Ian Fuhr and his business partner Rudi Rudolph know they are an unexpected couple. They quip about their arguments over who would be the face of Sorbet, and delight in the reaction they elicit from newcomers who are not aware that the owners of Sorbet are less like Heidi Klum and more like Walter Matthau and Jack Lemmon in Grumpy Old Men.
And they have reason to be delighted –100 million reasons. From just four outlets in 2005, today the group has 37 outlets with group sales amounting to R100 million a year. Not bad for relative newcomers to the beauty industry. How are they doing it? Fuhr’s decision to focus on a retail model rather than a traditional salon model, an uncompromising dedication to customer service, and the creation of a firm footprint before franchising the concept, have all played a part in the impressive growth the group has enjoyed over the past six years.
A Revolutionary Business Model
In 2004 Ian Fuhr sold his retail start-up, Supamart, to JetMart, a member of the Edcon group. He had grown his business into a valuable asset, and he could have retired. A serial entrepreneur by nature, Fuhr loves building up people and businesses. Retirement was not for him. He was eager for a new challenge, but not sure what area he wanted to tackle next. It was his massage therapist who planted the seed for an idea that would germinate into Sorbet.
“She suggested to me that the beauty industry was on the rise,” says Fuhr. “And I had a gut feeling that she was right.” Beyond the gut feeling was a retailer’s keen eye that the current industry was not fully meeting market requirements. “There were hardly any branded chains in the industry. Done right, a branded chain can offer a consistent, reliable and branded service, and it’s a real vehicle for growth.”
The first question to ask in any industry when you spot a gap is why. Why does that gap exist, and why has no-one filled it before? “Often there is a real reason for a gap,” says Fuhr. “Perhaps others have tried to fill it and failed. It’s important to understand an industry before venturing into it, even if your idea seems perfect.”
What Fuhr soon realised was that there were two options in the beauty industry at the time: high-end spa resorts, or traditional salons. These were typically single salons owned by therapists who had started their own business. “They were wonderful salons, but they were one-man shows,” he explains. “Therapists do not typically have business experience, so these salons started off as home-run small businesses. Some grew into larger premises, but their growth was capped because they were essentially run as salons and not businesses. I wanted to create a different model: one that could be geared for real growth.”
Through a mix of logic and gut feel, Fuhr recognised the gap as one waiting to be filled with the right model. “And that’s when the real research began. There are hundreds and hundreds of salons in South Africa. In terms of numbers we were going to have a lot of competition. It was important to create a sustainable model that we could easily scale, but that was based on a brand people would come to recognise and respect.”
The idea behind Sorbet was to eventually franchise it, and this played a large role in developing the business model as well. “Going back to why there was a gap in branded chains, I was drawn again and again to the fact that most salons were opened by therapists with little or no business experience. The CEO of South African Breweries has not brewed a beer in his life, yet he runs a highly successful brewing business. This didn’t only need to apply to my lack of experience in the beauty industry, but the franchise model as well. It’s easier to teach a business person about the beauty industry than it is to teach a beauty therapist about business.”
The business model would be developed based on firm business practices, with beauty therapists hired to do the actual treatments.
“I also didn’t want to focus exclusively on treatments,” says Fuhr. “Most salons focus on treatments with products as a sideline. Coming from a retail background, I wanted to do this the other way around: Sorbet would stock products, and offer treatments as well.” The decision to have a retail focus led Fuhr to Rudi Rudolph, a well-known retail consultant who Fuhr had worked with before. At first just a consultant, Fuhr later offered Rudolph shares in the business, making the two co-directors of Sorbet.
Finding the Right Partner
Deciding to go the retail route is one of the key factors that has separated Sorbet from its competition. The chain’s ratio of products to treatments is 60/40 – the exact opposite of traditional models. “We buy as a group,” explains Rudolph. “This means head office has secured favourable supply agreements with our product partners. Franchised stores are responsible for their own product procurement, but we open an account for them with our suppliers, and they receive the prices and terms we have negotiated.”
Sorbet’s key suppliers are Dermalogica and Environ. Again, a lot of research went into choosing the right products. “We eventually settled on Dermalogica and Environ because they were dominant brands in South Africa,” says Fuhr. “These are high-end products, but they are not seen as a luxury. Instead, South African women view them as treatments – ‘must have’ products for their skin.”
Early meetings with Dermalogica went as expected: the MD of the local branch asked Fuhr if he was sure he wanted to open a retail beauty salon chain. “We were not a big deal for them at the time. We were launching with four outlets and the MD had serious doubts about how successful we would be in the beauty sector.” She took a chance though and signed a supply agreement with the new kids on the block. The chance paid off. Today Sorbet is Dermalogica’s single biggest customer in South Africa and the partnership has grown into exactly what Fuhr and Rudolph hoped it would: the Sorbet name is inextricably linked with that of Dermalogica.
“We expose our retail clients to treatments and vice-versa,” explains Rudolph. “Salons have high and low months as well. For example, during the winter months women are not having waxes and pedicures as frequently as they are in the summer months. The retail side of the business supports the outlets during these slower treatment months.”
The Sorbet Difference
Over and above their retail-focused model, Fuhr and Rudolph have a keen understanding of just how important customer service is. “We actually view each of our customers as guests and refer to them as such,” says Fuhr. “We have instilled a firm customer-centric ethic at the heart of the brand: a guest is always right, and the very best care must be taken of everyone who walks through our doors.”
If a customer isn’t happy with a treatment, they don’t pay for it – and no-one in the outlet will argue the point. Similarly, all gift cards will be honoured, regardless of when they were purchased, and all customer complaints are recorded and actioned on. “We ensure that each and every query is resolved,” says Rudolph. “Everyone makes mistakes. What’s important is how those mistakes are dealt with.”
Achieving this focus – and the customer loyalty it generates – has been the result of a number of key components. First, Sorbet’s Services Management will test every therapist’s technical competencies and verify qualifications before they can be appointed into the network. This practice includes appointments by franchisees. “We currently have two types of stores, head-office owned and franchises,” says Fuhr. “Our head-office stores are run by managers who we hand pick, and we are careful in our selection of franchisees.
This is in line with any franchised business. Where we differ is the level of involvement we have in the stores themselves. It is essential that each and every therapist is technically excellent at their job, and buys into our vision. If they don’t, we won’t offer the level of customer service that is now expected of the Sorbet brand.”
A customer loyalty programme offers free treatments and birthday specials, and can be claimed at any Sorbet. “The franchisees or head-office stores honour any loyalty card, and the therapist receives the same commission as she would if the treatment was paid for,” says Fuhr. This dedication to the therapists has resulted in an extremely low staff turnover as well, with the group’s commission structure a big draw card for experienced therapists.
“In most cases the owner/manager is not a therapist themselves,” says Rudolph. “We have focused on business people running the outlets, with excellent therapists performing the treatments. This means we need to retain and cultivate the best therapists in the business, which takes a good incentive programme.”
It is also based on the creation of a Sorbet ‘family’. “If you are happy at your workplace, or with your business, that satisfaction will naturally transfer to your guests,” explains Fuhr. “We have put a lot of energy into cultivating the Sorbet culture. We want everyone, from the owner or manager of outlets to therapists, receptionists and even tea ladies to really believe in the brand. They need to live and breathe the brand, and understand our own focus on the importance of our guests.” Regular training sessions, a strong focus on fair HR practices and incentive programmes have helped Fuhr – who has a background in employee relations – achieve this buy-in. He’s been so successful at it that all 17 of the group’s current franchisees were former guests who loved their Sorbet experience so much they wanted to buy into the brand.
Franchising the Business Model
Sorbet was launched in 2005 with the idea to eventually franchise the concept. Fuhr and Rudolph did not want to rush things though. “We wanted to establish a footprint and a strong network of stores before we began selling franchises,” says Fuhr. “Our franchisees will eventually be the ambassadors of the brand we have created, but we need something to offer them as well. We needed to build up a strong brand before we could franchise it.”
Head-office run stores gave Fuhr and Rudolph the ideal opportunity to perfect their systems and models as well. “Hiring managers allowed us to test the theory that the owners of Sorbet outlets did not have to be therapists, but business-minded,” says Rudolph. “As long as we have excellent therapists in each store, the owner or manager can concentrate on the business side of things, a system that has worked very well.”
Involved in every aspect of the business from day one, Fuhr and Rudolph have now scaled this model to include franchisees. “By 2009 we had grown from four outlets to 22,” says Fuhr. “It was at this point that we began opening franchise outlets as well.”
Today, of the 37 outlets in the Sorbet group, 17 are franchise stores. New stores are opening and some head-office stores are available for conversion into franchises. According to the partners, a few flagship stores will be retained by head office, but ultimately the group will be franchise-driven.
“We need to keep a few head-office outlets for two key reasons,” says Rudolph. “The revenue from the outlets gives head-office a revenue stream separate from our franchisees, and allows us to keep franchise fees to a minimum. Second, it’s always good to keep our feet on the floor. Running stores means we know exactly what our franchisees are experiencing on a daily basis, which is important if we want to continue supporting them in the way we have been.”
The partners have never focused on head-office stores to the detriment of franchisees, however. “Once we began franchising, our focus turned completely towards our franchisees,” says Fuhr. “Franchisees are the future of this business. We want a franchise environment of trust and support. We’ve kept our franchising fees low as a result, and marketing is free. We also capped royalties for new franchisees to help them get started. We’ve ensured good terms for our franchisees with our various suppliers, and even though we facilitate everything, franchisees deal directly with those suppliers. This means that if there are any savings to be made, the franchisee makes them, not us.”
Overall, the Sorbet group has focused since inception on a sense of community. While this was previously for employees, new franchisees are inducted into the group in the same way. “We have open and frank conversations about race relations, tolerance, success and working together,” says Fuhr.
“The success of this group will be built on how well we operate as a group and in turn treat our guests. Franchisees need to believe in this same goal. We are a young, fresh and exciting brand that has brought beauty and looking after yourself into the 21st century. We’re proud of our brand and we want everyone involved in it to be proud too. Not just because it’s new and successful, but because the foundations it’s built on are the foundations for personal wealth, happiness and success as well. The Sorbet community will be the driver of its own future growth.”
2005 – 1st full year trading; 4 outlets
2006 – 54% growth
2007 – 58% growth
2008 – 39% growth
2009 – 55% growth
2010 – Introduced franchised outlets; 45% growth
Over an average of three months, Sorbet’s 37 outlets perform:
- 25 000 treatments per month
- 9 000 – 10 000 waxes per month
- 4 000 pedicures per month
- 2 500 manicures per month
- 1 800 facials per month
Becoming a sorbet franchisee
Opening a Sorbet outlet will cost in the region of R900 000, of which 50% (R450 000) must be in unencumbered cash. Head-office offers an entire turnkey solution that covers every eventuality and includes special supplier terms and conditions for opening stores. No past experience as a therapist or in the beauty industry is necessary, although business experience is a plus. For more information visit www.sorbet.co.za
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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