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Hirsch’s Homeware: Allan Hirsch

The story of how Allan Hirsch established the Hirsch’s Homeware Store brand and turned it into a multi-million rand business is one that every aspirant entrepreneur who has lost hope in the future should read. It’s not only a lesson in the importance of tenacity and passion but it provides a timely reminder of how going back to basics can be the most important thing you do for your business.

Juliet Pitman

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Allan Hirsch of Hirsch's Homestore

The story starts in the 1970’s with an electrical appliance apprentice who was as short of money as he was of confidence. After struggling through school with dyslexia, Hirsch eventually dropped out in standard seven and, after completing an apprenticeship started working in a company in Durban North repairing appliances. “There was another guy in the business who sold appliances and we kept bumping heads. He wanted to push the margins up while I thought we should charge reasonable rates in order to keep customers happy. Eventually he suggested I go on my own,” recalls Hirsch, “But I kept making excuses for why I couldn’t – I had just got married, we’d just bought our first property, then we’d just had our first child. I wanted to have my own business but I just didn’t have the confidence to do it, until eventually he gave me the push I needed.”

In 1979 with the grand total of R900 in his pocket (approximately R14 800 in today’s terms), Hirsch took the leap and opened his first electrical appliance repair store in Durban North. “I had to pay R300 in rent and a R300 electricity deposit upfront, and I spent R300 on marketing before we opened – so on day one I was absolutely flat broke,” he recalls. The business did repairs and sold electrical appliance spares and on its first day made 30 cents. “In those days brown bread cost 11 cents a loaf and it was enormously symbolic that I was able to buy bread on my way home with the money I’d made,” he says.

Though small, it was a sign of success to come. Today Hirsch’s employs 650 staff, sells in excess of 70 000 units a month, owns a sizeable share of the household appliance, LCD and Plasma market and during 2007, did a R700 million turnover. Not a bad return on R900. Hirsch’s philosophy of keeping customers happy started to pay off. “I had been doing work in the Durban North area for three years and had built up a bit of a customer base. They all knew I was moving and thankfully some of them moved with me, but that’s not to say that there weren’t many lessons I had to learn in those early days,” he recalls.

One of them was about timing. “In summer, being Durban, I noticed all these air conditioners leaking and rusting so I had what I thought was a great idea. During winter I sent out letters to a whole lot of people offering to service their air conditioners at a special rate, and I then followed the letters up with phone calls,” he says. The response was a deafening silence. “For 42 letters, I received not one piece of business and I went home and told my wife I’d made a terrible mistake and obviously didn’t know what I was doing. But come the first hot day of summer, I got 25 calls from those people. It taught me an important lesson about patience and timing. Things don’t always happen overnight in business,” relates Hirsch.When his competitors opened shops in the same area, Hirsch doggedly kept his head down and focused on his own business. “I’ll never forget loading a fridge outside my shop one Friday afternoon and seeing one of my competitors driving off with a boat behind his car, shouting as he went that he was off to the dam for the weekend. I couldn’t understand how he was able to do that and I wasn’t. But I’ll tell you something else – he wasn’t in business six months later and I was, so it’s all about focusing and working hard!” he smiles. One thing he didn’t have to learn was how to serve customers, and it was his early passion for this that inadvertently led to the expansion of the business into appliance sales. He’d tell customers if an appliance wasn’t worth repairing, and while this meant that he didn’t get the job in the short-term, his honesty built up long-term trust. “Customers would tell me what new appliance they were thinking of getting and I’d tell them what I thought of it and whether spares were still available for that model, and eventually they’d ask me if I could get them the appliance,” he explains.

But where others might have seen the opportunity to make a quick buck, Hirsch had other ideas. He’d buy the appliance from the same store that a customer could visit, deliver it to their house, install it and then (and here’s the kicker) charge them the same price that he’d paid for it. “Yes, it’s true that I didn’t make any money doing it but it still made good business sense. Because people got to know us for our service, and they started coming to us for appliances so the business was able to expand its offering,” he says, adding “It started slowly with the odd fridge or washing machine, but it was an important move.” In every business there is usually one identifiable tipping point, a moment when, looking back, the entrepreneur can point to one single thing that catalysed significant growth. For Hirsch’s this thing came in the unlikely form of a microwave. “I had put two microwaves in the shop and they just didn’t sell, which really got to bother me because I’ve always believed that you buy something, sell it and pay for it in 30 days. But I realised that I really didn’t know anything about microwaves and that I’d never sell them if I didn’t understand them, so I took them home,” Hirsch recalls. Thrilled at what he discovered about the versatility of the product, he and his wife arranged a product demonstration for one evening, inviting 15 couples to show them what the product could do. “We sold 12 microwaves that night,” Hirsch recalls.Word spread and Hirsch’s quickly became known as the microwave experts, status which eventually enabled them to open a microwave cookery school at their new premises in 1983, the first store which the business bought on auction with a bank loan. “The school never made money in its own right but it generated a huge amount of business for the store,” explains Hirsch. It was in that store that appliance sales really started to take off. The business had a good mix, offering services and repairs for the appliances they sold.


Further growth was on the way, with the second Hirsch’s store opening a year later in Central Durban. “And then came a very important lesson,” says Hirsch. Keen to move into Pietermaritzburg he purchased an existing business similar to Hirsch’s. At the time it seemed ideal, having both the location and the middle management structure that Hirsch’s, as a growing business, was keen to implement. “We thought it was a deal made in heaven but what we discovered is that the business we took over had a very different culture and philosophy to ours. We took over staff who were used to doing things differently to the way we did things and it was a real struggle. Eventually, after three years the managers’ restraints were up and they left to establish their own store,” he says. What did the experience teach him? “Not to buy other people’s businesses!” he replies. More than that, however, it highlighted how important culture was to Hirsch’s. It’s something to which Hirsch has an almost fanatical devotion: “People often ask me what the secret to success is and I tell them there’s no secret. You just have to focus on the basics, and customer service is a basic. It’s the philosophy on which the Hirsch culture was established. We have always tried to remember and implement the little things, like greeting a customer, smiling, walking them back to the till and carrying their parcels to the car. These aren’t insignificant things – they are the fundamentals on which success is built.”

He concedes that instilling this culture in staff is not an easy task, and one that’s made even more challenging as a business grows. “It’s something we experienced when we expanded out of KwaZulu-Natal into Gauteng, opening our first store in Fourways,” he says. Hirsch and his wife now commute regularly between the Durban head office and Gauteng. Their Gauteng home is, in fact, 12 steps down the passage from his office, above the Centurion store. “We learned that you just have to be here if you want to instil a particular culture in your staff. It doesn’t happen on its own – it’s something you have to actively manage and work on. Staff come from different businesses, each with their own unique culture, and you have to work at getting them to live out your culture,” he explains.

Leading by example and remaining hands-on are also essential to getting it right. Hirsch’s huge plate glass office window overlooks the shop floor and he takes every single call personally. “Although I have to be in the office a lot because I do all the buying, my door is never closed and customers can come up and see me any time they like. I’m also on the floor every Saturday and work all the trade shows myself (my son calls me The Mascot!),” he quips. Every store has the photographs and cell phone numbers of the managers and the Hirsches clearly displayed. “Each invoice has his wife and partner, Margaret Hirsch’s cell phone number at the bottom, prompting  customers to call her directly if they have a problem. We’d rather know about a problem immediately so we can deal with it and keep customers happy – that’s what it’s all about,” he adds.But while the Hirsches are hands-on and the business is still very much a family-run concern, they understand the need to hand over as well.

The move to Gauteng came at a time of dual growth in KwaZulu-Natal and necessitated the implementation of certain structures and systems. “We used to have head office – which is run pretty mean and lean – and then store managers but we now have a regional manager for Gauteng and KwaZulu-Natal as well and they each have a team that works with them,” says Hirsch, adding that the key to handing over is employing good people who he can trust. “There are also people who’ve been with us for years and I have no problem delegating things to people I am comfortable can manage them and have the best interests of the business at heart,” he says.

It’s a sound philosophy and one that will stand the company in good stead for the growth that Hirsch has planned for the future. “We’re opening in Modderfontein in the new Greenstone Mall, and are planning to move into Cape Town by 2010,” he says. The biggest challenge on his plate right now? “Changing people’s negative mind-set about the country. It’s a challenge for us all but I always tell the story of cows and rhinos. A cow will always choose the greenest grass and avoid terrain that’s difficult. A cow moves with the herd. But if you live in Africa you have to be rhino. You have to be really thick-skinned – you can’t let those negative arrows puncture you. And when you want to move ahead, you have to charge at your target. My advice to entrepreneurs? Focus on your goal – be a rhino.”

Breaking into new markets

The move to Gauteng proved particularly challenging for Hirsch’s. While the brand was well-known in KwaZulu Natal, most people in Gauteng had never heard of it. “Breaking into a new market was an enormous learning curve. Firstly, our advertising and marketing strategy had to change. In Durban we’d advertise in the big daily papers which would go out to all areas, but in Gauteng we realised that people like to shop in their specific area, so our marketing had to be far more focused and targeted,” says Hirsch, adding that the company also made extensive use of radio advertising.“I think that our presence at consumer exhibitions has also been hugely beneficial. We’ve always done it in KZN and continued to do it in Gauteng. People talk about what they’ve seen at shows and word gets around,” he says, adding, “It took about three of the big shows and all of a sudden people recognised the brand and knew where our store was.” Because Hirsch works the shows himself, future customers also get to meet the man behind the brand, which goes a long way to helping establish the human family-feel that characterises the company.

Back to sales basics – Allan Hirsch’s sales principles

You don’t get a second chance to make a first impression – when you greet a customer, smile and introduce yourself with confidence.

Sales is about listening – ask questions and listen to the answers a customer gives you. They’ll tell you what they want and if they don’t know, the right kinds of questions will help them decide. Product knowledge is absolutely essential – every morning our sales people get briefed on any new products or price changes and they are expected to take notes. Motivate your sales force – people are motivated by the success and advice of their colleagues so we ask one person to give a short motivational talk every morning.

Juliet Pitman is a features writer at Entrepreneur Magazine.

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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.

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  • 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.

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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

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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

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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.

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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

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