way, and as Billy calls it, ‘getting out of the monkey business.’ You need to not only shake your own monkey, but everyone else’s as well.
According to Billy, there are four simple areas you can begin focusing on today that will help you become the person (and leader) you want to be.
First, honesty is the foundation of everything else you should be doing. “Be clear and straight. Speak to people simply and honestly, but with respect. Connect with them, not through the head, but with the heart. Don’t play tricks.”
Next, be authentic. All great leaders are authentic, and recognised as such. Aligned with this is integrity. “This is sadly out of stock, not only in South Africa, but the world,” says Billy.
“There is nothing as disturbing as a leader without integrity, and on a personal level, you won’t achieve emotional stability if you aren’t a person of integrity.”
Finally, you need to embrace love. “Wish your employees well. Wish your family, friends and connections well. When we are given love, and trusted to perform, we take that and pay it forward. In the case of business, this means your employees are giving the same love to customers, but if everyone showed a little more love, the world would be a better place. When people feel cared for, they show up with their hearts and wallets, and they pay it forward.
“Great leaders understand this. They don’t only focus on making themselves better, but adding to everyone around them. Remember this: In every business, there are no bad employees, just bad leaders. Employees are a reflection of that.”
If you want to build a better future, business or life, you need to start with yourself.
Stop letting negative thoughts and minor irritations derail you. You are the master of your moods and thoughts, so take personal responsibility for them.
Shark Tank Funded Start-up Native Decor’s Founder on Investment, Mentorship And Dreaming Big
Vusani Ravele secured offers from every single Shark in the first episode of Shark Tank South Africa, eventually settling on an offer from Gil Oved from The Creative Counsel. Entrepreneur asked to him how this investment has changed his business.
- Player: Vusani Ravele
- Company: Native Decor
- Established: February 2016
- Visit: nativedecor.co.za
- About: Native Decor creates visually pleasing products from sustainable timber. The company’s designs are innovative and functional, with its creations mostly inspired by South African cultures, landscapes and wildlife.
It all started with a cordless drill. In February 2015, Vusani Ravele received a drill from his girlfriend as a Valentine’s Day gift. He immediately became obsessed.
“I couldn’t stop drilling holes in things,” Vusani laughs. “I just loved working with my hands.”
Unlike most people, who lose interest in a Valentine’s Day gift by the first day of March, Vusani’s passion for his cordless drill didn’t dissipate. Instead, it had reignited a spark. Thanks to that cordless drill, he rediscovered a love for design he’d first felt in high school. And one year later, he had started a company called Native Decor.
As a start-up he then made the bold move to enter the inaugural season of Shark Tank South Africa. He was funded by Gil Oved on the very first episode. It was a life-changing experience, but Vusani is keeping a level head. The money helps, but he’s trying not to let it change his approach too much.
I’m doing my best not to think of Native Decor as a funded start-up. The money has allowed me to do certain things, like buy a new CNC machine, but I still try to think like a founder without money. Once you have a bit of money in the bank, the temptation exists to throw it at every problem, but that’s not how you create a successful business.
You need to bootstrap and pretend that you don’t have a cent in the bank. With a bit of lateral thinking, you can often come up with a solution that doesn’t require money. It might require more effort, sure, but I believe it creates a stronger foundation for your business. If a business can carry itself from early on, its odds for long-term success are much higher. You also need to fight the urge to spend money on things like fancy premises or extra staff. The longer you can keep things lean, the more runway you create for yourself.
I didn’t enter Shark Tank just for the money. The money was important, of course, but there was more to it than that. Looking purely at money versus equity, Gil Oved’s offer wasn’t the best, but I knew that I wanted to work with Gil. Stepping into the room, my primary aim was to attract him to the business.
He wanted 50% equity for R400 000 of investment. I wanted to give away 25% for the same amount. We settled on 40% for R400 000 with an additional R3 million line of credit. It was more of the company than I initially wanted to give away, but I was okay with it, since I saw it as the cost of Gil’s involvement, which I knew would add bigger value to the business than just the cash injection.
Investment comes in many forms. I wanted Gil to invest in the business because I realised that investment isn’t purely about money. I didn’t just want him to invest his cash in Native Decor, I also wanted him to invest his time and energy. You can get money in different places. You can create a business that funds its own growth, for example, or you can get a loan from a bank.
What an investor like Gil offers, however, is knowledge and access to a network. Money can help a lot with the growth of a business, but a great partner can help even more. By giving Gil 40% of the business, I’ve ensured that he has skin in game. He has a vested interest in seeing Native Decor succeed, and that’s worth more than any monetary investment.
True mentorship can be a game-changer if you’re running a young start-up. A great advantage that often comes with investment is mentorship from someone who knows the pitfalls of the entrepreneurial game. With a new business, it’s easy to be sidetracked or to chase an opportunity down a dead end.
Gil is visionary, and he has helped me focus on the long-term goals I have for Native Decor. He has also helped me to think big. As young entrepreneurs, I believe we often think too small. We don’t chase those audacious goals. Someone like Gil, who has seen huge success, can help you push things further and to dream bigger.
You need to dream big, but act small. It’s important to have big dreams for your business, but you should also chase those easy opportunities that can help you build traction. When I started, I wanted to try and get my products into large retail stores, but the fact of the matter was, as a start-up, I didn’t have a strong negotiating position.
There was a lot of bureaucracy to deal with. Gil advised me to focus on the ‘low-hanging fruit’ — those small gift stores that would be keen to carry my products. By doing this, I’m gaining traction and building a track record for the business. Also, I realised the importance of aligning myself with the right kind of stores. Perhaps being in a large retailer isn’t a good idea, since this is where you typically get cheap items produced overseas. Unless you’re purely competing on price, that’s probably not where you want to be.
Funding is great but it’s not all about the money. If that’s what you’re chasing you’re doing your start-up an injustice.
Watch the Shark Tank investment episode here:
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