How do you turn a medium-sized business into a powerhouse?
These companies have taken things to the next level, and the entrepreneurs involved describe how they managed to grow their companies to eight figures… and beyond.
Successful businesses need to be trading — money in and money out
- The player: Albe Geldenhuys
- The company: USN (Ultimate Sports Nutrition)
- Turnover: R1 billion
- Launched: 1999
- Visit: www.USN.co.za
“Initially, I had my finger on everything: Stock, our warehouse twice a day, finance. I even stuck labels on bottles if I had to. But as we grew, our team had to grow,” explains Geldenhuys.
“At first this meant sales people, but soon I needed to pull people into other roles as well, create a management structure and eventually even hire a CEO.”
And then the entrepreneur had a major wake-up call. In 2010, based on USN’s market presence and massive sales figures, investment firm PSG approached Geldenhuys with an offer to purchase. While he had no intention of selling, Geldenhuys did invite PSG to conduct an audit and evaluation. The results were devastating.
“They discovered R12 million in stock losses. At the time, our turnover was R300 million, with a projected profit of R28 million, which I was already unhappy about — where had our great margins gone? Then PSG came along and said, sorry, you’ve actually lost R12 million in stock, and you’re making no profit.”
“I realised how badly I’d taken my eye off the ball. We had employed managers from big corporate backgrounds, but they didn’t run a tight, lean ship. They weren’t focused on margins and efficiencies. For example, we had started out with service levels of 95%, which meant that 95% of our stock reached the shelves where they were meant to go. Under the helm of a new logistics manager, this had dropped to 72%, which I was told was standard. I don’t believe that’s good enough.”
Instead, Geldenhuys took the business back to basics. “We’re not a logistics company. We never will be. We need to focus on what we’re good at, and outsource the areas that we’re clearly not good at. Today, we focus on developing products and marketing. As soon as we went back to our roots, we started making more money and more profits.”
A great business is the result of great people working together
- The players: Sam and Rob Paddock
- The company: GetSmarter
- Turnover: R128 million
- Launched: 2008
- Visit: www.getsmarter.co.za
According to brothers Sam and Rob Paddock, the two biggest lessons they’ve learnt while building their business are people-related. “The first is that if you want buy-in from your staff, you need to be communicating with them all the time. Everyone needs to understand and embrace the business’s strategy. The second is that performance management, particularly in a growing company, keeps everyone focused,” says Sam.
“It took us a while to realise that some employees can’t be coached into better performing team members. You need to be honest and clear up-front. If you’re not clear on good performance or bad, how can you expect your team to know what your expectations are?”
And then the brothers received invaluable advice: They were told to read Mastering the Rockefeller Habits, by Verne Harnish, and to implement the learnings from the book. “Implementing the Gazelles system was a complete game-changer for us,” says Sam.
Gazelles follows a clear and regulated path. “First, you need to clarify the performance expectations of each and every role in the company. The performance criteria follows a 90-day cycle and includes five priorities.
“These priorities are evaluated every three months according to competence and alignment to the company’s six core values. Because the priorities are in black and white and agreed on up-front, managers can have honest discussions with their team members and credible reviews. Each review is rated on competence and attitude.”
Understand the power of disruptive thinking
- The player: Steven Kark
- The company: Paycorp
- Turnover: R1,2 billion
- Launched: 1999
- Visit: paycorp.co.za
If you want to make a mark in an established industry, you have to be willing to disrupt the market — and fail a few times in the process. This is how Steven Kark approached his start-up, and how he continues to look at his R1-billion business.
“I’ve always called it ‘changing the game,” says Kark. “In every market there are incumbents who aren’t adequately prepared to service the new market that innovative disruptors create. That’s why we were able to launch and capture market share with our ATMs — we focused on under-serviced areas and customers. Because the incumbents can’t adapt their business models quickly enough, the new guys on the block move up, compete in the existing market share and create new ones as they go.”
The problem is that disruptive innovators who do their jobs properly end up becoming incumbents themselves — which just opens them up to becoming casualties of disruptive innovation in turn.
“This is such an important point for sustainable businesses today – first, how to get there, and then, how to stay there,” says Kark. “We’re a non-traditional company in a traditional banking environment. We started out life and built a business by being disruptors. But you need to be careful, because you don’t want a new disruptor to catch you.
“A lot of businesses run into problems because they can’t scale. For example, running one fish and chip shop is very different to running ten. With ten there’s ten times the complexity. But 1 000 stores isn’t 100 times as complex. It’s a million times more complicated. Scale and complexities are exponential. You need to invest in people and the right technology to deal with this. Part of building and maintaining a sustainable business is having the right infrastructure to do so. And then of course you need to stay flexible and keep a close eye on the market.”
Related: Paycorp’s R1.2 Billion Success Story
Colleagues first; everything and everyone comes after
- The players: Gil Oved and Ran Neu-Ner
- The company: The Creative Counsel
- Turnover: R700+ million
- Launched: 2001
- Visit: www.creativecounsel.co.za
While this is one of The Creative Counsel’s six core pillars, it’s not something that came to founders Ran Neu-Ner and Gil Oved naturally. “Clients come first, that had always been our motto. So much so that in our start-up days Gil was called our ‘doctor on call’. It didn’t matter what he was doing, if his phone rang he’d answer the call and see to the client. Nothing was more important,” says Neu-Ner.
“As we grew though, we realised that it wasn’t just the two of us anymore, and you can’t deliver to clients without a happy family. That’s why this pillar is so important,” adds Oved.
“If you walk out of a meeting and have two calls, and one’s a client and the other’s a colleague, your first instinct is to call the client first. That’s the wrong response. You don’t know why your colleague is calling. It could be to warn you about something related to the client. It could be because they have three clients waiting on an answer or input only you can provide. Family must come first.”
“It’s also important for everyone on the team to know that their managers, colleagues and Gil and I have their back,” adds Neu-Ner. “Once you know that you’re supported, you’re more likely to make key decisions on your feet, and those are generally the decisions that drive the business forward.
“Of course we try not to lose clients, but the reality is that there’s no real client loyalty. It’s the nature of the industry. You’re always pitching for your next campaign, and the client will choose what’s right for them, not for you. But your team should be here to stay, so care about them and look after them.”
Focus on what you know best and understand your market
- The players: Irfan Pardesi and Hina Kassam
- The company: ACM Gold
- Turnover: R400 million+
- Launched: 2005
- Visit: www.acmgold.com
Irfan Pardesi has built ACM Gold based on two core principles: First, the best businesses aren’t masters of everything — they’re specialists in one key area, and invaluable to their clients as a result. Second, localisation is everything. You can be a big, multi-national company, but always take your current, on-the-ground clients into account. Design your business offering with their needs in mind. And remember that what works in one market won’t necessarily work in another.
Pardesi and his sister and business partner, Hina Kassam, learnt the trading environment in London, launched in Pakistan, and then moved the business to South Africa. These are three very different markets, with different consumer needs.
“I think one of the single biggest lessons I’ve learnt in business, and one we’ve carried through to every decision we’ve made since, is the importance and power of localisation,” says Pardesi. “Entrepreneurs are problem- solvers. That’s what we do. But that doesn’t mean much if you’re trying to solve a problem that’s not your target market’s main concern.”
The key to this shift is not trying to change the social behaviour of clients; instead, you must adjust your offering to suit their behaviour.
Next Article: The 10 Strangest Secrets About Millionaires
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.
- 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.”
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.”
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.”
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.
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.
- 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.
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.
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
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.
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.”
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.
Lichaba Creations Founder Max Lichaba’s Inspiring Journey To Entrepreneurial Success
Max Lichaba finished school with a Grade 10 and no prospects, except for a burning desire to do more with his life than become a miner like all the other men in his community. This is the story of how he started a jewellery business, lost everything, and painstakingly built it up from scratch again.
- Player: Max Lichaba
- CSI Projects: Lichaba Foundation and Lichaba Legacy
- Turnover: Lichaba Creations: R120 million
- Visit: lichaba.co.za
I grew up living in the garage of a friend’s house in the small town of Virginia outside Welkom. My dad lived on the mines, my mom had five kids and nowhere to live, and he gave us a roof over our heads. It was a mining town, and I was expected to become a miner. But, my mom wanted us to have an education. She never blamed anyone for our situation — she just tried to make a plan. School was one of those plans. But, it needed to be a school close to home, and free — or as close to free as possible. That left only one option: A remedial school in Virginia.
Looking back, it had its pros and cons. I got to work a lot with my hands, and discovered I was really good at it. But the school ended at Grade 10, which meant I would never matriculate, and my maths and language literacy skills weren’t great by the time I left. I was never challenged, and an unchallenged mind doesn’t grow.
I’ve only recently completed some financial literacy courses so that I can run my books and understand my numbers. I’d left that to my accountants, and learnt it’s unwise — you have to be on top of your numbers. I didn’t have these skills from my youth, so I needed to go out and get them, ten years after starting my own business. But, if you’re serious about growth, it’s never too late.
By the late 1990s I was 16, helping my mom sell fruit and vegetables on the side of the road, and my school career was over — but then another opportunity presented itself. Harmony Gold owned the mines in our area and had developed the Harmony Gold Jewellery School to upskill the local community.
I wasn’t satisfied with my Grade 10 qualification. I didn’t want to be a miner, and I wanted more than selling fruit and veg on the side of the road. I knew I was good with my hands, and I saw the jewellery school as an opportunity.
Related: How To Build A Disruptive Attitude
I applied late, but that didn’t stop me. Every day I went to the school, and sat in the waiting room, determined to secure a spot if one opened up. There was one student who hadn’t pitched at the start. I pestered the registrations office to let me take her spot. I was relentless. One day I received the call: “Fine, the place is yours. When can you start?” I replied that I was on my way.
Everyone at the school had completed matric. I was the youngest person in the room with the lowest qualification — but I was good with my hands and hungry for success. Six months later I was one of the best in the class. I spent all my time there, practising and getting better and better at my new craft. I realised that I wanted to make beautiful things I could sell — I was already thinking about a small business.
As we were finishing our course, a local jewellery manufacturer, Regal Manufacturing came to the school and asked for two of their best students. I was chosen, which secured my first job in the sector. The company manufactured jewellery and exported it to South America. With 3 000 employees, it was a major employer in our community, predominantly of women. After nine months, I had the down-payment for my first car, and had just moved into my first flat, when we arrived at work to closed gates. Overnight, and with no warning, the company had closed down. We were all given a letter, stating that we would receive our salaries at the end of the week, and that the business had been liquidated.
Finding a light
The women around me — many of whom were the sole breadwinners in their households — were kneeling and wailing in shock. I was also in shock, coupled with a good healthy dose of anger. And then I started thinking. I had no dependants. No children relying on me to be fed. I was 19 and I’d find a job. But what about these women? I couldn’t help everyone, but there were four gogos I knew. In my community, gogos are the backbone of everything. I didn’t hesitate, I just said to them, let’s start something together. Let’s meet at my house tomorrow. We can make this work.
Here’s the problem. A machine costs between R50 000 and R100 000. We didn’t even have R5 000. We needed to start small. Putting our heads together, we realised that the simplest thing — and one we could afford — was beads. We needed to start bringing in cash, and this was the fastest, simplest way.
Between us we collected R1 000 to buy beads and start working from my flat. The local Nigerian market loved them, and then we had a stroke of inspiration — we approached church choirs, offering to make each member a unique set of beads that they could wear at competitions. This became a steady source of income.
We spent 18 months focusing on beads, and then I started looking at our growth opportunities. The business was very hand to mouth — we used our cash to buy more materials. There wasn’t room for expansion, and after a year and a half I wasn’t any closer to buying machines. So, what could we do?
After researching SME support programmes, I found SAB’s Kickstarter competition and we entered. We won in our region, and with the R20 000 prize money were able to buy small machines. We didn’t have an innovative business, but we were operational. I believe that gave SAB faith in our business.
Start small, but start — that’s the key. I could have gone out and tried to figure out how to raise R100 000 for fancy machines. I didn’t do that. Instead, I focused on trading — bringing in cash to feed and support us.
The equipment took us to the next level, and I was able to look for our next opportunity, which was a programme run between the Free State Department of Tourism and the Dti that helped local manufacturers market their products overseas. There were many forms to fill in and our capacity to deliver if orders came in was checked, but eventually we were approved for the programme.
We were still in my flat, and we needed more space — but we couldn’t afford rent. We found a tiny shop and convinced the landlord to let us move in, if we agreed to start paying R500 per month as soon as we could. Always ask — you never know what the answer will be. If you’re polite and friendly, people often want to help you — or at least give you the benefit of the doubt.
When everything goes wrong
While we were gearing up for our first foray into global markets, I concentrated on local growth — and that meant Joburg. I didn’t have a car, and couldn’t afford transport, so I hitched rides, wearing a suit and tie. I had a jewellery business and needed to look the part. I made sure I was always the smartest looking guy in the room. If you take yourself seriously and project where you want to be, others will take you seriously too.
I really struggled to get our jewellery into local stores, but we finished the dti’s six-month programme and were considered export-ready.
Step one was making the products. The African element was popular, so we focused on that. Our choir market had grown, and we were able to use the cash to manufacture more products for export from those sales. Our first trip was to Nairobi and we received immediate orders. Our second was to London, and we realised we were onto something.
The Dti gave us an incredible opportunity. They work on turnovers, and move you into different regions based on your level. We worked with them until 2015, and gained a foundation for growth. They also helped us build up our cash reserves.
At the time, we were exporting our jewellery successfully, we’d won Kickstarter and had deployed those funds into the business. But, I was looking for more. Success makes you feel invincible, and my experiences with the Dti had been positive. Then I found another opportunity: We could open a school, similar to the one Harmony had run, and give youth the opportunity I’d received. The Dti funds initiatives like this, which meant we could give back to our youth, with government support.
I achieved the NQF accreditations I needed, and set up the school at a cost of R900 000. We were told we’d be paid within 60 to 90 days of each student enrolling, and we took the plunge.
But harsh reality stepped in. I took my eye off Lichaba Creations to concentrate on the school at a time when we’d moved into new, bigger premises to handle our increased international orders. The first payments came through 12 months later than expected. Lichaba Creations was effectively carrying the school, and the result was that we couldn’t pay rent for the jewellery business.
After two months our landlord told us he was locking our doors. I begged him for more time, promising I’d pay him soon. I kept hoping the Dti payments would come through, but they didn’t. I was in Joburg trying to get paid when I received a call from someone I thought was my friend — he was laughing. Our doors had been locked and all my equipment was being auctioned off. I raced back to Welkom but couldn’t stop it. I owed R30 000 and couldn’t pay it. I watched my machines get sold for R300, and I couldn’t even afford to buy them myself.
At the same time, I realised that as I’d built the business, I’d paid less attention to family, and more to friends — and I was learning that they weren’t very good friends. They’d laughed at my fate and told me that they hadn’t expected my good fortune to last. I realised I was surrounded by people who didn’t truly care about me, or believe in me, and some were even satisfied at my loss. It was time for change.
One of the toughest things you’ll ever do
Starting over is one of the hardest things in life. I had nothing, and worse, I’d failed the people I had wanted to protect. They were all jobless, my old ladies and my new staff. The younger staff who hadn’t been with me at the beginning were particularly angry and wanted their salaries. I was devastated.
The one light at the end of my tunnel was the support of my brothers, who came back to Welkom from Joburg to help me. It was a stark and humbling reminder of the value of family. I’d been open and shared my story, asking my friends for assistance. They all said no. I realised these were just ordinary people, and I’d put too much faith in them. My brothers were the opposite. They each took out a R3 000 loan that they couldn’t afford to help me pay my staff and settle some debt. And they did it in faith, believing I would make a plan to pay them back. I would never neglect my family again.
I needed to get back on my feet, and I no longer had a business, or the school. I started by reaching out to my old school — could I teach there? For six months, that’s what I did. I taught and saved every cent I could. I sold most of my furniture, and slept on a mattress on the floor. When I had enough cash in the bank, I started visiting all the pawn shops in Welkom. I knew my equipment was specialised, and I had a feeling that the people who had bought it wouldn’t be able to use it. I was right — I started to find my machines at different pawn shops. Piece by piece, I bought them back.
It took eight months, but I was able to get back up and running — at a very small scale. I worked from my flat, exporting to India and the UK. I was totally focused. I vowed I would never lose sight of my core business again, even if I pursued other ventures.
I finally got the cash I was owed for the school, and paid my gogos’ retirement packages. I then made my second biggest mistake. No matter what we did, we couldn’t get into retail stores in South Africa. There isn’t enough of a funnel for gold jewellery in the local market. But, we didn’t want to admit defeat, and so we opened our own stores in a Pick n Pay centre in Welkom, in Randburg, and in Orange Grove. The money we made overseas went into these black holes — and we did it for three years. Having a personality that won’t admit defeat has its pros and cons. It’s kept me going in the face of enormous adversity, but it’s also sustained me when I should have admitted defeat and moved on. We spent too much on stores for limited returns. Maybe it was because I didn’t want to admit a second defeat so soon after the failure of the school. Whatever it was, I held on too long.
But, you live and you learn. Sometimes you just have to cut your losses and move on.
Starting over and pursuing passions
I wasn’t done trying new things though. I’ve always loved cars. When I was at school, we learnt to fix cars. I’d had this idea for a while: A luxury car wash where you could sit comfortably and eat chesa nyama and drink a beer while you waited. I thought the combination would attract more people. At that stage, we’d closed down two of our Lichaba Creations stores and only had one still operational. I bought a plot on Vilakazi Street in Soweto and started building my dream, brick by brick. It’s a big building, and it took my whole family a year to finish. It was funded through the jewellery business, so we built on and off, depending on cash flow.
I wanted to launch in December, so towards the end of 2013 we all put our backs into getting it finished. My brothers travelled from their homes in Vereeniging every day, and together we got it ready. We opened on 16 December and haven’t looked back.
Kwa Lichaba gives us incredible returns. We chose to charge an entrance fee to attract a specific clientele. It was trial and error at the beginning, but slowly we’ve shaped one of the go-to venues in Soweto, with a vibrant, loyal clientele.
We realised we had something worth more than gold: Access to a captive, middle to upper-middle class black market. It took us a year to get traction with the concept, but we now host corporate-sponsored functions throughout the year, giving brands access to our clientele. It’s an incredible model, and one we replicated in Lesotho — my grandmother’s place of birth — in 2016, and this time we didn’t lay a brick ourselves.
Lichaba Custom Rides, a car customisation and sound business, followed, reflecting my passion for cars. We also opened a refinery to recycle precious metals ourselves, so that we can supply the gold we need for Lichaba Creations, which continues to do very well overseas.
I’m in a good place. I know that life — and business — have their ups and downs, and I have no doubt there are more lessons to learn on this journey. As long as I apply those lessons and keep picking myself up, I will always have something to show for my hard work, and a legacy to leave for my children and the people I love.
Know your numbers
This sounds so obvious, but I trusted people with my books for years — mainly because I wasn’t financially literate. I reached a point where I would no longer accept that I couldn’t run my own books, and so I upskilled myself. I took business management, bookkeeping and finance courses. It’s never too late to learn something new.
Education is everything
This is one area where I’m lacking. I’m filling the gaps as much as I can in my later life, and determined to give my children a better education than I had. I also want to help other children. Through the Lichaba Foundation, we close Kwa Lichaba on Wednesdays so that we can feed Soweto’s children and gogos in need once a week. We also have social workers and educators on site, to try and do as much as we can. Once a week isn’t enough, but it’s a start — and you always need to start somewhere.
Pay it forward
There are so many people who have helped me over the years. Never forget that you don’t achieve success alone. It always takes a village. I believe it’s our duty to give back if we succeed. We started out making boerewors rolls from the boot of our car and handing them out in townships. Today we have the Lichaba Foundation. We support the children of Soweto, have a magazine that supports local businesses and gives them free marketing, and the Miss Lichaba competition, an annual pageant for Soweto-based teens. The winner receives free university tuition, and is the face of all our businesses for a year. She is also expected to give back to her community, paying the idea of social awareness forward.
Work as a community
All of our businesses operate within a community — which is true of all businesses. You can’t operate as an island, and ignore those around you. And why would you want to? It creates goodwill, a vibrancy that operating alone could never achieve, and encourages everyone to work together towards shared goals.
Look for your own opportunities
When I look back at my life, it was tough as a kid. There was so much pain and embarrassment. Kids laughed at me because I sold fruit and vegetables at the side of the road and went to a remedial school. I was driven to prove myself. I’m a human being and a man. It’s my life, and only I can prove myself. I wouldn’t let my circumstances hold me back. I saw these things as challenges and obstacles I had to face, but also as opportunities. You need to look for opportunity. No one else will do that for you.
Listen to the podcast
Matt Brown interviews Max Lichaba and unpacks his incredible journey from small-town kid to successful entrepreneur.
To listen to the podcast, go to www.mattbrownmedia.co.za or find the Matt Brown Show on iTunes or Stitcher.
The Matt Brown Show is a podcast with a listenership in over 100 countries and is designed to empower entrepreneurs around the world through information sharing.
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