- 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.
Rich List: 2019 Richest People In The World
They’re worth billions, and their wealth continues to grow each year. Here’s the top 10 richest people globally in 2019.
10. Jeff Bezos
Net Worth: USD 139,5 billion
Jeff Bezos founded e-commerce giant Amazon in a garage in Seattle, USA in 1994. He also purchased The Washington Post for $250 million in 2013.
Bezos believes in always taking a long-term view and living in the present moment.
“I think this is something about which there’s a lot of controversy. A lot of people — and I’m just not one of them — believe that you should live for the now.
I think what you do is think about the great expanse of time ahead of you and try to make sure that you’re planning for that in a way that’s going to leave you ultimately satisfied. This is the way it works for me. There are a lot of paths to satisfaction and you need to find one that works for you.”
7 Self-Made Teenager Millionaire Entrepreneurs
These teenager entrepreneurs have already made their first million and more. How did they do it and what’s their secret to success?
1. Evan of YouTube
Evan and his father Jarod started a youtube channel ‘Evantube’ to review kids’ toys. The channel was a resounding success with other kids – so much so that today it boasts just over 6 million subscribers.
Evantube brings in more than USD1.4 million a year from ad revenue generated on the channel.
How did it start? With a father-son fun project making Angry Birds Stop Animation videos, and morphed into doing reviews on toys and video games. But Jarod’s dad is aware of the responsibility of Evan’s sudden fame and hopes to teach Evan about the importance of being a good role model for others.
“Most recently, we had the opportunity to work with the Make-a-Wish Foundation, and were able to fulfill the wish of a young boy whose dream was to meet Evan and make a video with him at Legoland,” explains Jared. “It was a really incredible experience. YouTube has definitely opened many doors, and the kids have gotten to do some pretty amazing things.”
Expert Advice From Property Point On Taking Your Start-Up To The Next Level
Through Property Point, Shawn Theunissen and Desigan Chetty have worked with more than 170 businesses to help them scale. Here’s what your start-up should be focusing on, based on what they’ve learnt.
- Players: Shawn Theunissen and Desigan Chetty
- Company: Property Point
- What they do: Property Point is an enterprise development initiative created by Growthpoint Properties, and is dedicated to unlocking opportunities for SMEs operating in South Africa’s property sector.
- Launched: 2008
- Visit: propertypoint.org.za
Through Property Point, Shawn Theunissen and his team have spent ten years learning what makes entrepreneurs tick and what small business owners need to implement to become medium and large business owners. In that time, over 170 businesses have moved through the programme.
While Property Point is an enterprise development (ED) initiative, the lessons are universal. If you want to take your start-up to the next level, this is a good place to start.
Risk, reputation and relationships
“We believe that everything in business comes down to the 3Rs: Risk, Reputation and Relationships. If you understand these three factors and how they influence your business and its growth, your chances of success will increase exponentially,” says Shawn Theunissen, Executive Corporate Social Responsibility at Growthpoint Properties and founder of Property Point.
So, how do the 3Rs work, and what should business owners be doing based on them?
Risk: We can all agree that there will always be risks in business. It’s how you approach and mitigate those risks that counts, which means you first need to recognise and accept them.
“We always straddle the line between hardcore business fundamentals and the relational elements and people components of doing business,” says Shawn. “For example, one of the risks that everyone faces in South Africa is that we all make decisions based on unconscious biases. As a business owner, we need to recognise how this affects potential customers, employees, stakeholders and even ourselves as entrepreneurs.”
Reputation: Because Property Point is an ED initiative, its 170 alumni are black business owners, and so this is an area of bias that they focus on, but the rule holds true for all biases. “In the context of South Africa, small black businesses are seen as higher risk. To overcome this, black-owned businesses should focus on the reputational component of their companies. What’s the track record of the business?”
A business owner who approaches deals in this way can focus on building the value proposition of the business, outlining the capacity and capabilities of the business and its core team to deliver how the business is run, and specific service offerings.
“From a business development perspective, if you can provide a good track record, it diminishes the customer’s unconscious bias,” says Shawn. “Now the entrepreneur isn’t just being judged through one lens, but rather based on what they have done and delivered.”
Relationship: “We believe that fundamentally people do business with people,” says Shawn. “There needs to be culture match and fluency in terms of relations to make the job easier. As a general rule, the ease of doing business increases if there is a culture match.”
This relates to understanding what your client needs, how they want to do business, their user experience and customer experience. “We like to call it sharpening the pencil,” says Desigan Chetty, Property Point’s Head of Operations.
“In terms of value proposition, does your service offering focus on solving the client’s needs? Is there a culture match between you and your client? And if you realise there isn’t, can you walk away, or do you continue to focus time and energy on the wrong type of service offering to the wrong client? This isn’t learnt over- night. It takes time and small but constant adjustments to the direction you’re taking.”
In fact, Desigan advises walking away from the wrong business so that you can focus on your core competencies. “If you reach a space where you work well with a client and you’ve stuck to your core competencies, business is just going to be easier. It becomes easier for you to deliver. Sometimes entrepreneurs stretch themselves to try to provide a service to a client that’s not serving either of their needs. This strategy will never lead to growth — at least not sustainable growth.”
Instead, Desigan recommends choosing an entry point through a specific offering based on an explicit need. “Too often we see entrepreneurs whose offerings are so broad that they don’t focus,” he says. “Instead, understand what your client’s need is and address that need, even if it means that it’s only one out of your five offerings. Your likelihood of success if you go where the need is, is much higher.
“Once you get in, prove yourself through service delivery. It’s a lot easier to on-sell and cross sell once you have a foot in the door. You’re now building a relationship, learning the internal culture, how things work, what processes are followed and so on — the client’s landscape is easier to navigate. The challenge is to get in. Once you’re in, you can entrench yourself.”
Desigan and Shawn agree that this is one of the reasons why suppliers to large corporates become so entrenched. “Once you’re in, you can capitalise from other needs that may have emanated from your entry point and unlock opportunities,” says Shawn.
Building a sustainable start-up
While all start-ups are different, there are challenges most entrepreneurs share and key areas they should focus on.
Shawn and Desigan share the top five areas you should focus on.
1. Align and partner with the right people
This includes your staff, stakeholders, partners, suppliers and clients. Partnerships are the best thing to take you forward. The key is to collaborate and partner with the right people based on an alignment of objectives and culture. It’s when you don’t tick all the boxes that things don’t work out.
2. Make sure you get the basics right
Never neglect business fundamentals. Do you have the processes and systems in place to scale the business?
3. Understand your value proposition
Are you on a journey with your clients? Is your value proposition aligned to the need you’re trying to solve for your clients? Are you looking ahead of the curve — what’s the problem, what are your clients saying and are you being proactive in leveraging that relationship?
4. Unpack your value chain
If you want to diversify, understand your value chain. What is it, where are the opportunities both horizontally and vertically within your client base, and what other solutions can you offer based on your areas of expertise?
8. Don’t ignore technology
Be aware of what’s happening in the tech space and where you can use it to enable your business. Tech impacts everything, even more traditional industries. Businesses that embrace technology work smarter, faster and often at a lower cost base.
Ultimately, Desigan and Shawn believe that success often just comes down to attitude. “We have one entrepreneur in our programme who applied twice,” says Shawn. “When he was rejected, he listened to the feedback we gave him and instead of thinking we were wrong, went away, made changes and came back. He was willing to learn and open himself up to different ways of approaching things. That business has grown from R300 000 per annum to R20 million since joining us.
“Too many business owners aren’t willing to evaluate and adjust how they do things. It’s those who want to learn and embrace change and growth that excel.”
Networking, collaborating and mentoring
Property Point holds regular networking sessions called Entrepreneurship To The Point. They are open to the public and have two core aims. First, to provide entrepreneurs access to top speakers and entrepreneurs, and second, to give like-minded business owners an opportunity to network and possibly even collaborate.
“We believe in the power of collaboration and networking,” says Desigan.
“Most of our alumni become mentors themselves to new entrants to the programme. They want to share what they have learnt with other entrepreneurs, but they also know that they can learn from newer and younger entrepreneurs. The business landscape is always changing. Insights can come from anywhere and everywhere.”
The To The Point sessions are designed to help business owners widen their network, whether they are Property Point entrepreneurs or not.
To find out more, visit www.ettp.co.za
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