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Form Follows Function With South African Interior Design Company, Form Design

In only its fourth year of operation, Form Design is on track to generate R25 million in revenue this year. What makes this particularly impressive, is that the company is able to do this while generating very few expenses. Founders Tashi Krost and Ricky Silberman don’t even have any employees.

GG van Rooyen

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Vital Stats

  • Players: Tashi Krost and Ricky Silberman
  • Company: Form Design
  • Established: 2012
  • Contact: formdesign.co.za

In 2012, Tashi Krost came up with the idea of creating a small interior design firm that could offer a bespoke service to clients who didn’t have the budget (or inclination) to make use of a large design firm. So, she started Form Design alongside her brother, Ricky Silberman, who came on as CFO.

With a solid background in design and a good eye, Tashi’s designs quickly garnered attention. The first year, the company managed about R1 million in revenue — by the third year, this had ballooned to R15 million.

Despite this phenomenal growth, the siblings have managed to keep things impressively lean. Form Design doesn’t even boast any permanent staff. How have they managed this? Here are their secrets to running a lean and lucrative operation.

1. Choose your partner wisely

As mentioned, Tashi Krost has a background in design. Her brother Ricky Silberman, meanwhile, completed a BCom in entrepreneurship, and has a real passion for numbers and problem-solving. This combination of Krost’s flair for design and Silberman’s head for numbers turned out to be crucial to the success of Form Design.

“If I had been on my own, the company would have failed in its second month,” laughs Krost.

“As a designer, my tendency is to try and make a space look as great as possible, which often means not paying attention to the bottom line. Ricky pays attention to the numbers and makes sure that every design solution makes good business sense.”

Lesson: As the adage goes: Great founders often come in pairs. Very few people have all the attributes needed to make a success of a business on their own, which is why it is important to find a partner who adds the knowledge and skills you lack. This is as true of hiring high-level managers as it is of selecting a co-founder.

Related: What The Concept Phase Really Means To Alex Van Tonder

2. Keep your overheads low

Form-design-interior-design

Most young companies struggle to resist the temptation of swanky offices who’ll impress clients and new employees that’ll help lighten the workload.

“From the beginning, we made the decision to keep things simple. Fancy offices and staff make some people feel like they are running ‘a proper company’. They also believe that if you don’t have a fancy office, people won’t want to use them. We always believed that if we provided people with beautiful items and great service, the word would get out and people would choose us because of our product, and not our office,” says Silberman.

“Form Design has evolved immensely in scope, but we have kept our size the same,” adds Krost. “We have managed to keep our overheads small, which has been critical in maintaining our value offering. Every cent we save can be passed on to our clients, which means we can price very competitively.”

Lesson: A company such as Form Design doesn’t really need a fancy office. The founders spend most of their time at clients or at suppliers, so there is little need for office space. You need to make sure that every expensive purchase or investment (whether that be a large office or an Italian espresso maker) is truly justified and not driven by vanity.

3. Work smart

“There is a quote by Bill Gates that I absolutely love,” says SIlberman. “He says: ‘I choose a lazy person to do a hard job. A lazy person will find an easy way to do it.’ I think it is important to work smart, especially if you want to operate without staff. Outsource whatever you can, manage your time very well and implement robust IT systems.”

Lesson: Innovative IT systems now allow companies to, for example, capture data or generate documents with ease. What used to take hours can now be done in minutes. By working smart, a lot of time-intensive labour can be eliminated. Make sure that you know what IT solutions are available that can save you time and money.

4. You’re only as good as your suppliers

“As a designer, you are really only as good as your suppliers,” says Krost.

“They play a massive role in delivering on the promise that you make to your clients. We have an amazing team of suppliers who we work closely with. They have enabled us to offer a full turnkey solution. In the beginning, we only provided furniture. This has expanded to include all appliances, cutlery, towels, and even linen. We can provide everything down to the final detail. This really helps clients who are looking for a one-stop shop.”

Lesson: Choose your suppliers very carefully. They will have a massive impact on the success of your business. Opting for the cheapest supplier is often a bad decision. Find suppliers that are as committed to getting the job done as you are, and who add real value to your offering.

Related: How Majozi Bros Construction Built Their Business, One Brick At A Time

5. Local is lekker

Local-South-African-interior-designers

All of the furniture offered by Form Design is manufactured locally. For the founders, making use of local manufacturers was the only option that made sense.

“If you’re having thousands of items manufactured, making use of a company in China, for example, might make sense. For us, however, there really isn’t a business case for having items manufactured overseas. It wouldn’t offer meaningful savings,” says Silberman. “We also typically can’t afford to wait three or four months for items to arrive from the East. Our clients want things done quickly.”

Another advantage of a local manufacturer is that you have more control over commissioned items. You can make sure that things are manufactured as specified, and it’s easier to have items replaced if something goes wrong.

Lesson: There is nothing worse than opening a container and discovering what you received from an overseas supplier is not at all what you ordered. For this reason, having a local supplier can be a great advantage. Moreover, the current exchange rate is making local manufacturing look more attractive than ever.

6. Find a scalable niche

Scaling a service-oriented business can be hard, especially when operating without a large number of employees. There are, after all, only so many hours in a given day.

Form Design has found a clever solution to this limitation by focusing on turnkey solutions for investors purchasing furnished apartments that can be rented out. The company does traditional residential and corporate designs, but its focus for the moment is on upscale apartment developments that require furnishing. This allows the company to roll out a particular solution across dozens of units.

“Allowing people to purchase full furniture packs enabled us to reach those clients who were furnishing properties as investment propositions. In these cases, the owner wanted a higher return on their rental units but didn’t have the time or the design acumen to start furnishing a small apartment,” says Krost.

Lesson: It is important, especially within a service operation, to find ways in which your offering can be packaged to make it scalable. Taking on time-consuming one-off commissions will never be scalable — at least, not without hiring loads of experienced (and expensive) employees. Ask yourself how your offering can be packaged and rolled out multiple times.

7. Be firm about your terms

“A key decision we made early on was to not start a job without getting a 60% deposit. Cash flow is very important in an SME. Getting a deposit reduces your risk, and also ensures that the customer is invested. We’re not afraid to lose business because of it — these are our terms,” says Silberman.

“The biggest mistake you could make is letting the client bully you into a deadline or price. Stick to your lead times so that your product is never compromised. We would rather walk away from a job if we can’t meet the deadline, as hard as that is. We hate having clients who are disappointed, so it is about being honest with yourself about whether the deadlines are deliverable,” says Krost.

Lesson: Don’t be afraid to walk away from work if your terms aren’t met. Trying to meet a client’s unrealistic time or cost demands will only result in a product or service you’re not proud of, which will harm your brand in the long run.

Related: Vinny Lingham’s Views On Focus, Changing The World And Why You Should Give Some Of Your Business Away

Do this

Make a list of all the expenses in your business that aren’t having a direct impact on the quality of your service or product. Why do they exist? How can you get rid of them?

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Can Being Deceptive Help You Build Your Business? It Worked For These 5 Entrepreneurs

We’ve all told little white lies. But what about the big ones? What if telling them would bring your business success?

Jayson Demers

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We all commit little acts of deception, like saying we got stuck in traffic when we were really late to the meeting because we wanted to watch the last five minutes of a favourite TV show. Little white lies? I’ve told them. You’ve told them.

But what about big lies, the kind truly lacking in integrity – like misrepresenting your sales to a prospective investor?

Obviously, there are often severe consequences to lying. Depending on the context, you could lose the trust of a peer, break a professional relationship or even face legal action. Yet, despite these consequences, lying is more common in the entrepreneurial world than you might think.

Just take as an example these five entrepreneurs, who might not be as well known or successful as they are if it weren’t for some clever acts of deception:

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Three Habits That Underpin Entrepreneurial Success

Here are three powerful habits that will help you stay focused, define your entrepreneurial attitude and take your business from zero to hero.

Nicholas Bell

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Successful people and businesses don’t all share the same traits and commitments. Yes they all have managed to break barriers and achieve impressive goals. They’re the leaders, the movers, the shakers and the industry creators. However, not all entrepreneurs are created equal and their recipes for success can differ wildly.

Some swear by a three-hour run every morning followed by a nice salad and the bustle of busy work life. Others need an incredibly early start so they can spend time with their emails and focus on their business. Every entrepreneur has their  own secret tricks that keep them on the straight and successful narrow, but most share a few simple habits that are guaranteed to make a difference.

Here are three habits that will help you become better at business and at leading others towards long-term success:

1. Always be ready to change your assumptions

Many people are unable to change the assumptions they have about their business and its future as it evolves. No business model should be locked in cement and rigidly upheld, it will need to adapt and adjust as it grows and customer needs change. As an entrepreneur you need to understand this concept and be prepared to evolve and change in new directions and markets.

Related: Business Plan Format Guide

This also ties into failure. Do you understand why you failed at something? Are you aware that perhaps your business model is changing? Can you learn from these experiences? Can you adjust your business model, get better research, refine your ideas? If you are ready to take positive value out of these moments and experiences, then you are an agile and inspired entrepreneur.

2. There’s no off switch

Passion and commitment are absolutely key to the success of your business and your own personal growth. You can’t switch off or walk away or just take a sick day because you feel like it, not if you want to stand as an example to your employees or if you want to build a brilliant business.

It may sound trite and tired, but a work ethic is the single most important habit to have as an entrepreneur. You need to always hold yourself to the highest standards, commit to ethical practice and work harder than anyone else.

3. Take it personally

This doesn’t mean gentle sobs in your office when Susan from accounts ridicules your maths skills. If you take your business personally, then you are wrapping the skills learned in points 1 and 2 above into one cohesive whole – you are embedding your passion into every crevice of your company. Care about what you do, be passionate about what it stands for, and be prepared to fight for its life. The route from zero to billion-dollar business isn’t easy. If it was, everyone would be doing it.

Remember, the idea is only 1%. Sweat, work, commitment and focus are the other 99% of the success equation.

Related: 22 Defining Entrepreneur Characteristics

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Head Of Audi South Africa Shares His Top Lessons On Weathering The Storm In Turbulent Times

When the economy isn’t playing ball, it’s time to roll up your sleeves, face your challenges head-on, and get to work, says Head of Audi SA, Trevor Hill.

Nadine Todd

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Vital Stats

  • Player: Trevor Hill
  • Position: Head of Audi South Africa
  • Visit: www.audi.co.za 

“In everything we do, across the organisation, we ask this question: Is it the best? That’s our value proposition. Without it, we don’t have a clear direction for everyone to follow.”

Some of the biggest brands in the world are well-known for keeping things lean. Amazon is a prime example, where even Amazon-branded employee backpacks are reused. Many bloated organisations learnt the hard way in 2008 that if you aren’t efficient and focused on the bottom-line, you’ll struggle to survive in competitive and volatile environments. On the other hand, businesses that were already lean and flexible not only survived the recession — many of them actually thrived, mainly because they were far better equipped to handle new economic realities than their competitors.

According to research conducted by Bain & Co’s authors of The Founder’s Mentality, Chris Zook and James Lane Allen, 85% of the biggest growth challenges large-scale organisations face are internal. This doesn’t mean the economy and competitors don’t matter. But the way leaders and managers of those organisations react to economic and external stimuli does.

Trevor Hill, Head of Audi South Africa, is well-versed on the impact external stimuli can have on a brand — even an established premium brand like Audi South Africa. Economic and political conditions in South Africa have impacted consumer confidence, and the premium vehicle market has experienced year-on-year double digit declines over the past three years. “The premium market is almost half the size it was three years ago in South Africa,” he explains. “Consumer confidence, the high pricing of premium cars, and a general buying down trend have really impacted our market. Three years ago, we were selling close to 20 000 vehicles per year. Today we sell around 10 000 vehicles. You can’t ignore market conditions. You need to face them head on, and do what’s best for your employees, the brand and your consumers.”

Related: 10 Ways To Develop A Success-Oriented Mindset

Here are Trevor’s five lessons for weathering the storm so that your business and brand are well positioned when market recovery begins.

1. Have a clear value proposition that everyone understands and embraces

“We will never be the biggest in the South African market,” says Trevor. “Mercedes-Benz and BMW produce in South Africa and have an advantage over us in terms of export credits. If we can’t be the biggest though, we can focus on being the best. That is entirely within our control.

“Our ‘Best’ strategy says that we want to be the best organisation, have the best product, the best brand and the best customer service. Everything we do must be looked at through this lens – is it the best? If we host an event, have we chosen the best venue, event organisers and caterers? Does the look and feel match our standards? If we can’t be the best — we don’t do it.

“In everything we do, across the organisation, we ask this question: Is it the best? That’s our value proposition. Without it, we don’t have a clear direction for everyone to follow.”

2. Understand what’s in your control and then roll up your sleeves and get it done

The rate cut at the end of 2017 really helped the premium market towards the end of the year. The problem is that there are things you can control — such as running a lean organisation — and things you can’t control, such as whether or not there will be another rate cut. So how do you ensure a proactive culture rather than a defeatist mentality when times are tough?

“The spirit of Audi has always been to challenge boundaries, roll up our sleeves and forge our own future,” says Trevor. “It’s in our ‘Vorsprung’ DNA. This has never been more applicable than when we’re weathering a storm, but it has to be fostered when the waters are calm.”

The theory is straightforward. If an organisation isn’t used to challenging boundaries and being in control of its own destiny, it’s difficult to find those characteristics when they’re really needed. When something is woven into a brand’s DNA, it’s because it’s always there, and the organisation’s entire culture supports it.

Trevor can point to examples everywhere. For example, in the 1980s, Audi was the first car manufacturer to put a five-cylinder engine and four-wheel drive on a rally car, and cleaned up two years in a row as a result.

“The Audi spirit is that you can improve anything. You just need to be willing to put in the work.”

Faced with extremely tough local conditions, the South African team is now doing just that: Rolling up its sleeves and finding solutions.

“This is how we handle the business as a whole. We’ve been completely upfront with head office and our investors about current market conditions, but we aren’t complaining — we’re putting the facts on the table, showing them what we can control, and unpacking how we’re going to see the business rolling forward. Because of that attitude and transparency, we have everyone’s full support.”

3. Never throw money at a problem; smart solutions aren’t necessarily the most expensive

trevor-hill

“Spending a fortune on brand campaigns isn’t going to change the reality of the current market conditions,” says Trevor. “It’s easy to throw money at a problem, but then what? We’ve taken a different approach. We’ve selected a number of brand ambassadors whose values really align with our own. These include TBO Touch, Cameron van der Burgh, Wayde van Niekerk and Nomzamo Mbatha. Their followers know what they stand for, and associate Audi with those same values. It’s a much more targeted and niche way to gain awareness for our brand.”

For Trevor, not throwing money at a problem is a value that should be ingrained in an organisation. “We approached 2018 with this value top of mind. At the end of 2017 our management team went away for a strategy session. We collectively took a look at the entire business and asked what we needed to do to drive this business through the stormy waters of 2018.

“Each manager then got a target for their division that was aligned with the other divisions and organisation as a whole. They then conducted individual strategy sessions with their teams. The whole thing was a problem-solving mission: This is the budget we have, this is where our focus needs to be, now how do we go out and deliver the best? What’s our plan?

“These plans were then aligned with each other to ensure everyone was going in the same direction, and we measure everything. My KPIs filter down to the management team, and theirs filter down to their teams. It’s a very inclusive system; everyone can workshop the problem, and in that way we don’t only gather some out-the-box ideas, but we get everyone’s buy-in as well.”

Related: You Need This One Trait To Succeed In Reaching Your Goals

4. Encourage your team to try new things and communicate collaboratively

Very often, individual divisions communicate well together, but the message and camaraderie is lost across divisions, particularly between sales and marketing. “We’ve found two ways to encourage participation and camaraderie across the business,” says Trevor. “The first is that we always encourage new ideas. If something is tried and tested and doing well, especially in marketing, try to own that property. But if something isn’t giving you what you want, change it. We’re often too scared to change things that aren’t working or to try something new. We encourage participation and thinking differently. The bigger your pool of ideas, the more you have to work with.”

The company also has a number of monthly meetings that bring different divisions into the same room for workshop sessions. “We have a lot of field staff who aren’t often in the office. We need to keep communicating with them to pull them into the fold,” explains Trevor. “For example, once a month we have marketing and product meetings. The marketing, product and sales teams all attend. It gives everyone an opportunity to know what’s happening and hash out any questions or issues then and there. The communication between divisions — particularly marketing and sales — is much better as a result.”

5. Keep your core motivated

Like many industries, there’s a lot of employee movement in the consumer and premium brands segment. “People move. That’s the reality of job markets around the world,” says Trevor. But stability is important, and at Audi SA, that means identifying your core employees and keeping them happy.

“We have a very strong core. Within the organisation we’ve identified a core group of employees whom we absolutely need if we’re going to continue to run this business efficiently and successfully. Once you’ve identified your core, you need to keep them happy, and that’s about a lot more than their paycheque.

“Different people want different things — advancement, developing their careers, an opportunity to work abroad or perhaps spend more time with their families at home.”

The lesson? Figure out what’s important to each member of your core and try your best to give it to them. Success is a team sport — you need to keep that core team in your corner.


MAKING A SUCCESS OF NEW TERRITORIES

Trevor Hill began his career with Audi as an area manager in 1989. In 1997 he left South Africa to join Audi’s head office in Germany. Since then he has headed up divisions in Germany, Japan, China, Dubai and South Korea. One of the biggest lessons he’s learnt through his travels is that while there are certain business fundamentals that hold true everywhere, each culture has its own way of doing business, and you need to understand what that is on the ground if you’re going to make an impact and be successful.

“One of the biggest things I’ve had to communicate back to head office is that each territory operates slightly differently,” explains Trevor. “For example, in Germany, you have 100 days in any new job to prove yourself. If you don’t make something happen in those 100 days, you’re not seen to be successful. This is impossible in Asia, where business is all about relationships. You have to develop a relationship based on trust and honesty, and that doesn’t happen overnight. Until you have that trust though, your employees and customers won’t work with you. When you enter a new territory, take your time. The first year is all about understanding the lay of the land. In the second year you can implement your strategy, and in the third year you can start reaping rewards.”

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