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Rico Wessels and Christopher de Bod Broke all the Rules

No business plan, no strategy, no market research and no cash in the bank = a R100 million business. Here’s how they did it.

Nadine Todd

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Wessels-and-Christopher-de-Bod-Successful Entrepreneurs

Rico Wessels and Christopher de Bod are not your typical entrepreneurs. For one thing, they didn’t dream of starting their own business.

When they finally did launch their company, PHAT Brand Activation in 2008, they went from an idle discussion about starting something of their own instead of building other people’s businesses, to resigning, to start-up in two weeks flat. They also broke all the rules doing it.

Every business book, coach and expert will give you the same start-up advice: Have a business plan, develop a clear strategy, have a structure in place, do market research, and have some cash in the bank. Wessels and de Bod had none of the above.

What they did have were complementary skills sets, contacts, and the fact that they were going into the business together.

Key entrepreneurial partnerships automatically raise the chances of success, and in Wessels and de Bod’s case, this was a vital ingredient in their business’s eventual growth – de Bod brought in the business (and in the early days they would take any business that came their way) and Wessels made sure they delivered.

Their early days were haphazard and organic. They entered the events industry because they knew it took the same amount of work to put on a R100 000 event as it did a R1 million event.

They also knew you could ask for upfront deposits, which meant they could do business without cash in the bank, and since they only had R3 000 start-up capital and enough saved up to pay two months’ worth of bills, this was a deciding factor.

So, putting out the word to everyone they knew, the partners made it known they were open for business, and they would do any event, no matter how big or small. Bar mitzvahs, weddings and corporate functions were the order of the day.

Phat-Brand-Activation-on-building-a-business_Entrepreneur-Profiles

 

They soon realised an important fact: They hated weddings, largely because mothers of the bride are evil, but they loved corporate events. As they managed to get cash in the bank, they were able to become more and more selective about the work they chose, until eventually their sole focus was corporate clients.

Today, they run a R100 million business with a laser focus. But the ride hasn’t been without its bumps in the road – and lessons to be learnt.

“I promise clients the world, Rico makes sure I’m not a liar.”

As partnerships go, de Bod and Wessels have very different skills sets and personality traits. Wessels’ background is in advertising agencies. His forté is project management and execution.

Give him a brief and he’ll get the job done, to spec, within budget. He’s all about the deliverables. De Bod is more people-orientated. His background is in call centres and client services.

He’s finely tuned to client needs, and is able to determine what a company needs, not what a client thinks they actually want. Together it’s proved to be a winning combination, with de Bod able to discern the best course of action for each client (and then promising them the world) and Wessels making those promises happen.

But it’s not just about the partners complementing each other’s skills set.

“We both started at the bottom of a corporate structure and worked our way up,” says Wessels. It’s an important point.

Neither is afraid of hard work and learning new things, but more importantly, they also learnt business from the inside out.

“We didn’t realise it at the time, because neither of us was specifically trying to learn as much as possible about business to prepare ourselves to become entrepreneurs, but if you’re naturally ambitious, inquisitive and want to do the best you can in every role you’re in, you learn a lot about business along the way,” he adds.

“My corporate career prepared me to understand business strategy, finance, profitable accounts and how to streamline processes. Christopher’s career taught him about people and the importance of customer service and he also developed a talent for translating those needs into actionable deliverables for the project management teams.

“It’s one thing to get client feedback. It’s another matter entirely translating that feedback into useable data for the company. These would be invaluable skills once we launched PHAT.”

Related: Meet the Disrupter 

“Cash is your lifeblood. Without it, you’ll never grow.”

These skills attracted early clients and ensured the duo could deliver on their promises. Jobs well done led to word-of-mouth referrals and bigger projects, but it wasn’t until cash flow stabilised that the business could really start growing and taking shape.

“Even though we’d started with nothing, we quickly learnt that our most valuable asset was cash in the bank. Healthy cash flow allowed us to start choosing our clients and which jobs we wanted to do, but more importantly, it meant we could start branching out from events,”says de Bod.

With a keen eye for identifying gaps in the needs of their clients, he soon realised that brand promotions was a marketing area that they would be good at – they had the necessary skills and backgrounds to pull promotional activations off, and more importantly, they now had the upfront cash.

“At first, we wanted to outsource this function,” admits Wessels. “Promotions require a lot of contract workers, most of whom tend to be university students and highly unreliable. It’s an area we didn’t want to be in. But we could see a client need, and we soon realised two things.

“First, if we were simply the middle men we’d be adding management fees onto management fees, pricing ourselves out of the market. More importantly though, if we outsourced our activations department, we wouldn’t be able to control our service delivery, and it might actually end up hurting us. What’s the point of growth to the detriment of your brand?”

And so their focus on getting cash in the bank began to really pay off. “Activations are tricky because you need to pay your contractors long before the client pays you,” explains Wessels.

“Many clients take up to 60 and even 90 days to pay you, and your single biggest expense is your promoters (or activators). Without a healthy cash flow you won’t be able to honour your agreement with them.

“Reliable, trustworthy activators are hard to find, and we’ve developed our brand around the fact that they’re ‘living’ media, which means they can intelligently interact with consumers, answering their brand questions and discussing the products they’re promoting.

“This takes training, which is an additional investment. You want to keep your activators happy, and to do that you can’t take weeks or even months to pay them.”

As the business has grown, so too has PHAT’s client base and the size of the activations they’re responsible for. None of this would have been possible without keeping a keen eye on cash flow. “So many businesses are unable to scale because they don’t have a healthy bank balance,” says Wessels. “It doesn’t matter what your balance sheet says. If you don’t have cash in the bank, you’ll never grow.”

“We lost a lot of good people before we realised they were the backbone of business.”

Phat-Brand-Activation_Key-strategies

Growth brings with it new challenges though. Sure, you can now take on bigger jobs and hire more people, but it’s also easy to get so caught up in doing the work that you forget how important systems, structures and above all people are to the business’s success.

“Our first round of hiring activators had gone well,” says Wessels. “Chris and I personally chose 500 CVs, shortlisted those to first 300, and then 120, and then with client input we settled on 80. Most of that first group was with us for four years, and many went on to be hired by our clients, and some have even joined our core staff.

“But we also got things wrong. We were running like a sweatshop. We worked 18-hour days and we expected our team to do the same. We had a job to do, and both of us are hardwired to work hard and get the job done to the best of our abilities.

“The problem was that we didn’t have the systems in place to support the workload we had undertaken, and we expected a lot from our employees without giving them any autonomy or seniority.”

The result? It took Wessels three days to pay 400 activators (a task he did himself), which is just one indication of how poor the business’s overall systems and back-end were.

“We lost a lot of good people in our early years. And then one day we realised the secret. If we wanted to be a big business, we needed to act like a big business, and that started with a proper back-end, putting systems in place, and appointing account directors who had full control over their accounts.”

In a large corporate or agency environment this is obvious, but as a small business trying to save costs, it’s often forgotten. It requires an investment in what is seen as a non-revenue generating area, and it can’t work unless the business owners take a step back from the day-to-day functioning of the company.

“Two things happened simultaneously for us,” says Wessels. “We realised who we actually were as a company, and we put systems in place to support that.” This sounds so simple and obvious, but it’s easy for companies to get waylaid by the who, what and how of business.

In PHAT’s case, they are a brand activation agency that focuses on living media and variable media (or activations and events).

But the reality is that this is what they sell to clients. What they actually are is a massive employer of contract staff who activate or promote a brand and its products. The ‘how’ is then how well they manage people – they need to be trained, booked and managed. They’re the face of a brand, and they’re also an excellent collection point of data for the client.

Understanding all these things makes PHAT very good at what it does, but it also requires systems to operate smoothly. These systems encompass everything from ensuring activators are paid on time, and keeping their training and knowledge up-to-date, to supporting the company’s core full-time staff who look after client accounts and the activators.

“We can track our sudden massive growth curve to two things: We put systems in place, and we established a PHAT exco that gave our account directors and executives autonomy but held them responsible for their accounts. It was a complete game changer in our business,” says Wessels.

“We reward teams that excel, but let non-performers go.”

The systems took a three-day job down to 15 minutes. They also promoted a strong back-end, which is the backbone of any business. Sales and account executives bring in revenue, but they’re hobbled if they have no admin and HR support. The change in company morale and productivity was almost immediately discernable. But that was just the first step. PHAT’s real secret growth weapon is its exco structure.

“Our PHAT exco serves two key purposes,” explains Wessels. “It frees up myself and Chris to focus on high-level client service and strategy sessions, and it allows us to work on our own internal strategies. That’s obvious. What’s important to understand is that none of this works without real autonomy on behalf of your account directors, and with responsibility comes accountability.

“Our system is highly transparent and straight forward,” explains Wessels.

“Each account director has full financial and managerial control over their department. They’re given a budget to work with and targets to meet. We then have an exco meeting every second week to track those targets and change direction if needed. It keeps us in the loop, it ensures our account executives are keeping their eye on their targets and client delivery because they have to report back to us, and it means we can trouble shoot early.

“If targets aren’t being met, we evaluate why, and develop strategies to keep the account healthy. It’s vital that everybody understands what the deliverables and their duties are. If an account runs at a deficit, the strategy will be revisited and we will then develop the appropriate structural solution.

“Obviously this is done within reason – if a major client suddenly has to pull its budget for example, this isn’t necessarily the team’s fault, and we might move everyone into different positions and teams. We make sure they all know exactly what that pressure is and what they need to achieve.”

According to Wessels, transparency plays a big role in this strategy. “We share financial information with clients which allows us to show the client exactly what the agency makes versus what the client thinks the agency makes. In this way we can come to a mutually beneficial solution.”

However, a strategy that is so dependent on employees who are responsible, driven and accountable relies on getting the right people in. “This is obviously a challenge,” agrees Wessels.

“We like to employ leaders with entrepreneurial spirit, but these skills and responsibilities come at a price. But, we’ve learnt that in the long run it’s a price worth paying. Upfront investment ensures healthier client accounts, it’s that simple.”

However, Wessels does admit that people have left PHAT to start agencies of their own in the past. “If that’s their dream, it’s obviously a loss to us, but we always encourage their ambitions, support them, and give them any advice we might have. That’s the flip side of employing entrepreneurially-minded people, and we understand that. We’re realistic that people – like accounts – move on, and that we just need to make the most of them while they’re with us.”

Related: Getting Stupidly Enormously Wildly Excited About Ideas

“If you’re looking for a master/slave relationship, you’ve come to the wrong agency.”

Phat-brand-company_Entrepreneur Profile

“Many big corporates will treat their service providers like slaves if they let them. That wasn’t us. We wanted partnerships. It’s the best way to ensure your clients get the most from their campaigns because you’re able to offer them real advice, and even tell them when they’re dropping the ball,” says Wessels.

All good partnerships are based on relationships built on trust, and transparency is the foundation of trust.

“If you’re able to have in-depth, honest and up-front conversations about the business, you’ll be in a much better position to advise clients on what they need to do to achieve  the results they’re looking for,” says de Bod.

These principles extend to everyone understanding exactly what they’re getting from the partnership as well.

“We are very clear about our fees and what our clients are getting for their money,” says Wessels.

“I’ll present a document that shows our management fee, what it covers, our mark-up and percentage profit. Clients know exactly what our gross profit is, or what figure we’re trying to get to. Based on that, we can then offer them our services according to what they’re willing to spend.

“Ultimately, the profitability of an account defines the size of the structure that will support the account. More profit equals more ‘wow’, including exclusive versus non-exclusive structures and dedicated versus shared teams. We also all agree on the profit margin upfront.

“We understand that unless you value your own services and what you have to offer, you can’t expect your clients to value you. We’re in the business of helping our clients see real return on investment in their marketing strategy, but we’re also here to make a profit. We’re always very clear about it, and our question is always simple and polite: Would you run at a loss?”

PHAT also has client rules. “We won’t mess with the system. Don’t ask for a R1 million event in three days. This ruins our pipeline and affects our other clients. We value the service we give them, and that means we need to stick to our schedules. The only way you’re above that schedule is if you’ve got your own dedicated team.

“First, should we accept the brief it will push back all current work by two to three days. Second, the brief will more than likely not be done to the standard and quality that we normally deliver.

“If you take the two points into consideration, someone will lose out – either the current client or the new client. We follow a simple rule: Never let the money make the decisions.”

“You quickly learn when starting an agency that the more you give in to a client’s whims the less they value your input as a subject matter expert,” agrees de Bod.

“We’ve learnt over the past six years that open cards and total transparency allow clients to understand our reasoning. We’re subject matter experts in our industry, just like our clients are in theirs. They’re paying a fee for a professional service. We never negotiate on our quality and standards, just like a doctor would never negotiate on quality and standard when performing an operation.”

Vital Stats

  • Players: Rico Wessels and Christopher de Bod
  • Company: PHAT Brand Activation
  • Est: 2008
  • Growth stats:

2010: 32%     2011: 77%

2012: 81%      2013: 176%

  • Current turnover: R102 million
  • Projected 2014 growth: 80%
  • Contact: +27 (0)12 348 5070
  • Email: talk-to-us@phat.co.za
  • Visit: www.phat.co.za

 

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

Entrepreneur Profiles

How Bertus Albertse Overcame Adversity To Build A R80 Million Franchising Business

This is how an entrepreneur who is still under 30, and who launched Body20 from his living room when he was 24, has built a R80-million business that has just gone global.

Nadine Todd

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body20-franchise

Vital stats

  • Player: Bertus Albertse
  • Company: Body20 Global
  • Launched: 2013
  • Franchised: 2014
  • Turnover: R80 million
  • Visit: www.body20.co.za

At 29, Bertus Albertse has built a R80-million franchising business that launched in the US a year ago. He’s been an over-achiever since school, and his approach to business has been no different. Over the past 12 months however, there has been a personal shift in Bertus’ life and mindset. Just over a year ago, he realised that his childhood wasn’t something to be embarrassed about or buried. In fact, the adversity he’s lived through is a big driving force behind a need for control and success.

“It was a part of myself I’d never shared. I didn’t discuss it in school, and once I started training people and then building a business, I didn’t talk about it either,” says Bertus. “

You’re focused on giving people the best customer experience possible, and that means putting your best foot forward, all the time. Admitting you aren’t always sure of what you’re doing, that you aren’t as confident as you look, or that you’ve struggled and needed to overcome real hardships — that’s just not part of the package.”

Bertus is driven — he got good marks at school, was captain of any team he played in, and would train on Friday nights when everyone else was out having a party. This same drive has led him to learn as much as possible about business, and the more he read, the more he realised that one of the things top entrepreneurs have in common is the fact that they’ve shared their stories. Who they are and what they’ve been through are big contributing factors to their success.

“We’re made to believe that, to a large degree, our adversity is not part of what we project to the world. What do you tell a client that walks in, or a franchisee, or someone that has to be motivated on your team — do you tell them the worst part of your journey, or do you share something that will motivate them? This was always my approach. But the more I started accepting my story, the more I realised that the power of my story made me who I am today.

“Books like Simon Sinek’s, Start With Why, and A Storyteller’s Secret have had a massive impact on me. We shouldn’t ignore the fundamental things that have brought us to where we are today. Mindset, willpower, discipline, the ability to pick ourselves up when we fail — these are all critical success factors, and they’re all mental. If you want to build a strong business, you need to start with your mind. You need to know who you are, how you react to challenges, and why you are the way you are. Then you can harness your strengths, and hopefully work on your weaknesses — or at least be aware of them.

Related: The Wolf Within Bertus Albertse: Body20’s CEO

bertus-albertse-body20“Every time you solve a problem, it makes you realise there’s a bigger problem that you didn’t know you didn’t know. The things that you don’t know hurt you the most. This has been my biggest learning curve with franchising. You might know what it takes you to be successful, but what’s to say what it takes someone else to be successful? You’re now supporting other people who aren’t like you. The more honest you can be with yourself, and the more you can interrogate why you’ve been successful, and what lessons you can share with others, the higher everyone’s chances of success.”

It was within this context that Bertus realised the dangers of being placed on a pedestal. “When your success starts to grow, people naturally want to know more about you. What I found was that I’d been so busy putting my best foot forward, an assumption had grown that I knew everything; that I’d had everything in life, and that this had all been easy. The opposite was true. I knew that if I was going to inspire franchisees to believe in their own journeys, I had to let them into mine. Nothing comes easy. In fact, adversity can often be your greatest gift, provided you know how to harness it.”

With that understanding, Bertus started delving into his personal psyche, motivations, habits and the driving force behind his actions. It’s been an interesting journey, filled with pain and rewards. He now has a much stronger understanding of his personal motivations and actions though, and he’s sharing these lessons with fellow entrepreneurs.

From humble beginnings

Other than a good education, Bertus’s childhood years are characterised by having as little as you can possibly start with. His childhood is shaped by memories of the all-too familiar feeling of a car running out of petrol, or of his mother waking him and his sister up in the middle of the night, so that she could take them home for a few hours before returning them to their 24-hour créche before starting her next shift as a traffic cop. These were all factors that the future entrepreneur buried when he went to school, directing his energy into his studies and sports instead.

“There were so many things we couldn’t control growing up. My mother did the best she could do, but the reality was that we had very little. I realised that control was important to me, and that I could create my own success if I was disciplined, and so I focused on the things I could influence: My marks and how much I trained. I’d grown up watching a level of perseverance in my mom that influenced the way I viewed work as well.”

In fact, Bertus has a keen understanding of the various influences in his life and how they have shaped him. When he was nine years old, his mother married his step-father, and later, in his teenage years, he reconnected with his father. The men are vastly different in the way they view work and success, and yet Bertus learnt a lot from both of them — not necessarily to emulate either of them, but rather in what he wanted from life.

“Both the men in my life had started out without degrees. They worked and studied at night. They achieved success through sheer hard work — and they’d both been indoctrinated to work for someone else, because that gave you stability.”

For a kid who had known very little stability in his life outside of what he could personally control, working for someone else wasn’t very appealing, and his father agreed. “My father realised that if you truly want to be successful, you need to work for yourself. He really encouraged me to be an entrepreneur. One of the first things he taught me was ‘buy low, sell high, collect early, pay late’. That’s how you make money. It’s obviously not that simple, but it’s a good way for you to start thinking about business. I realised that if you’re good at something, don’t do it for free. That’s rule number one. Rule number two is understanding how you generate income and making sure that your income is higher than your expenses. But I didn’t know about assets and balance sheets and how to generate wealth at that point. I was just starting to think about what a business would entail.”

While his father was pro-entrepreneurship, Bertus’ step-father was the opposite. “My step-father is a careful man. He’s got a good job, but he’s also frugal. He doesn’t take risks, and he has no debt. He’ll buy a smaller car, but he’ll pay cash. That’s how he operates. He instilled extreme positivity in us, and always put family first, but watching him made me realise that I’m not risk averse. If anything, I have a high impulse and risk appetite. The combination of these traits can lead you to taking good risks, or bad risks — it’s all about where your focus lies. I’ve always been aware of that and tried to channel my energy into the good risks — areas of my life that I could grow, build on, and hopefully also create an avenue of wealth for others.”

For Bertus, the secret is discovering what motivates you. “I believe in living life to the fullest. I live freely. One of the first decisions I made when I started earning my own money was buying a car I couldn’t afford. This was 150% against the advice of both of my dads — but it motivated me and made me run. I ran for my life. I could have it easier, with less stress — I create stress for myself — but it keeps me focused and driven. There are so many influences around us all the time. You need to find what matters to you. Mostly it’s trial and error. That’s okay. Just keep looking for it — you will find the answers you’re looking for.”

A strong sense of self

Key to Bertus’ journey has been understanding, and to a degree mastering, his own triggers. This isn’t always possible — but the more you understand why you do what you do, the more you can learn to harness that energy.

“I grew up in an OCD household. It was always fine, because I’m also OCD — I didn’t realise how much until I got to hostel and discovered it wasn’t normal to never want to sit on my perfectly made bed, or to shower for 45 minutes or brush my teeth for two hours. Sharing a room with other boys forced me to get rid of some of those habits, and I needed to channel that desire for control elsewhere, so I shifted it to sports and academics.

“This level of discipline is still massive for me, even today. I measure my day on zero to 100 every day. And each new day I’m back on zero — it doesn’t matter how productive I was the day before, or how big a deal we closed. I feel a sense of urgency to make extraordinary things happen today, each and every day.”

Related: Join The Fitness Revolution

This sounds positive, but it has a dark side as well. “If I don’t wake up at 5am to start dealing with emails I feel like I’ve started on the wrong foot, which quickly makes me spiral and feel like a failure,” Bertus explains. “I’ve had to find ways to balance my OCD nature. I can be very disciplined, but if I start spiralling, I’m the most unproductive person on the planet. I need to keep myself in check.”

To find that balance, Bertus has learnt to choose his battles. “I can be very obsessive about one thing, and care nothing about something else. I can’t be obsessed about everything, so I have to choose where my obsessions will lie. I try and make these as positive as possible, focusing on training and supporting my clients and now franchisees.”

Bertus might be OCD, but self-discipline is a muscle just like any other — the more you work it, the stronger it becomes. “For me, it’s all about directing my energies to the right place. For other entrepreneurs, it’s choosing where they can make the greatest impact, and then being consistent in their efforts. Routine is everything.”

Bertus does have a caveat though: “Discipline alone, with no clear direction, can actually be a bad thing. You can easily become too focused on things that don’t drive success.”

24 And taking risks (to reap the rewards)

bertus-albertseBertus has never been employed. He started out self-employed while still at university. He chose to discontinue his studies and dive into entrepreneurship instead, opening a supplements store in Cape Town. “As an underweight kid I’d taken supplements to get my weight up. That, combined with training, was where my expertise lay.”

But Bertus knew it wasn’t enough. “I was just making ends meet. What I had wasn’t a wealth building mechanism at all. I wanted to make a bigger impact in my own life, and in the lives of my clients. I believed a more holistic approach focused on training was a way to do that.”

Bertus wasn’t alone. He was 24 years old, and had a young wife and three children, one of whom was from his wife’s previous relationship. Given the risks involved in trying something new, many people would have stuck with the business opportunity that wasn’t a significant success, but that was paying the bills.

Bertus had different plans. “You need to run for your life,” he says. “That stress, the risks involved — they’re what drive me. I always tell our young trainers that if they really want to be successful, they need to move out of their parents’ homes. The most basic necessities should be at risk. There’s nothing like fear to motivate you.”

With this in mind, Bertus launched Body20 from his living room in 2013. He had

R85 000 in an Allan Gray investment fund that he’d started while he was still studying. He decided the time had come to draw that cash, but it still wasn’t enough. A friend had introduced him to Electro Muscle Stimulation (EMS) technology, and the whole set-up was R220 000. Luckily, this friend believed in the concept, and agreed to invest in Bertus’ business idea. “I paid the loan back within a year, but he was really investing in the purpose, and he and his wife received free training. It was exactly what I needed to get me started.”

Related: From Body20 Member To Franchisee Of The Year 2017

From the word go, Bertus understood a key element that would ultimately lead to Body20’s success: When it comes to EMS technology, the tech itself isn’t a differentiator. “There’s no exclusivity,” Bertus explains. “There are multiple tech providers available, and no one holds patents. There were also already competitors in the market, so I knew this wasn’t my competitive advantage.”

What Bertus also recognised was that the players in the market were focusing on their offerings as niche. He believed it could be a more mainstream addition to training programmes, working in conjunction with conventional gym sessions, and to help pro and amateur athletes prepare for big events. He went in with a different differentiator in mind: Service.

“At the time, I just wanted to move out of my living room and into a studio. I had no plans to franchise. I believed that my passion and willingness to serve would set me apart.”

And it did. “My clients saw how much I loved what I did, and they started asking me how I’d started out. They were intrigued by the lifestyle I lived — yes, success was growing, but I was also living my passion. That drew them.”

Slowly, Bertus’ clients started enquiring about franchising opportunities, and the idea started to take shape that not only was franchising an opportunity to scale the business, but it would help Bertus to share his passion with others, empower them and provide them a means to also build wealth.

The shift to franchising

Franchising has been an incredible experience for Bertus and Body20 has gone from strength to strength, growing from one studio in 2013, to franchising in 2014 and encompassing 38 studios in early 2018, including three studios in the US. But there have also been a multitude of lessons for the young entrepreneur to learn.

“Franchising as a growth strategy has never been about the capital — if that was the case, we could be a corporate that raises funds through investors. But this is a service business, and that means you need someone in the studio who is passionate about the business and their clients, and franchising enables that. We want to create opportunities for other people. This means supporting franchisees, and in some cases, even investing in the right operators who don’t have the capital to set up their own stores.”

The shift from studio owner and personal trainer to franchisor has not been without its own significant growth hurdles.

“The most interesting lesson I’ve learnt is that franchising is a completely different business model to operating your own business,” says Bertus. “That’s the problem; there’s no one bridging the gap for you. You can go to a franchise attorney to draw up your franchise agreement, but that doesn’t tell you how to operate your franchise. How do you suddenly put up an operational infrastructure to support other people to be as successful as you, when you don’t yet know what they need? It’s difficult to know what someone else needs in their business, even if it’s the same business that you were in.

“Everyone comes at business from a different perspective. We’re all indoctrinated in different ways. I had momentum in this industry. How do you carry that through to someone else who is a mechanic, an attorney, a teacher, or a CA? What do they each need? How do different studios operate in different areas? There are so many variables to consider, and we didn’t always get them right.”

Related: Healthy Body20 Franchise Leads To Happy Hearts

Bertus understood he knew nothing about franchising — but he had no idea of the lessons that lay in store for him until he took the plunge. “This is the biggest difference between corporate and entrepreneurship,” he says. “In a corporate environment, you get clarity first, before you take action. In entrepreneurship, you only get clarity through action. You only know where you’re going once you start moving — clarity comes from doing.

“When you start taking action, you’re already on the path to finding answers — you’re hitting the problems you’re going to encounter, which gives you the opportunity to find the solutions you need to keep moving forward. You won’t always get it right — the path to successful business is littered with failures, but you can’t overcome obstacles unless you’re encountering them.”

One of Bertus’ biggest learnings has been that effort alone isn’t enough to carry you through. “I used to believe that effort equals success in battle,” he says. “This was my guiding mantra — that if you worked hard enough, anything was possible. Franchising took me from being a sole operator to a business owner, and I now know that effort equals a lot of work and a lot of lessons learnt, but that you’ll still get nowhere if you don’t have a solid strategy in place.

“Success equals strategy plus effort. Busyness and success are not the same thing, nor are busyness and effectiveness. Effectiveness happens when you’re busy with the right strategy. This has been huge for me — finding the balance between strategy and effort.

“In 2014 I used to receive no less than 100 phone calls a day. I had to deal with clients, solve franchisee problems and be available for all the people looking for me hourly. I used to think ‘how do you upscale from this?’ I couldn’t take any more calls and I didn’t have a second of the day to think about anything other than getting back to people. I knew I needed to have those problems — if you don’t, you’re not on the right wicket, but how do you upscale from taking a hundred calls to five calls?

“I once had someone tell me that the day would come when I wouldn’t receive a single call. I just thought they didn’t understand my business. After all, my primary role is sales and marketing — how could I not get that many calls? I still believed that effort equalled income. The moment I started focusing on strategy though, this started shifting. With a focus on strategy came systems, processes, well-documented operations. These all empowered people, and the ‘busyness’ started to fall away. I started to find the time to work on key areas that would drive the business forward. My phone didn’t ring as much, because there were systems and processes in place that meant the entire operation was starting to flow. I’ve learnt that the more successful you are, the less busy you’ll be. This doesn’t mean you work less, just that you do less busy work. It’s replaced with focused, strategic work. When you’re busy, you’re just dealing with what’s in front of you. A strategic focus is looking at three, five and ten years down the line.”

Going Global

Body20’s next big growth move has been into the United States. “Like any growth strategy, we’ve had highs and lows, and we’ve needed to learn a lot of lessons,” says Bertus.

“The interest and uptake has been incredible, not just within the US, but from local entrepreneurs looking to expand into international markets as well.”

At the time of going to print, Body20 had already sold three franchises in Florida, with another four in the works. These have brought strong capital contributions into the business as a whole, but not everything has been smooth sailing.

“On the one hand, the first store broke even within four months, when our projected time frame was eight months,” says Bertus. “That’s incredible. But we’ve also learnt that no two markets are the same.

“South Africa is geared for business. We love it here. We sell a lease and the studio can be open within three weeks. There’s no permitting, no inspections, none of that exists here. The US on the other hand is an extremely regulated environment. For example, we signed a lease in February 2017, expecting to be open in June and excited about a great leasing deal that gave us four months’ beneficial occupation to set up the store. Except it took us nine months to get up and running.

“In South Africa, this would have taken us under a month. It was an expensive lesson. Not only were we burning through cash, but the franchisee needs to stay motivated while you wait. The project flow and milestones are inherently different.”

From a franchisor perspective, operating across two continents also has its challenges. “We’re essentially selling our time. This is a services business, and our clients are our franchisees. What we didn’t take properly into account when we started was the incredible travel times involved in doing business in the US. It took us 20 hours just to get to Miami, and a further six to California. You have to factor in all that time when you’re planning your schedules. It’s been a huge adjustment.”

That said, it’s also clearly been a rewarding one, and Body20 is still only just getting started.


TOP TIPS

  • Clarity comes from action. You need to start to figure out what you need to do next.
  • Success is the result of effort plus strategy. Effort alone won’t get it done.
  • Systems and processes are essential if you want to move from ‘busy’ work to strategic work.

 

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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.

FedEx

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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

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.

Nadine Todd

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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.

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

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.

Related: Zuko Tisani Learnt These 7 Invaluable Lessons On His Path To Success

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.

Related: Self-Made Millionaire At 24 Marnus Broodryk On How To Build A R1 Billion Business

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.

Related: Entrepreneurial Powerhouse TBO Touch On How Success Is Built From Small Acts

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.

Related: Shark Tank’s Romeo Kumalo Weighs In On High-Impact Entrepreneurial Businesses

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.


Related: Watch List: 50 Top SA Small Businesses To Watch

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