- Player: Glenn van Eck
- Company: Magnetic Storm
- What they do: Magnetic Storm is a multi-faceted audio-visual and events company. Having started in equipment hiring, the company now specialises in hire, sale and installation of sound, lighting and audio-visual equipment, as well as event management services.
- Established: 1981
- Visit: magnetic.co.za
Magnetic Storm started as a mobile disco in Port Elizabeth — a simple operation that spiced up weddings and birthdays.
“My brother started it,” says company CEO Glenn van Eck. “I worked for him as a 16-year-old, and he left the business in my care when he got called up for service. I ran it for eight months, which was my first taste of managing a business.”
The business grew to four units that could host four discos at the same time, and in 1995, Van Eck purchased it from his brother. Since then he has turned his mobile disco operation into a big player in the events space. Here’s what he learnt along the way.
1. Tap into every market possible
“I realised fairly quickly that we needed to branch out. In order to grow the business, we needed to start looking at other business opportunities. Specifically, we decided to go after corporate gigs, but we also started looking at events like fashion shows, mall promos and competitions,” says Van Eck.
Lesson: It’s worth asking yourself: What markets are out there that I’m not tapping into? Based in Port Elizabeth, Magnetic Storm’s total market was always going to be limited. So growth required expansion into other areas. Corporate gigs made sense, and they offered the added benefit that they wouldn’t often overlap with party gigs.
2. Expand you product/service offering
“As the company has grown, we’ve taken on other elements of event management to the point where we are often in charge of every aspect of an event. This kind of diversification is important if you want to grow, especially in a smaller market.”
Lesson: Diversification can be tricky. You want to increase revenue streams but not lose focus. The goal is to diversify within an area that you’re comfortable with. Magnetic Storm has diversified within industries it knows well.
3. Have the courage to think big
“It’s easy to believe that growth will be impossible. It’s not. You just need the courage to think big enough.”
Lesson: Growth happens when you make it happen. Magnetic Storm, which started as a mobile disco, has now been responsible for the hosting of a 2010 Soccer World Cup Fan Fest, and numerous international music concerts — even opening a Cape Town office to establish a larger footprint. This was accomplished with a growth mind-set, looking at ways the company can grow and diversify.
4. Become a trusted advisor
“Growth is about repeat business. You want your client to need your help — to rely on it. Constantly look at the challenges your clients face, as opposed to your challenges. To be successful, you need to help. You are there to provide a solution, to make a client’s life as simple as possible.”
Lesson: You want to grow with your clients. You don’t want to be forced into a ‘procurement’ relationship, where every decision is based purely on price. To do this, you want to become a trusted advisor to clients — to offer the sort of advice and service that they can’t work without. According to Van Eck, this happens when you do everything to ensure a client’s success.
5. Leverage your strengths
“What sets us apart is what we call experiential intelligence. We have done this for 35 years. Being around a long time is a great advantage. We can accurately assess needs and find out what will work best for a specific client. You can take anyone off the street and call him or her a technician. And, if nothing goes wrong, that’s fine. But what if something does go wrong? A client is paying for a great experience. The event needs to be seamless for them, no matter what’s happening behind the scenes.”
Lesson: You lose certain advantages as your company grows. You might, for example not be as agile or cheap as some of your smaller competitors, but you do have other advantages. You have experience and a proven track record, and these can be worth a lot, provided you leverage them correctly.
6. If you’re not growing, you’re going backwards
“You need to keep abreast of recent trends and innovation, and you need to follow customers. Even if you’re just growing in knowledge, you have to keep growing.”
Lesson: Growing isn’t a goal that can be accomplished and ticked off a to-do list — it is an ongoing process. Also, growth isn’t just about the bottom line. It’s about knowledge and experience. If you don’t move forward, you’ll quickly find yourself becoming obsolete.
7. You need to take a leap of faith
“When growing, there will be scary moments. You need to take those considered risks because you’ve got to create the capacity before you can do the work.”
Lesson: Growth is often risky because it requires spending ahead of revenue. Only once you’ve spent a considerable amount of money can you start turning a profit. This means that every decision must be carefully considered, but will remain inherently risky. It’s about controlling risk and keeping it as small as possible.
8. Make yourself unnecessary
“You need to accept that you are not the company. If you want to grow, let go of some control. Step back and let others take on more responsibility.”
Lesson: It’s impossible to grow a company if you try to micromanage everything. Growth can only happen if you hire people you can trust and empower them to run with things.
Growth starts with a change in mind-set – a determination to take a company to the next level.
Rich List: 2019 Richest People In The World
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10. Jeff Bezos
Net Worth: USD 139,5 billion
Jeff Bezos founded e-commerce giant Amazon in a garage in Seattle, USA in 1994. He also purchased The Washington Post for $250 million in 2013.
Bezos believes in always taking a long-term view and living in the present moment.
“I think this is something about which there’s a lot of controversy. A lot of people — and I’m just not one of them — believe that you should live for the now.
I think what you do is think about the great expanse of time ahead of you and try to make sure that you’re planning for that in a way that’s going to leave you ultimately satisfied. This is the way it works for me. There are a lot of paths to satisfaction and you need to find one that works for you.”
7 Self-Made Teenager Millionaire Entrepreneurs
These teenager entrepreneurs have already made their first million and more. How did they do it and what’s their secret to success?
1. Evan of YouTube
Evan and his father Jarod started a youtube channel ‘Evantube’ to review kids’ toys. The channel was a resounding success with other kids – so much so that today it boasts just over 6 million subscribers.
Evantube brings in more than USD1.4 million a year from ad revenue generated on the channel.
How did it start? With a father-son fun project making Angry Birds Stop Animation videos, and morphed into doing reviews on toys and video games. But Jarod’s dad is aware of the responsibility of Evan’s sudden fame and hopes to teach Evan about the importance of being a good role model for others.
“Most recently, we had the opportunity to work with the Make-a-Wish Foundation, and were able to fulfill the wish of a young boy whose dream was to meet Evan and make a video with him at Legoland,” explains Jared. “It was a really incredible experience. YouTube has definitely opened many doors, and the kids have gotten to do some pretty amazing things.”
Expert Advice From Property Point On Taking Your Start-Up To The Next Level
Through Property Point, Shawn Theunissen and Desigan Chetty have worked with more than 170 businesses to help them scale. Here’s what your start-up should be focusing on, based on what they’ve learnt.
- Players: Shawn Theunissen and Desigan Chetty
- Company: Property Point
- What they do: Property Point is an enterprise development initiative created by Growthpoint Properties, and is dedicated to unlocking opportunities for SMEs operating in South Africa’s property sector.
- Launched: 2008
- Visit: propertypoint.org.za
Through Property Point, Shawn Theunissen and his team have spent ten years learning what makes entrepreneurs tick and what small business owners need to implement to become medium and large business owners. In that time, over 170 businesses have moved through the programme.
While Property Point is an enterprise development (ED) initiative, the lessons are universal. If you want to take your start-up to the next level, this is a good place to start.
Risk, reputation and relationships
“We believe that everything in business comes down to the 3Rs: Risk, Reputation and Relationships. If you understand these three factors and how they influence your business and its growth, your chances of success will increase exponentially,” says Shawn Theunissen, Executive Corporate Social Responsibility at Growthpoint Properties and founder of Property Point.
So, how do the 3Rs work, and what should business owners be doing based on them?
Risk: We can all agree that there will always be risks in business. It’s how you approach and mitigate those risks that counts, which means you first need to recognise and accept them.
“We always straddle the line between hardcore business fundamentals and the relational elements and people components of doing business,” says Shawn. “For example, one of the risks that everyone faces in South Africa is that we all make decisions based on unconscious biases. As a business owner, we need to recognise how this affects potential customers, employees, stakeholders and even ourselves as entrepreneurs.”
Reputation: Because Property Point is an ED initiative, its 170 alumni are black business owners, and so this is an area of bias that they focus on, but the rule holds true for all biases. “In the context of South Africa, small black businesses are seen as higher risk. To overcome this, black-owned businesses should focus on the reputational component of their companies. What’s the track record of the business?”
A business owner who approaches deals in this way can focus on building the value proposition of the business, outlining the capacity and capabilities of the business and its core team to deliver how the business is run, and specific service offerings.
“From a business development perspective, if you can provide a good track record, it diminishes the customer’s unconscious bias,” says Shawn. “Now the entrepreneur isn’t just being judged through one lens, but rather based on what they have done and delivered.”
Relationship: “We believe that fundamentally people do business with people,” says Shawn. “There needs to be culture match and fluency in terms of relations to make the job easier. As a general rule, the ease of doing business increases if there is a culture match.”
This relates to understanding what your client needs, how they want to do business, their user experience and customer experience. “We like to call it sharpening the pencil,” says Desigan Chetty, Property Point’s Head of Operations.
“In terms of value proposition, does your service offering focus on solving the client’s needs? Is there a culture match between you and your client? And if you realise there isn’t, can you walk away, or do you continue to focus time and energy on the wrong type of service offering to the wrong client? This isn’t learnt over- night. It takes time and small but constant adjustments to the direction you’re taking.”
In fact, Desigan advises walking away from the wrong business so that you can focus on your core competencies. “If you reach a space where you work well with a client and you’ve stuck to your core competencies, business is just going to be easier. It becomes easier for you to deliver. Sometimes entrepreneurs stretch themselves to try to provide a service to a client that’s not serving either of their needs. This strategy will never lead to growth — at least not sustainable growth.”
Instead, Desigan recommends choosing an entry point through a specific offering based on an explicit need. “Too often we see entrepreneurs whose offerings are so broad that they don’t focus,” he says. “Instead, understand what your client’s need is and address that need, even if it means that it’s only one out of your five offerings. Your likelihood of success if you go where the need is, is much higher.
“Once you get in, prove yourself through service delivery. It’s a lot easier to on-sell and cross sell once you have a foot in the door. You’re now building a relationship, learning the internal culture, how things work, what processes are followed and so on — the client’s landscape is easier to navigate. The challenge is to get in. Once you’re in, you can entrench yourself.”
Desigan and Shawn agree that this is one of the reasons why suppliers to large corporates become so entrenched. “Once you’re in, you can capitalise from other needs that may have emanated from your entry point and unlock opportunities,” says Shawn.
Building a sustainable start-up
While all start-ups are different, there are challenges most entrepreneurs share and key areas they should focus on.
Shawn and Desigan share the top five areas you should focus on.
1. Align and partner with the right people
This includes your staff, stakeholders, partners, suppliers and clients. Partnerships are the best thing to take you forward. The key is to collaborate and partner with the right people based on an alignment of objectives and culture. It’s when you don’t tick all the boxes that things don’t work out.
2. Make sure you get the basics right
Never neglect business fundamentals. Do you have the processes and systems in place to scale the business?
3. Understand your value proposition
Are you on a journey with your clients? Is your value proposition aligned to the need you’re trying to solve for your clients? Are you looking ahead of the curve — what’s the problem, what are your clients saying and are you being proactive in leveraging that relationship?
4. Unpack your value chain
If you want to diversify, understand your value chain. What is it, where are the opportunities both horizontally and vertically within your client base, and what other solutions can you offer based on your areas of expertise?
8. Don’t ignore technology
Be aware of what’s happening in the tech space and where you can use it to enable your business. Tech impacts everything, even more traditional industries. Businesses that embrace technology work smarter, faster and often at a lower cost base.
Ultimately, Desigan and Shawn believe that success often just comes down to attitude. “We have one entrepreneur in our programme who applied twice,” says Shawn. “When he was rejected, he listened to the feedback we gave him and instead of thinking we were wrong, went away, made changes and came back. He was willing to learn and open himself up to different ways of approaching things. That business has grown from R300 000 per annum to R20 million since joining us.
“Too many business owners aren’t willing to evaluate and adjust how they do things. It’s those who want to learn and embrace change and growth that excel.”
Networking, collaborating and mentoring
Property Point holds regular networking sessions called Entrepreneurship To The Point. They are open to the public and have two core aims. First, to provide entrepreneurs access to top speakers and entrepreneurs, and second, to give like-minded business owners an opportunity to network and possibly even collaborate.
“We believe in the power of collaboration and networking,” says Desigan.
“Most of our alumni become mentors themselves to new entrants to the programme. They want to share what they have learnt with other entrepreneurs, but they also know that they can learn from newer and younger entrepreneurs. The business landscape is always changing. Insights can come from anywhere and everywhere.”
The To The Point sessions are designed to help business owners widen their network, whether they are Property Point entrepreneurs or not.
To find out more, visit www.ettp.co.za
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