Young urban entrepreneur Jonathan Liebmann is dispelling myths left, right and centre: Property entrepreneurs need to be older, more established. Wrong. Johannesburg as a hip urban centre is a thing of the past. Wrong. Businesses can’t thrive in the centre of town. Wrong. Welcome to Maboneng Precinct, which is breathing life back into Joburg’s CBD.
In downtown Johannesburg on the far east side of the city, a group of twenty-something-year-olds are running a neighbourhood that they’ve transformed from a no-go area into a hip, vibrant urban community. Take a walk down the street here and you’ll pass trendy restaurants and coffee bars.
Look up and you’ll see modern urban apartments and rooftop hangouts where young professionals, creatives and entrepreneurs take in the sunset over the city skyline. There are art galleries, collaborative work spaces, cinemas, and there is an eclectic mix of people on the street – international tourists and homecoming-revolution expats, business people, students and artists.
The pavements are clean and tree-lined and the area is well-maintained. It’s an equally far cry from the seedier areas of town and the high-walled, electric-fenced suburbs of the North.
This is the Maboneng Precinct and ten years ago its very existence would have been unimaginable. The east side of Johannesburg was seedy, crime-ridden and dilapidated. Much of central Johannesburg still is:
The Stock Exchange and big business had long-since moved out, making Sandton the new CBD. Respectable people didn’t want to drive through there; the suggestion that they live there would have been at once horrifying and laughable.
And then a youngster came home from a gap year overseas, and felt an aching longing for the urban lifestyle he’d experienced and come to love in cities around the world. Why, he asked, wasn’t the same thing possible in Joburg.
His name is Jonathan Liebmann and what’s remarkable about his story is that he has almost single-handedly breathed life into Maboneng. There are of course countless examples of urban renewal in cities around the world, but most of them required the intervention of a forward-thinking mayor or no-nonsense police chief to clean up the crime, and the strategic input and collective effort of a dedicated municipality – not to mention some kind of incentive scheme to entice business and people back to the city.
Maboneng has had none of that and yet it’s achieved what most people would have thought impossible. Not only has it attracted individuals, businesses, tourists and retailers, but it’s become sought-after, trendy, the place to see and be seen.
Visit Market on Main – the market in the Arts on Main block – on a Sunday morning and you’ll struggle to find parking. The hotels and apartments are all 100% occupied or sold. This is not a lone street that’s being doggedly occupied by some brave coffee vendors and a couple of urbanites wistfully trying to make-believe they’re in London/New York/Paris. This is a full-fledged neighbourhood.
People live, eat, work, shop, socialise and run businesses here. It has a beating heart and an energy all of its own.
And it exists because Liebmann and his team at Propertuity managed to sell a master vision of what the district could be – if people overcame their negative perceptions of the city, if the crime issue could be addressed, if a critical mass could be achieved to create a sense of a community. That’s a lot of ‘ifs’.
But Liebmann doesn’t like the suggestion that he is Maboneng. “The neighbourhood is the people who live, work and love it here: Its energy and personality comes from them. A place can never be about a single individual,” he says. He’s right, of course.
Maboneng’s success lies in the fact that it has taken on a life of its own, one that exists outside of Liebmann’s head.
But it was there that the precinct had its birth. Desperate to live some kind of urban lifestyle when he returned from overseas, Liebmann started looking for a place in the city he could convert into a work and live-in space. He had some experience in property, having purchased, renovated and sold a few flats, the first of which was in Waverely when he was just 18 years old.
“I found and converted a small factory space near 44 Stanley in Milpark and in doing so realised two things: Firstly, that these old factory spaces had development potential to become new live-and-work spaces, and secondly that I didn’t want to just do my own apartment. It was then that I knew I wanted to become a property developer,” he says.
It was an important moment in his journey. Liebmann had run a number of entrepreneurial businesses, including a cleaning business and a mobile coffee enterprise, with varying degrees of success.
“I’ve been running businesses since I was 15 but it wasn’t until I realised that I was passionate about property development that I really came into my own. Up until that point I’d been a bit scattered, looking and pursuing a range of opportunities. They were more or less successful but I think of that period as my school fees phase. I was learning important stuff about business and about myself. It all came together when I realised what I really wanted to do with my life. The passion I felt helped me hone my focus,” he says.
Start with a dream
Backed by his silent partner and financier, Liebmann turned his attention to finding a place where he could start to implement his vision. He purchased the buildings that would become the now-famous Arts on Main – a unique blend of studio, commercial and retail space that acts as a hub for creatives and artists.
While he was creating Arts on Main he started thinking more broadly. “That’s when the idea for Maboneng was born really.
I started thinking about the whole neighbourhood, the transformation of the whole east side,” says Liebmann.
Having the vision is one thing. Single-handedly creating a neighbourhood is another. So how did he do it? “I think there are a number of things that came together to bring about the success of Maboneng. In the early days I became completely and utterly immersed in the project. This was absolutely critical. I lived and worked in the space. I was construction, marketing, sales and financial manager.
I did everything. It became who I was and I think that level of passion must deliver results eventually,” he says.
He’d also identified the right initial target market: Arts on Main focused on creative people. “While travelling and in my time living near 44 Stanley I’d learnt that artists and creatives are often the best catalysts for change. They are the perfect first adopters. It’s not in any way unique to Arts on Main. It’s been proven in many cities throughout the world. It was important to get them in as they would become the foundation of the community,” he explains.
Turns out he was right. The influx of creative people helped to generate interest and curiosity in the media and general public.
“Maboneng was only going to be successful if we could reach a critical mass. You can’t have a vibrant neighbourhood of ten people – that’s a vibrant apartment block. We also needed to buy up stock in the neighbourhood so that the area would be sufficiently owned by us to justify the cost of upgrading all the infrastructure, the lights, the trees, the pavements, the security and the like,” he adds. The fact that Propertuity, not the City, has done all these things is remarkable in itself.
Another key success factor was brilliant design. “I think the most important thing about our company is that we are very good at design. That’s our differentiator and it’s my particular talent. If you asked what differentiated us from other property developers that would be it. We know how to design spaces. I have an excellent architect and together we’re a good team,” Liebmann explains.
The company also knows what it’s about when it comes to marketing. The design, marketing and sales teams work together very closely to sell the vision. “And because we keep executing on the vision, it strengthens people’s belief in it, and that in turn drives the growth of the whole venture,” he says.
Maboneng’s evolution included the development of Main Street Life, the first residential building in the portfolio with 194 apartments, a 12-room hotel and a cinema and retail on the ground floor. It was followed by the Main Change (45 office spaces), Revolution House (32 apartments and film and recording studios), and Fox Street Studios (a live-and-work concept where each floor is sold or rented to a different person).
It helps that the area is also extremely well-located in the middle of Johannesburg, which means it makes a lot of sense for a lot of different people and businesses to make it their base.
In every property the ground floor is always retail and restaurants, driving the neighbourhood’s unique engagement with the street. “Our portfolio is 60% residential, 20% industrial, 10% commercial, 10% retail. The idea is to have a complete and sustainable community that offers everything.
People want an integrated space where they can go downstairs, watch a movie, eat in a restaurant, walk everywhere and ride on a bicycle,” says Liebmann.
It’s no small irony that this is the stated wish-list of almost every person who buys into one of Johannesburg’s gated communities. Of course there is the unhappy issue of crime to discuss, and Liebmann is not a denialist when it comes to this most notorious aspect of Jozi.
“There’s no question – the crime in South Africa is out of control. However, the perceived crime in the city is not as bad as people think. Statistically, you have a higher chance of falling victim to crime in Sandton than you do in the city. So it’s been partly a matter of changing people’s perceptions,” he says.
That said, however, he recognises that the divide between the rich and the poor will always lead to crime. “We have implemented a number of unobtrusive security measures such as private security guards, and we’ve worked hard to foster community interaction. It’s important in any neighbourhood for people to know each other. But this is also a micro-economy – we offer both affordable and high-end products, and in between our properties are people who are poor. Hopefully in time the upliftment of the area will bring greater opportunities to these people and, with our ethos of fostering and encouraging entrepreneurship, they will stand to benefit. This is a long-term solution to the issue of crime,” he adds.
With such a successful blueprint for urban renewal, Liebmann is unsurprisingly not short of offers to work the same magic in other South African cities, as well as those abroad. He’s a typical young entrepreneur in every other aspect except in his response to such interest:
“I don’t want to get ahead of myself. I don’t want to become one of those developers who talks about crazy expansion plans. For the next couple of years, I’m not doing anything that’s not Maboneng. Absolute focus is what has made this project successful to date and it’s a formula I intend sticking to. Sure the offers are tempting but I need to become a specialist in this area. There will be time in the future to explore opportunities to replicate the model elsewhere, but that time is not now,” he says.
From dream to reality
His business partner and financier has reinforced this position. “He’s been an inspiration to me,” says Liebmann. There are those who are quick to put all of Liebmann’s success down to the fact that he occupies the rare and enviable position of having someone bankroll his dream.
To such detractors his response is simple: “It’s true that getting finance means overcoming one of the big obstacles in business. But it’s worth remembering a number of things: Firstly, you don’t get finance because you were lucky. Winning the lottery is lucky.
Given how difficult everyone knows it is to get finance, you have to work incredibly hard to prove you’re worthy of finance. The individual who financed me has a philosophy of backing the entrepreneur, not the business. He backed me in previous ventures. What he’s looking for (and he’s not unique in this respect) is an entrepreneur with vision and the ability to implement and make things happen. I had to prove I had those attributes.
“The second thing is that getting finance does not represent the end-goal. You never have enough finance, even when you get private equity funding. At the moment I am looking for bank finance, so I’m in the same boat as other entrepreneurs.
“Lastly,” he concludes, “I believe that if you show a properly successful business model backed by your proven ability to implement, there is plenty of finance on the table.”
Liebmann might be called visionary by many, but those who give him this epithet miss his true gift. It lies in his ability to implement. Maboneng exists not just because someone believed it could, but rather because that person had the ongoing, relentless, indefatigable energy, determination, courage, fearlessness and business sense to make the vision a reality.
Liebmann’s advice to aspirant entrepreneurs
- Persevere. Have patience and keep on trying until your vision is well received by the market.
- Choose something you are genuinely passionate about. I’ve worked in other industries where I wasn’t as successful because I wasn’t as passionate about what I was doing.
- Become the project. Immerse yourself in it. Live, breathe and dream it. And be aware that this means you’ll have to make many personal sacrifices.
- Choose an industry that has the right kind of scale to suit your ambitions. I could never have been happy in a small or medium business. There are different types of entrepreneurs and it’s important that you know what type you are and what scale of venture you will be comfortable with.
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.
Slikour’s Moto: If You Dream It, You Can Be It
Rapper and entrepreneur Slikour believes his success is the result of one key element: The aspiration to make something of himself, and create a platform for his voice to be heard. Now he’s bringing that mindset to South Africa’s black urban youth.
- Player: Siya Metane AKA Slikour
- Company: Slikouronlife.co.za
- Launched: 2013
- Visit: www.slikouronlife.co.za
Before you can achieve great success, you have to believe in the possibility of success. This is the single greatest secret to changing your circumstances — you have to believe it’s possible.
Did music or entrepreneurship come first? Siya Metane, aka rapper Slikour, isn’t sure himself. The two have worked hand in hand for him since he started selling cassette tapes of his own music when he was 12 years old.
What has developed over time however, is an innate and deep understanding that with his success comes a responsibility to pay it forward, and help his community and kids like him see that they can be anything they put their minds to.
If they can dream it, they can be it — provided they realise they can dream it in the first place. This is his challenge, and greatest driving force.
Start small, but dream big
I bought cassette tapes on Smal Street in the CBD for R5. My best friend, Lebo and I recorded our own rap music onto them and sold them in our neighbourhood for R15. We needed the mark-up — it meant we could buy more tapes, and also that we were making a profit.
I’m not sure if we were trying to start a business or launch our rap careers, but if you’re living in a hood like Leondale you don’t always recognise that there are opportunities open to you. No one is going to do it for you — you have to have your own aspirations, and find a way to make them happen.
Keep dreaming big, no matter what
That was one of the biggest and earliest lessons I recall growing up: The ability to dream big can be stifled out of you. I lived in a hood where there were no aspirations past our neighbourhood — the neighbourhood and its opportunities were everything. If 90% of the people you know are suffering, who are you to not suffer?
It’s a very limiting mindset, and one that does a lot of damage to our youth. I knew kids who had incredible potential, but could only look at their immediate environments for opportunities. So a budding young scientist doesn’t find a way to change the world — he finds a new way to make drugs.
Those are the limiting aspirations I was surrounded by. I call it the Trap, and it’s the driving force behind everything I do today. I want South Africa’s urban youth to recognise the Trap, and understand that they should have aspirations beyond it, because they have the abilities and potential necessary to break free.
Work hard, be determined and believe in yourself
I was lucky, I wasn’t a victim of the Trap. What so many people don’t understand is that I could have been. Hard work, drive and discipline aren’t enough to break free of the Trap. You need to believe you can break free — to look beyond your current circumstances. In my experience, that seemingly simple mindset shift is the biggest hurdle to overcome. It’s more complicated and pervasive than you can imagine.
Two things showed me a different way. First, my mom got me bursaries at Holy Rosary Convent and then St Benedict’s College. I was surrounded by rich white kids, full of privilege, and it struck me that here were the same talents and opportunities, but with a wealth of aspiration in the mix.
That was the real difference — not ability, but recognising that ability and having the aspiration to do something with it. It was eye-opening. The second was meeting my best friend, Lebo Mothibe. Lebo, or Shugasmakx, as he’d later be known in the music world, had one foot in the privileged world, and one foot in our world.
His mom lived in the hood, his dad was a wealthy entrepreneur who lived in Illovo. And Lebo straddled both worlds effortlessly, and with humility. But he looked beyond the limiting beliefs held by many of his neighbourhood peers.
Find people to inspire you to reach success
His dad was also the first self-made, wealthy black man I met. But when I heard his story, I realised that it wasn’t overnight success. He’d slept on Lebo’s mom’s couch while he slowly but steadily built his business. It gave me an understanding that success is earned. You need to work at it, and push on against adversity. This had a huge impact on me.
Lebo was the ying to my yang. Even though we didn’t think of each other as business partners, that’s what we were, from the age of 12. We formed Skwatta Kamp, we hustled and shook up the music industry together, and changed the face of rap music in South Africa.
I was the dreamer, the visionary, and Lebo was the executor. He found a way to make my crazy schemes and ideas come to life. This is exactly what a partnership should be — helping each other grow, and complementing diverse skill sets.
Build your success, one step at a time
We built our success, brick by brick. I entered a TV show competition, Jam Alley, and won. I used the cash and Dions vouchers to buy recording equipment. Lebo’s dad helped with speakers and a keyboard. My brother, who was studying IT, downloaded software and helped us with our recording quality. Everyone pitched in with what they could.
Be your own biggest cheerleader
We tried the recording contract route for a while, but realised that the only people who cared about our success were us. And so we hit the streets — hard. We had street crews, we sold our own CDs and negotiated with music stores to carry our albums.
Recording studios kept saying they’d sign us, but they never had a studio available. They just didn’t see the value in rap and hip hop. They didn’t believe there was money in it in South Africa. We needed to prove there was.
Gallo finally approached us and signed us after we won at the South African Music Awards (SAMAs) as an independent act. We used real guerrilla tactics to get our name out there — on stage, with that platform, we told our fans that if a music store didn’t carry our album, to burn it down. We wanted the attention — that’s how you build a name.
Our first album went gold, and we used that to push the idea of rap into mainstream media. If 20 000 people bought the album, another 200 000 had bootlegged it. There was money here; and slowly brands and advertisers started realising we were right.
Drive a movement with your business
We were musicians, but first and foremost we were driving a movement, and that meant we needed to be businessmen as well. We hosted end of year parties, and got brands on board, realising we had a captive audience that aligned with their target market demographics. We started our own label, Buttabing Entertainment.
Our goal was to find and nurture young musicians from the hood to get them established in the industry, and show other kids in the Trap that it could be done: Anyone can create their own destiny. One of the things I’m proudest of is discovering a kid in Katlehong, Senzo Mfundo Vilakazi, who would develop into Kwesta.
He’s doing phenomenally well, and recently appeared on Sway in the Morning, one of the biggest hip hop shows in the US. Our success spilt over into Kwesta, and now his meteoric rise will hopefully inspire a whole new generation to dream bigger than they ever thought possible.
Pivoting to further growth
All success has its pinnacle. By 2010 we had achieved so much as Skwatta Kamp. We’d brought rap music into the mainstream and opened opportunities for countless kids, as music labels actively sought rap and hip hop acts. I realised that I’d hit a ceiling. I needed to step back, regroup and figure out what to do next.
What I did was something I’ve only ever associated with privilege. I moved home, spent a lot of time lying on the couch, and wrote. I wrote my life, my lessons, my dreams, my ideas. I don’t know how I reached a point where I was able to do that, but I’m grateful. I started collecting my thoughts and understanding my purpose.
During that time I was approached to join a few marketing agencies. I had no formal marketing training, but we’d worked with big brands at our parties and activations.
Sprite was the first to recognise that they had an opportunity to authentically connect with the black urban youth through us, and so we partnered up. I learnt above-the-line marketing in a Coca-Cola boardroom, and built onto what we’d learnt on the streets about below-the-line marketing.
Take a step back, and rediscover your purpose
That experience had drawn attention, and so for a while I joined an agency. But its mandate was sponsorships, and my heart was with the black urban youth. I’d discovered my purpose, even if I’d subconsciously been living that purpose for almost 20 years.
I wanted to create a platform that gives young black artists a voice; established artists a way to reach out to the youth that other platforms don’t offer; and brands a way to authentically connect with that audience — not just to sell products, but to show black urban youth that their culture is important, that it holds value, and that they, in turn, hold value.
Adidas’s support of Run DMC in the US showed that kids from the ghetto had a message worth listening to. Big brands have the power to connect the unheard and voiceless to the mainstream, if it’s done correctly. I had the marketing experience to understand the ROI that brands need, as well as what I could do with that to support black urban youth.
All I had were dreams and a URL, but that was enough. I quit my job and launched my website, Slikouronlife.
Reveal opportunities and create aspirations with your message
This is my politics and CSI. If we can get marketing to marry culture, and change the positioning and perception of young black South Africans, we can show there are opportunities out there, and create aspirations.
But we need to put culture first and tap into the authenticity of who we are as South Africans. We need to recognise and acknowledge the mental traps that exist in our neighbourhoods, and that we are victims of limiting beliefs, and then show that there is another way.
Everyone told me I was nuts. That black people don’t go online. I did it anyway. With Skwatta Kamp we had created a market for our music. Kids supported us; my name added value — and then brands came on board. We now average between 200 000 and 250 000 unique visitors a month, which is impressive for a mainstream website, let alone a niche music site.
Ten months ago we were a team of three operating from my house with one desk. Today we’re a team of ten with one focus: To make a real difference on the ground. To give the voiceless a voice. To prove that if we can drive the aspirations of South Africa’s urban youth, the sky will be the limit.
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.
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