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How Maditsi Mphela Pushed Through Business Stagnation To Successfully Scale

Maditsi Mphela was admitted as an attorney in 1985 and started his own practice in 1986. While his practice was successful, it eventually started to stagnate. A new approach was needed to take it to the next level.

GG van Rooyen

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Vital stats

  • Player: Maditsi Mphela
  • Company: Mphela & Associates
  • Established: 1986
  • TURNOVER:
    • Year 1: R10 000
    • Current: R100 million
  • Visit: mphela.co.za

As a lawyer, Maditsi Mphela didn’t really think of himself as a businessman. But working for himself in his own practice, that was exactly what he was. He was a good lawyer, but he needed to figure out how to be a good businessman in order to grow his practice.

Law firms are essentially service-oriented businesses, and these are notoriously tricky to scale. Why? Well, unlike a super-scalable tech operation such as Facebook, Uber or Google, the acquisition of each new client adds complexity to a law firm.

Lawyers — like doctors or accountants, for example — are highly skilled professionals who need to spend a lot of time on each new case. Compare this to a tech operation where a new Facebook or Google user adds no complexity to the company involved.

You might be able to set up a successful practice, but how do you scale it?

Mphela found the answer by finding focus for the business. Instead of being a general practice, Mphela and Associates started focusing on personal injury cases and cases against the state. Entrepreneur spoke to him about how this fundamental change in his practice came about.

Related: 46 Facts You Should Know About Entrepreneurship (Infographic)

How has your business grown and evolved in the last 30 years?

I started my own practice on 1 September 1986 in Groblersdal. I was the first black lawyer in town. My business started as a one-man show and now boasts a staff complement of 48, excluding the partners.

The number of employees is expected to grow to around 60 in the next few years. It expanded significantly in 2002, when a branch office was opened in Pretoria. There was a need to reposition the business to access the growing client base and to facilitate access to the High Court, as our cases were mostly High Court matters. We have also grown our client base from one thousand to over 15 000.

How did you overcome the ceilings your company hit during its growth journey?

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The business was a general practice, and although it did okay, it started to stagnate eventually. I started looking at the business very closely. Why was it stagnating? How could I continue to grow it? Eventually, I concluded that we were wasting a lot of precious time on cases that demanded a lot of work, but offered meagre rewards. The solution was to reengineer the practice to focus on those areas of the law that yielded huge returns.

We started focusing on personal injury claims and claims against the state. We also broadened our client base by representing people who traditionally wouldn’t be able to afford legal services. This came about because of the passing of the Contingency Fee Agreement Act of 1997. Thanks to this act, we could now litigate on behalf of clients on a ‘no win no fee’ basis.

This meant that the client did not have to pay any money upfront, and we would only get paid if we won. This was risky, of course, but it offered the promise of large potential rewards. Without being willing to take on more risk, you’re going to struggle to grow your business. That said, we mitigated risk by looking closely at potential cases. We didn’t just accept anything that was offered to us. Instead, we chose cases where the prospects looked good. You have to be able to turn away business that demands too much time and effort, or where the risk greatly outweighs the reward.

What do you believe are some of the biggest barriers to growth?

The major barriers are funding and a shortage of skills. For any business to grow, it needs money and skilled people. This is especially true in a service business. We’ve grown Mphela & Associates successfully by hiring great people — lawyers who are very intelligent and productive.

You want to hire people who will be a true asset to the business. They may not come cheap, but they are worth it. It is all about return on investment. A great employee can do the work of three mediocre ones.

In addition to hiring good people, you also need money to improve the infrastructure of the business. In a law practice, or any other service business, you need to streamline things as much as possible.

Inefficiency leads to waste, so you want to make it as easy as possible for everyone involved to get the work done. To do this, you need to invest in technology that allows you to create effective systems and processes.

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

What growth advice have you received or used?

I’m a self-starter who has learnt a lot from his own mistakes. I’ve also been lucky enough to serve on the CSI Committee of SAB, as it was called then, and the Mpumalanga Parks Board. I learnt a lot there, specifically how to approach anything from a business standpoint.

You can’t get anything done if you don’t have the money to fund it. It’s a problem a lot of professionals have. We tend to think of ourselves as lawyers or doctors or photographers, and not as business owners. You need to approach and run your practice as a business.

Skill in your particular field is important, but you also need business skills. You need to know about marketing. You need to be able to create a business plan. You need a strategic vision for the company.

What have been the toughest aspects of your business to scale?

Scaling a business is a careful balancing act. In order to grow, we realised that we needed to significantly increase the number of clients we had, but we didn’t want to do this at any cost.

We still wanted to be selective in the cases we took on, and we didn’t want to reduce our overall success rate. It’s important to grow, but you want to manage that growth carefully. An aggressive marketing campaign will get you a lot of new clients, but is that actually good for the company? You don’t want to attract more business than you can successfully handle.

Don’t lose sight of what’s important. Don’t sacrifice a cost-effective system or healthy profit margins for rapid growth. It’s not worth it in the long run.

How do you stay motivated and focused on growth after all this time?

The more you succeed, the more appetite for growth you have, I believe. I have an insatiable appetite for calculated risk, and my vision is to make this practice one of the biggest in Africa. It is this drive that constantly pushes me on and keeps me focused on my next milestone.

Related: 10 Dynamic Black Entrepreneurs

How important has technology been in the growth of your business?

It’s been very important. This is interesting, since you’d think that the impact wouldn’t be that big when a large portion of your client base can’t afford a laptop or smartphone, but technology has found its way into every part of society. We get online leads via our website and official email every day.

We have also invested heavily in Google advertising to ensure that our name always pops up when someone is looking for specialty legal services. Marketing is very important, even to a large and established business.

Take Note

The key to growth, especially within service-oriented industries, is to find ways in which the time, effort and money you invest results in optimal returns.

GG van Rooyen is the deputy editor for Entrepreneur Magazine South Africa. Follow him on Twitter.

Lessons Learnt

How We Went From 0 To A Million In Sales In 6 Months

It became a numbers game. How Version Eight is winning 2018.

Jandre de Beer

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In November 2018, I left a very cosy position at a flourishing retail company in order to pursue my own destiny. Version Eight was born on 1 February 2018.

Everyone told me starting a business in today’s economic climate will be tough, and boy were they right. However, through a bit of luck, some hard work, and out of the box thinking, we managed to turn over our first million rand in sales within our first six months.

Now, for the record, hitting the seven figure turnover mark in six months is nothing to write home about, and that is certainly not the purpose of this article. The purpose of this article is to share our key ingredient with you so that you can possible achieve the same growth within your business, whether it’s an existing, new or business you are still dreaming about.

So, How Did We Do It?

The answer is quite simple, we did it through digital marketing.

Well, to be honest, not having had capital to spend on our own digital marketing at first, our first few clients were signed through cold calling as mentioned on the Big Small Business Show with Allon Raiz.

Only after signing our first three clients did we have some money to spend on online marketing services like Google Ads.

In Aug 2017, I wrote an article on this very website named “Beginners Guide to Digital Marketing in South Africa”. In the article I talked about the four fundamental pillars and how they form part of an effective digital marketing strategy.

We only incorporated three of the pillars, as one of them was more aimed at B2C businesses, and being an digital advertising agency meant we were B2B driven.

Related: There Is No Silencing The ‘Chatter’ Bots

1. Search Engine Marketing

If you read the guide, you will notice that search engine marketing was the number one pillar on the list, and with good reason.

In a nutshell, we knew that 90% of all online sales and enquiries started with a search engine and that is why it’s something we started implementing as soon as we could. In the beginning organic traffic was slow, so we spent a very small amount on search engine ads.

Having the knowledge and understanding how Google AdWords work, I strategically bid on keywords that indicated that someone was looking for digital marketing help.

We made sure to find keywords that got a decent amount of searches per month but didn’t have a lot of competition, and yes, these kind of keywords do exist, you just need to know how to find them. This meant that we ended up paying very little for leads that enquired about online marketing services.

2. Social Media Marketing

Next up was to start working on a social media strategy.

Again, not having had a lot of cash floating around, we thought LinkedIn would be the best place to start. The professional network is amazing for connecting with potential prospects and that is exactly what we did.

By connecting with the right people, being active on the platform and sharing knowledge on a weekly basis, it was only a matter of time before we started getting private messages of people and companies looking for digital marketing services.  Not to mention, this strategy was completely free.

3. Email Marketing

social-media-planAnother pillar I mentioned in the guide was email marketing. After cold calling prospects and finding the emails of key decision makers it became a numbers game. We knew that no one would know who we are and therefore we had to provide some form of value up front if we wanted to build some credibility.

Soon after we launched we created a Social Media Advertising Guide and all it was a 90 page PDF and 40 min video talking about social media advertising and how one can go about advertising on all the different platforms.

You can download our amended 2019 Social Media Ad Guide Here for Free.

As expected most recipients found it interesting but didn’t feel the need for our services, however, for every 50 people emailed, 21 would reply. And out of every 21 replies we about 1-2 meetings. Like I said, it became a numbers game.

Related: How Blockchain Will Disturb The E-Commerce Industry In The Next Few Years

WRAPPING IT UP

As mentioned earlier in the article, we did not end up using all four pillar (SMS Marketing), however, we’ve had great success with the above three.

In six months we did over a million rand in sales, and by the grace of God we are still growing, and you can too! I truly hope this article has opened up your mind to the power of digital marketing and if used correctly, and consistently, it can most definitely change your business for the better.

I do understand that not everyone is a digital marketing wiz, and for those I want to say, read, learn and experiment with online marketing as much as you can.

For those interested I would recommend doing a digital marketing course. Not only is it affordable, but it will allow you to scale your business.

Make sure to visit the Digital School of Marketing if you want to learn more about some of the best and accredited digital marketing courses around.

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Lessons Learnt

Blood, Sweat And Tears – The Journey To Becoming Emerging Entrepreneur Of The Year®

You see the awards, the magazine features and the highlight posts on social media. But building a successful business from the ground up is a really tough journey behind the scenes. Outsourced CFO co-founder Louw Barnardt opens up to Entrepreneur Magazine about what it actually takes.

Louw Barnardt

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I can tell you about all the exciting successes. I can mention things like two to twenty-six professional staff in under five years, more than R500 million in growth funds raised for SMEs, some notable awards and many other things that make the headlines. This is a part of the story and we do try to stop and celebrate the successes as we go…

What I would rather share with you are the trials and tribulations, the challenges and heartaches of the process of building a company. It is in this trail by fire that one learns the most about being a good entrepreneur. The most challenging of times often determine your path and hold the best lessons.

Blood

For me, blood represents the big losses. Bleeding financially is definitely a part of the journey. Very few companies have started up without some months or years of bootstrapping, of keeping it lean. For us, that meant continuing on articles salaries for more than a year after we had qualified. It took years to get to and exceed market salaries. This has been a painful sacrifice, but one that all founders need to make in order to get out of the rat race. Live a few years like no-one would so that you can live the rest of your life like no-one else can.

Relationships are also often counted among the losses. Many a time we have invested a lot into a staff member only to see them jump for a better deal. Many times people close to you try to steal ideas or copy direction. It hurts, but it has definitely been a reality.

Sweat

Sweat represents hard work. Outsourced CFO was built on many long hours of hard, focused work. We’ve made this fun by working from coffee shops on weekends or from the beach for a day. But hard work has definitely been a part of getting things to where they are today. Nothing worth building is easy. Don’t start a business if you want to work less!

Sweat also means stretching. Coming from a finance background, there are dozens of core skills that you need to teach yourself in order to be successful at business. Sales, marketing, public speaking, networking, people management, technology. It is a process of continuously stretching your mind and your abilities. Treat learning like a superpower!

Related: Seven SA Star Entrepreneurs Recognised At Premier Competition

Tears

Tears just refer to literal tears. I have yet to meet an established founder who has never come home after a ridiculously tough day to a good cry in the dark. The journey has massive emotional asks. Disappointment, rejection, temporary defeat (which feels like failure in the moment) and other experiences are a part of the game. You have to learn how to dust yourself off, refocus and keep moving forward. But sometimes it’s okay to just shed that tear. Heaven knows I have.

Fate has a cruel sense of humour

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The funny thing is that our biggest successes have very often been followed in quick succession with our biggest disappointments. The week we received the Premier’s award as one of the top two Emerging Companies in the province is the same week we had to postpone paying our own salaries. The month I came back from honeymoon early in our second year of business is the same quiet April that we had to seriously consider if we should continue with business. The list goes on! Business teaches you in a very real way to hold both the extremely high and extremely low moments at the same time.

Pivotal moments and the grind

In every young company’s story there are pivotal moments. Things that happen that change the game. I’ll share two of ours with you. At the end of the very April month mentioned above, we won the contract to become the national financial service providers to Microsoft’s BizSparks Program, allowing us to work with the top 10% of a pool of one thousand tech start-ups being incubated by Microsoft. This set us on a course to become the leading authority in the country on finance for tech start-ups.

Another such moment was the Fundraising Readiness Program that we ran with Investec, where we helped over a dozen private companies prepare for and pitch for growth capital. The brand association and fundraising processes that came from this also changed our trajectory. These pivotal moments change your game – but don’t take anything away from the weeks and months of hard grind in between them.

Entrepreneurship is a team sport

No great company has ever been built by one person. It takes a village to build a business. I have been blessed with two co-founders that I have been friends with for over a decade. Their work and support as well as that of our team (which include my sister Dore too) has been the secret sauce to our success. Don’t try to go it alone. Surround yourself with likeminded people who share in and contribute to your vision.

In summary

The road to building a successful company is a steep and rocky one. It is scattered with high mountains as deep valleys. You will need patience, dedication, willingness to sacrifice and a sincerely, fierce belief in your vision for the road. But if your why is big enough, you can get up every morning and make that dream a reality!

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SA Entrepreneur Takes First-Of-Its Kind Business To An International Level

Jo Farah shares some insights on his entrepreneurial journey as Global Entrepreneurship Week (GEW) gets underway.

Entrepreneur

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South African-born entrepreneur and creator of the world’s first environmentally friendly sneaker care product – Jo Farah says entrepreneurship has always been part of his DNA, and making a valuable contribution to society his ultimate goal.

The founder of Sneaker LAB – an innovative business that’s managed to create a first-of-its-kind, biodegradable sneaker care product, delivered his sentiments on entrepreneurship and his entrepreneurial journey as Global Entrepreneurship Week (GEW) kicked-off in 170 countries around the world this week.

Farah, who’s been mentored and groomed by his entrepreneur father, says developing a successful business has always been part of his life’s plan. And while he managed to establish a few start-ups during his entrepreneurial journey, which includes founding a guerrilla marketing agency in South Africa, and producing ads for the likes of Adidas, New Balance and Puma it still wasn’t enough.

After returning from the United States in 2008 with just one thing on his mind – to help cure South Africa’s conundrum by creating jobs for the unemployed, and in-turn fostering economic growth, Jo invented a one-of-a-kind sneaker care product, and put shoulder to the wheel to establish his business in 2013.

Related: How Lorenzo Escobal Bootstrapped His Way To Competing With Titans And Attracting Top-Tier Clients

sneaker-lab-founder-jo-farahStarting a sneaker care product range was a natural choice, especially considering Jo’s passion for sneakers, street wear and urban culture. He also wanted to create a complimentary product to accompany the list of sneaker brands that has inspired him over time. Jo’s work behind the scenes commenced in earnest and in no time he conducted enough research to support his theory – there was a gap in the market for branded sneaker care products. He knew that he was on a good wicket.

“There already was a range of non-branded products on the market, but my research revealed there was a healthy appetite for branded, environmentally friendly sneaker care products. That spoke directly to my business model,” he says.

Today, Sneaker LAB has placed Cape Town on the map with its premium global status – it’s the only sneaker care product range in the world to be Green TAG certified, environmentally friendly and biotech driven. Its products are water-based, readily biodegradable, and the packaging is suitable for recycling. The business also operates internationally, in 50 countries across Africa, with an experiential brand store in Braamfontein Johannesburg; as well as downtown Los Angeles in the USA; Asia and Europe.  The business is growing by the day, with a store in Tokyo set to open soon.

As an entrepreneur he’s grown in leaps and bounds, and despite many changes along the way, his sentiments on entrepreneurship remain.

“Inspiring potential entrepreneurs to develop an entrepreneurial mindset and embark on an entrepreneurial journey is one way of solving some of the world’s most critical problems, and freeing the economically marginalised,” Jo says.

Related: Two 20 Year Olds Reshape Entrepreneur Landscape With New Social Investment Platform

He urges young aspiring entrepreneurs with an entrepreneurial mindset to take the plunge and to channel time and energy into developing their business ideas into something tangible and workable that could generate good long-term financial returns.

“People will tell you that it can’t be done, but believe me, it can. All you have to do is to believe in your idea and to work hard and smart and you’ll reap the benefits,” Jo says.

 

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