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Tasha’s: Natasha Sideris And Sivya Sideris

Two young entrepreneurs have been given the opportunity of a lifetime to expand their dream restaurant into a nationwide franchise

Monique Verduyn

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Natasha Sideris And Sivya Sideris of Tasha's

Natasha Sideris is in high spirits. It’sday five of her new job – managing executive at Famous Brands – and she stillcan’t believe she’s here. The exuberant 33-year-old is the brains behind one ofJohannesburg’s hippest daytime eateries, Tasha’s.

Currently consisting of two restaurants,one in Atholl Square, Sandton, and the other in Village View Shopping
Centre, Bedfordview, foodies will be pleased to know that Tasha’s will beopening in Melrose Arch, Morningside and Pretoria early next year, with furtherexpansion set to take place in the course of 2009.

What makes Tasha’s different in the crowdedrestaurant sector is that it offers upmarket, casual daytime eating in a finesetting. That’s what caught the attention of Kevin Hedderwick, COO of FamousBrands. A regular at the Bedfordview store, he watched Natasha and her equallyhardworking brother Savva (28) in action. “I was fascinated by the energy ofthis young brother-and-sister team, so I asked them what their hopes and dreamswere. Natasha said she would like to turn the concept into a franchise. I wasdrawn by their passion and vigour, so I suggested we do it together.” In July this year, Famous Brands acquired a51% controlling stake in the business which has subsequently been convertedinto a franchise. Famous Brands is the largest quick service and casual diningfranchisor in
Africa and has over 1 500 franchise restaurants across a brand portfolio thatincludes Steers, Wimpy and Debonairs Pizza. “It was not a case of ‘I like it so let’sbuy it’,” says Hedderwick. “We are a commercial company and the purchase wasvery much part of a deliberate strategy to take us into the premium end of thecasual dining market where we have no representation at all. Added to this isthe fact that Tasha’s competes in a space of its own.”

With Famous Brands’ muscle behind it,Tasha’s is set for the big time. For a youthful, new business, the transactionbrings access to a finely-tuned infrastructure. Included in that is brandstewardship; the provision of a full turnkey service to the Tasha’s brand andits future franchise partners (including the drawing of plans, appointing ofcontractors and project management of all new restaurant openings, revamps andrelocations); manufacturing services; logistics expertise; development andprocurement expertise; and access to all “back of house” functions.While many of the franchise systems in theFamous Brands stable have around 300 restaurants nationwide, the plan forTasha’s is different. No more than 20 to 30 stores in premium locations areplanned for the next four years. Hedderwick says the company has no desire tocommoditise the brand. Where Famous Brands would normally find a concept, buyit from the creator and wave goodbye, the objective here is to grow thebusiness with the two young entrepreneurs and give them the systems to matchtheir drive.

“Without the capital and the businesssystems we provide it would take Natasha and Savva years to accomplish theirdreams for Tasha’s,” says Hedderwick. “At the same time, the quality and stylethat defines Tasha’s is dependent on their commitment to the ongoingdevelopment of the brand. There is perfect synergy between what they bring andwhat we have to offer. That is why we did not buy the business outright, butchose instead to partner.” Natasha and Savva concur. “Almost overnightwe have gone from yelling at waitresses to being a fully-fledged businesssystem,” says Savva. “We are excited about attending our first strategy meetingand budget planning session. Budgeting is something we simply had no time to dowhile we were running the restaurants.”An SABMiller veteran, Hedderwick points toa lesson that can be learnt from the beer giant. The public knows SABMillerlargely for its Castle Lager and Carling Black Label beer, but future growth in the beer business will come from brands likePeroni. Having identified this trend, SABMiller is actively investing inpremium beers.“It’s similar thinking that motivated ourinvestment in Tasha’s. Whether the economy is up or down, there are people whohave money to spend and lots of it. We see great scope for growth in upmarketdaytime dining.”

South Africa has many mainstream consumerswho want a bit of luxury but are often intimidated by upmarket environments.Tasha’s, says Hedderwick, manages to be exclusive without excluding, thanks toNatasha’s emphasis on creating a warm environment. He cites an interesting development withWimpy. “The brand became universally known for its frothy coffee, but with theglobal evolution of the café society, there were customers who wanted somethingmore exclusive. To maintain their loyalty, Wimpy upped its coffee offering withthe introduction of premium blend coffees which have proved to be a hit. In thesame way, Tasha’s makes it possible for people to have a more exclusive eatingexperience without having to go to hugely expensive restaurants.” Natasha, who comes from a restauranteurfamily, has been in the food industry for 14 years. “My dad opened Fishmonger’sin Rivonia while I was at varsity and I helped him with the launch,” sherecalls. “From that first night, I knew that this was the industry I wanted to be in. It’s a hard business, butit was in my veins.”

She continued to help her father run therestaurant throughout her studies. On completing her degree in sociology andpsychology, which she says has come in handy on more than a few occasions, shejoined the Fishmonger head office group as operations manager.

From there, she opened her own fast-foodfranchise with the help of a financial backer. She describes that business as a“nightmare”. “Customer interaction is what really drives me,” Natasha says.“Being stuck behind a counter and having little opportunity to talk to peoplewas not at all enjoyable for me. It was, however, an excellent learningexperience.”

The willingness to experience as much aspossible is what has propelled her ahead of any potential competitors. Riddingherself of the fast-food store, she joined Nino’s and was instrumental inopening many of its Italian-style coffee shops. She then bought and ran her ownNino’s store for five years in Village View Shopping Centre.

It was during this time that she came torealise there was a massive gap in the local market for daytime eating. “Thereare loads of coffee shops where you can have cappuccinos, croissants andsandwiches, but I wanted to create a beautiful environment in which peoplecould have great, restaurant quality food,” she says. “It was during my thirdyear of owning the Nino’s franchise that the Atholl Square property developerscalled and offered me the opportunity to open a store there.” And that’s where Savva came in. An interiordesigner who had designed several Nino’s stores, he had also worked alongsideNatasha in Bedfordview, and had subsequently bought a Baron’s restaurant with hisfather, just down the road. Savva played an integral role in taking theTasha’s concept to fruition. The brother and sister team agreed that theywanted a brand that would be consistent, with a solid foundation. At the sametime, their aim was to develop something that would never be static, butconstantly evolving.

Natasha went to an interior designconsultancy and outlined the idea. “I asked them to give me something thatwould feel like our space; something that would not age or tire. We wanted amodern feel, but not so modern that it would have to be changed every year. Theidea was to create a vibe that was fresh and organic, with a feeling ofheritage underlying it.” The design team delivered, and the resultis a concept that allows food to be showcased. The Atholl Square store waslaunched in 2005, with the second opening a year ago. While the two existingstores are unique, they have in common a creamy colour palette that is warm andstylish. The atmosphere succeeds in being elegantly serene even though, asregulars will tell you, things can get quite chaotic at lunchtimes and onSaturday mornings when the queues stream out the door. One customer reportedlytold Natasha that being at the Atholl Square store was like floating in acappuccino.

Natasha says the plan is to ensure thateach new Tasha’s has a unique flavour to maintain the boutique feel that is somuch a part of the brand. Maintaining consistency and quality is key,and is not always easy to do in the transition from restaurant to franchise.Natasha is adamant, however, that nothing will change. “Tasha’s is aboutquality meals made on order. We do not pre-prepare our food, nor will we set upa central kitchen. Everything will continue to be made onsite by people wholove food.”

Ask Natasha how she originally financedTasha’s and her eyes widen. “With great difficulty,” she replies. Glibnessaside, she not only found a silent partner, but also ended up borrowing a lotof money from the banks. “One of the reasons why it’s so important to beabsolutely passionate about what you are doing is that you are in major debt inthe beginning.” However, she cautions, it’s vital to have agood knowledge of finance before you embark on any business venture. Like manyentrepreneurs, Natasha and Savva did not always have an easy time of it in thebeginning. “We were very good restaurateurs, but not great business people,”says Natasha. “It’s really important to hone your financial skills when youdecide to open your own business.

We had to deal with unexpected costs, likethe additional R50 000 that was required to complete the first store. Inaddition, our margins were low at first, and it took us time to determinewhether we had priced our menu properly.

Natasha points out that it’s not wise to gointo business if you have to live off the business while you are financing it,and you have no unencumbered cash. “It’s impossible to live like that. That wasone of the main reasons for bringing in a silent partner. We were alsofortunate enough to have a huge amount of help from my father; with hisexperience in the restaurant industry, he mentored us through the process.”

Perhaps it was the open air appeal ofAtholl Square that helped to attract customers. Tasha’s took off from day one,with word of mouth and good reviews the only marketing tools the Siderisesused. By the sixth month, they knew they had a winner and they had provedthemselves in the marketplace. Their success spurred them on to open theBedfordview location two years later.

“Before Tasha’s opened in Bedfordview,people living in the east were forced to drive to the northern suburbs if theywanted a more elegant daytime venue,” says Natasha.Like its predecessor, the second restauranthas been a success from the start. “The conversion of the site took longer thanwe expected, and people would walk past and ask us when we were going to open.There was a huge amount of anticipation.”

How is Natasha adapting to the move fromhands-on owner to head office executive? It’s early days yet, but she says sheis enjoying the intellectual challenges involved in putting the business systemdown on paper. She also maintains that she will remain actively involved in thetwo stores on weekends. “Obsessive attention to detail, right down to checkingthat all the salt cellars face the same way, is what keeps customers comingback,” she says. “You are either five-star, or you’re not.” With the move to Famous Brands, she andSavva have had to put in place managers and measures to ensure the consistencyand ongoing success of the two stores. “We believe in giving people incentivesand in offering the right managers a share of the business,”

Natasha adds.“Your own success is often dependent on taking into account the hopes anddreams of others too.” The focus now is on the development of thefranchise system itself so that the team can hit the road running come Februarynext year when the three new stores are launched. The franchise joining fee hasbeen set at R200 000, which includes access to training and operations manuals,project management and design, basically equipping the franchisee with thewherewithal to run the business. The cost of each store will be dependent onsize and location, but is estimated at between R2,5 million to R3 million for aturnkey operation, right down to the table napkins and sugar bowls. Stores willbe sold only to owner-operators who have a passion for both food and customerservice.

Hedderwick points out that Famous Brandswas created by a family of entrepreneurs and the business embraces theentrepreneurial spirit wholeheartedly. “With my own background in the blue chipsector, I placed a huge emphasis on people and processes when I joined thebusiness. Today we have the best operational practices in place, all adapted tothe entrepreneurial environment.”

He adds one caveat. “I’ve entered into manytransactions and I’ve learnt that with the best will in the world, if thesynergy is not right between the partners, the relationship will fail. When thechemistry is not there, money becomes irrelevant.”

The negotiation process

It sounds too good to be true, but the dealbetween Famous Brands and Tasha’s was an easy one to conclude. “I suppose it’sbecause both parties knew exactly what they wanted,” says Natasha. “From ourside, we wanted the business infrastructure and resources that Famous Brandscould provide. I was also determined to ensure that the Tasha’s brand wouldnever be tampered with or commoditised.” For Famous Brands, the deal was aboutbuying a successful business that came along with the people who built it. Thiswill ensure that their creativity, individuality and love for the conceptendure throughout the growth of the franchise.

Despite the fact that it was such a simpledeal to close, Natasha insisted on legal representation and also consulted withher father – an experienced restaurant owner – to make sure she did not put afoot wrong.

The pay off                                                                                                                        

So what lies ahead for the Siderises nowthat they have sold 51% of Tasha’s? What’s interesting about this deal is thatit’s quite different from the norm for Famous Brands, which does not usuallyenter into joint ventures. “We retain 49% of the value of the business, andalong with that we are taken into the fold of the country’s leading foodservices company,” says Natasha. “We gain access to capital and resources.” Resources is a key word. Consider that ifthe Sideresis had gone into franchising on their own, the legal fees fordrawing up a franchise agreement alone would cost them in the range of R50 000each. “At the same time, our input into the brandremains the same,” adds Natasha. “It’s a win-win situation all round.”

Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.

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1 Comment

1 Comment

  1. Jenna armstrong

    Nov 13, 2014 at 16:40

    Hello. I am writing an exam tomorrow (my final grade 11) for business studies and we are basing it on famous brands and tashas. This is the first interesting, well written yet informative article I have read about this topic.

    I was just wondering is famous brands and tashas a partnership? And do you know their individual form of ownership.

    If you have a free moment please could you give me anything you know about this two companies. It would honestly mean so much to me!

    I signed up just to comment on this. really need help.

    Thanks
    Jen

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Company Posts

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.

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  • 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.”

Related: Zenzele Fitness’s Clever Tactics To Grow In Next To No Time

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.”

Supporting growth

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.”

Related: Entrepreneur BB Moloi’s Inspiring Story of Rise To Success Through Grit And Hard Work

The business

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.

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Entrepreneur Profiles

Lichaba Creations Founder Max Lichaba’s Inspiring Journey To Entrepreneurial Success

Max Lichaba finished school with a Grade 10 and no prospects, except for a burning desire to do more with his life than become a miner like all the other men in his community. This is the story of how he started a jewellery business, lost everything, and painstakingly built it up from scratch again.

Nadine Todd

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max-lichaba

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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

max-lichaba-entrepreneurThe 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?

Related: 20 Quotes On Coping With Change From Successful Entrepreneurs And Leaders

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

kwa-lichaba-founderWhile 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.

Related: Successful People Always Chase the Impossible – Here’s Why

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.

Related: 4 Success Lessons From The Entrepreneur Who Quietly Grew Pinterest Into A $12 Billion Company

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.

Lessons Learnt

kwa-lichaba-event

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

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Matt Brown interviews Max Lichaba and unpacks his incredible journey from small-town kid to successful entrepreneur.

To listen to the podcast, go to www.mattbrownmedia.co.za or find the Matt Brown Show on iTunes or Stitcher.

The Matt Brown Show is a podcast with a listenership in over 100 countries and is designed to empower entrepreneurs around the world through information sharing.

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Entrepreneur Profiles

Co-Founder Of DataProphet Daniel Schwartzkopff Talks AI And How To Prepare For The Coming Change

Artificial Intelligence is set to change the way all companies do business, says Daniel Schwartzkopff of DataProphet. Those who don’t prepare for this inevitability right now run the risk of getting left behind.

GG van Rooyen

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Vital Stats

  • Player: Daniel Schwartzkopff
  • Company: DataProphet
  • Position: Commercial director and co-founder
  • Established: 2013
  • Visit: dataprophet.com
  • About: DataProphet is comprised of a diverse team of skilled computer scientists, statisticians, actuaries, engineers and mathematicians who deliver actionable Artificial Intelligence solutions to organisations.

Can you give us some background on yourself? What sparked your interest in the fields of AI and machine learning?

I first developed an interest in AI and machine learning when trying to build a system to play poker against humans and win in 2011. Subsequently, it has been proven that heads-up limit hold’em poker is a solved game, meaning there are now unbeatable AI bots in this variant of the game.

How did DataProphet come about, and what does the company do?

DataProphet started as a machine learning consultancy in 2013 after noting the lack of such businesses in South Africa. This was at the beginning of the machine learning renaissance — the advent of graphic processing unit (GPU) processing had enabled techniques developed in the 1950s (neural networks and deep learning) to finally become viable. The use of a GPU as opposed to the CPU to perform the calculations necessary for deep learning brought about a 100x increase in calculation speed. This allowed companies and individuals access to the technology that only a nation-state with a supercomputer would have previously had.

DataProphet developed expertise across many industries with a major focus on insurance, financial services and manufacturing and began to develop products. It is now primarily focused on the global expansion and distribution of its Omni manufacturing product that is able to massively reduce defect rates by optimising with machine learning. This software is in production at several global sites.

One of our clients, Atlantis Foundries, the largest foundry in the southern hemisphere has been using our software since the beginning of the year and has achieved a 0% defect rate on shipped parts for several months — a very exciting milestone for us.

Is there a difference between AI and machine learning?

This is a fairly contentious question and largely depends on who you ask. In my opinion, Artificial Intelligence refers to the broader concept of enabling machines to perform tasks that previously only humans would have been able to do. In some narrow applications machines can now perform these tasks much better than humans.

Machine learning is one way to enable Artificial Intelligence and refers to the idea that machines can perform as more than just calculators, essentially discovering the underlying patterns/equations that govern a system just by providing them with enough data.

These can seem like such high-level concepts, so can you give us concrete examples of how they can affect of a business?

All industries will use machine learning as a fundamental part of their operation in the future. For example, machine learning can provide more accurate pricing models for insurance. It can reduce defect rates in manufacturing by predicting whether a part will be faulty, and then adjust the operating parameters to produce less faulty parts in future. Netflix and Amazon use machine learning in their recommendation systems to provide you with content and products that you want and thereby increase sales.

Self-driving cars are entirely powered by machine learning. For retail, machine learning can predict what a customer will buy and generate personalised specials based on anchor items that will draw the customer back to the store. It can perform more accurate demand forecasting than any linear model.

The opportunities for implementing machine learning in business are vast and most of the S&P 500 either have in-house data science teams or are using machine-learning powered products already. The only requirement is data. Data is extremely valuable and generally enterprise-size businesses have the quantity of data necessary to build an effective model.

How will these two concepts disrupt the working environment?

Rules-based professions can and will be displaced entirely by AI systems. Lawyers, doctors, accountants and so on. Jobs requiring empathy and human interaction will be the last to go, along with engineers, programmers and other professions that have a design or management element.

How should companies prepare for the coming change?

Businesses should begin to aggressively store and utilise their data. Machine learning can significantly improve efficiencies in almost all businesses.

In 1965, corporations remained in the S&P 500 Index for an average of 33 years; by 2012 this had shrunk to 18 years. In a single year, Kodak’s net earnings dropped from $1,29 billion to $5 million. All they did was fail to act on a market shift with the introduction of the digital camera. Machine learning is having the same effect on other  industries. Uber’s core business model is based around machine learning and they are effectively shutting down the metered cab businesses in every city they operate in.

Taxi businesses faced no competition for decades and grew complacent and failed to innovate. Now some of the largest cab companies in the world have split up and filed for bankruptcy protection. Lemonade Insurance Company is disrupting the insurance industry with crazy growth figures and much lower pricing because of their use of machine learning and an app to radically change the status quo. This is not the distant future. The time to engage with machine learning is now.

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