- Player: Ian Fuhr
- Company: Sorbet
- Est: 2005
- Turnover: R500 million
- Visit: sorbet.co.za
Sorbet receives 40 franchise applications per week. Demand is so high that new locations are the biggest challenge for the ten-year-old business.
To cope with the ever-growing interest in the brand, from both consumers and prospective franchisees, new concepts have been launched, like Candi & Co, Sorbet Man, and Sorbet Dry Bars. It’s hard to imagine that just a few short years ago, Ian Fuhr and his business partner, Rudi Rudolph were unable to sell a single franchise.
“We call them the ‘dark days’,” says Fuhr, referring to the first four years of the business, when several attempts at franchising failed. “It forced us to continue to open company stores while we built that most elusive of traits: Credibility.”
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Both Fuhr and Rudolph were seasoned businessmen, and Fuhr had a number of successful businesses under his belt, most recently in retail. He certainly wasn’t new to entrepreneurship. He was new to the beauty industry though, and to franchising in particular.
“In hindsight, our slow start was the best thing that could have happened to us. It gave us time to build the credibility we needed to make the franchise model work, and to get the franchise portion of the business right.”
Here’s how two business stalwarts who were nearing retirement age, knew nothing about the beauty industry and even less about franchising, built one of South Africa’s favourite and fastest growing brands.
Getting the basics right
“From the beginning we knew we wanted to franchise,” says Fuhr. “People, personal wellness and hygiene are all things that require a personal touch to get right, one we knew an owner would do better than a manager, simply because they had more invested in the brand and the business.”
Fuhr was right. As soon as stores started being converted from company-owned to franchisee-run, turnover went up. But it was getting to the point where franchisees were willing to invest in the brand that was the challenge.
“We needed to build a brand that customers loved and create a real sense of brand loyalty; but, we needed a franchise model that worked for both the franchisees and us as the franchisor.” This simple ideal took four years to get right.
The ‘servant leadership’ model
In everything he’s ever done or pursued, Fuhr’s core focus has always been on people. With Sorbet, this became more important than ever before.
“The culture of our organisation has always been a focus on people and service rather than money. Once you get that right, the money comes. It seems so obvious, and yet often the focus on results persists and people get lost in the wash. The most important group of people in Sorbet are our staff. Without them, we can’t be successful. Our core value is ‘servant leadership’, which basically means always putting our customers first. But to do that, we need to put our staff first, and then they pay it forward.”
Here’s how servant leadership works. First, Fuhr personally conducts all induction training.
“My focus isn’t on what you do or how you do it, but rather why you do it. Our staff need to believe that we’re not selling treatments and products. We’re selling a feeling. People want to feel good about themselves, and that’s what we give them.”
A focus on people
“Treatments might be similar, but people are different. Each and every customer who walks through the door is an individual, and it’s our responsibility to make sure she leaves feeling good about herself.”
Fuhr is a firm believer that if you elevate an individual’s purpose and what they do beyond just making money, you add meaning to both their jobs and their lives.
“Our therapists and technicians are touching people’s lives and making a difference every day. This isn’t just a job; it’s a privilege and a calling. We can make a big difference in people’s lives on a daily basis.”
When asked how he motivates employees, Fuhr’s response is simple. “I don’t. I inspire them instead to be a part of something meaningful. Once you create a working environment where staff can motivate themselves, everyone is working towards the same goal.”
Of course, while a purpose is incredibly important, remuneration is too, and this is where Fuhr made a risky decision that has really paid off.
“We had two challenges. First, the industry average for staff turnover is high — 45% to 50% — and in our early years we were no exception. We were working to create real meaning amongst our employees, but we needed more if we wanted to bring this average down. Second, if we wanted to build the brand we envisaged, we needed great service that was bigger than an individual therapist or technician. We needed an outstanding customer experience, no matter which Sorbet you walked into or who treated you.”
This is a lot easier said than done. “The very nature of human beings means that 100% consistency in all things is impossible,” says Fuhr.
“We needed to try though, and we decided the best way to do that was to change from a basic salary model to a commission-based remuneration structure.”
The shift happened three years into the business, and it was not without its casualties. “Most of our staff were petrified by the idea. A large percentage left, although we knew these were individuals who would have left even if we’d made no changes.”
But many stayed on, nervous, but willing to see if there was an up-side. And there was.
“There was a period of adjustment, but it soon became clear that it was a win-win situation. Staff were now able to earn more, the stores earned more, and customers received better service. We saw an almost immediate lift in income and service.”
Promoting brand consistency
The idea is simple: Staff are well remunerated when they work hard. There is a minimum base, but real money lies in commissions. But here’s the real genius behind the remuneration structure: It promotes brand consistency.
“Our whole focus was to create loyalty — staff loyalty to the business, and customer loyalty to the brand. As a Sorbet employee, if you serve customers well and give excellent service, they’ll come back, and they do. There are only so many hours in a day, so what you really want is a fully-booked store. This means everyone isn’t working to build personal relationships with clients, but rather an attachment to the brand itself, so that all stores are full, at all times.”
In addition, all technicians are graded. There are five levels, and the higher the level, the higher the commission rate. This system encourages employees to train regularly, as the better they are, the more satisfied customers are.
It’s worked. People have become loyal to the brand, rather than individuals. “That was the turning point for us, and when we knew a franchise model would finally take off. We’d created a consistent experience across multiple stores. Now we had something franchisees could invest in.”
Sorbet can track this loyalty too. “Through our loyalty cards we know that thousands of our guests go to multiple stores.” Such a high level of brand consistency exists that each year Cape Town-based Sorbets are so overrun with holidaying Joburgers that they warn their own regulars to book well in advance to ensure they still manage to get a booking.
Getting franchisees on board
“I always wondered why there were no branded chains before we started,” says Fuhr, adding that this was one of the core reasons behind the Sorbet brand: He recognised a gap in a market dominated by independent practitioners.
“Once we launched Sorbet though, we quickly learnt that while we knew consistency across the chain is crucial, it’s also difficult to achieve.”
This learning curve was just one of the challenges Fuhr and Rudolph faced as they tried to create a franchise model. “You can’t have a chain without consistency. We had to get that right.”
But there were other challenges too. Attracting the right franchisees and building a revenue model that worked for both franchisees and the franchisor were top of that list.
“We wanted a high quality level of franchisee,” says Fuhr. “From the beginning we knew we’d rather teach business women the beauty industry than beauticians about business.” But how do you attract that kind of franchisee? You start with fans.
“Initially, we tried to sell franchises when we weren’t ready to do so,” admits Fuhr. “It was a complete waste of time. We had neither credibility nor a sustainable business model. We had to pull back and focus on these core foundations.”
People who care
And that’s when the magic happened. “Today, most of our franchisees start out as guests in our stores,” explains Fuhr. “They already love the brand and buy into the value, and now they want to be a part of the community.” To create that level of engaged franchisee, the brand needed to be strong first, which is why the franchising model ultimately took time to put in place.
The second big obstacle was integrity. “Franchisees need to know the franchise will make money,” says Fuhr, “and that takes time, a track record, and a culture of transparency.”
In addition, margins need to be big enough for both the franchisor and franchisee in order for the model to work. “In the early days, we struggled to generate franchisee interest. We were very concerned about sufficient margins for both parties, and so we came in a bit lower than normal.”
Sorbet didn’t (and still doesn’t) charge marketing fees. The 6,5% franchisor fee includes marketing. “To make this work, we decided that all product supplier rebates would come to Head Office, rather than each individual store and franchisee,” says Fuhr.
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“It’s how we recover what we lose on not having a marketing fund, but it’s essential that we’re completely transparent about this.”
Next level growth: Going global
After an admittedly rocky start, Sorbet has achieved exactly what Fuhr set out to do: It’s a national, consistent and trusted franchise brand that continues to grow in leaps and bounds. So what’s next? Locally, new brands have been added to meet demand, but the intrepid entrepreneur has also set his sights on the next growth frontier — an international market.
The big question was: Where to next? “Three years ago Dermalogica, one of our key product partners, held a conference in Cape Town, and I took the opportunity to catch up with the founders of the company. The first question I asked them was, ‘If you were to go somewhere else with our concept, where would you go?’ We had been thinking along the lines of Australia. Their instant answer was England. This hadn’t occurred to us, as I’d assumed it would be overly competitive. In fact, the reality is the exact opposite. Just like South Africa when we first started, the English market is highly fragmented, with no branded chains of any substance.”
Fuhr and Rudolph’s research quickly confirmed that Londoners are frustrated by the quality of the beauty treatments on offer, which tend to be cheap, often poor experiences.
“We have the formula for this. Get people used to the brand and build credibility and then roll out the franchises. It’s a long journey, but we’ve learnt this lesson — built credibility first, and in London we’re starting from scratch. The opportunity lies in standards. Increase standards, create brand consistency and credibility, and Sorbet will be a success.”
A new start-up
The venture might be a start-up, but it’s not starting from a zero base. There are 600 000 South Africans in London, most of whom are familiar with the brand.
In fact, only two stores have launched in London, and already there’s interest from prospective franchisees. In addition, Dermalogica is an international brand, and South African brand Environ is in more than 60 countries with a firm foothold in the UK, which means consumers are aware of Sorbet’s products.
In spite of this interest, Fuhr and Rudolph are taking things slow. “It’s a long, big investment from a rand base, and although we’ve started generating revenue in British Pounds, we’re expecting a long recovery,” says Fuhr, who is personally undertaking all induction training in London.
“It’s a new chapter, with new challenges, and we’re very excited about it,” he says.
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.
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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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