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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.

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Lessons Learnt

Give Your Business The Best Chance Of Success

For that to happen an entrepreneur must distil the business’s reason for being and then doggedly pursue that vision.

Gil Sperling

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In my capacity as a business owner and venture capitalist, one of the questions I get asked most often by entrepreneurs is, “how do I ensure my business succeeds?” While there’s no straightforward answer, there are important elements that I believe every entrepreneur must consider to ensure the greatest probability of success.

Firstly, no business will succeed if it doesn’t solve a unique pain point or problem for modern consumers or businesses. However, even if a business is able to carve out that niche, there’s no guarantee that growth will follow. For that to happen an entrepreneur must distil the business’s reason for being and then doggedly pursue that vision.

North Star metric

This principle of having a clear business vision guides all my decisions. Whenever I need to validate a choice or a change in strategic direction, or if I’m trying to determine what to focus on, I always refer back to my vision. If the two are incongruent, then I know I need to change tack.

Elon Musk is a great example of a successful entrepreneur who is guided by his grand vision. Everything he does, from Tesla to SpaceX, pertains to sustainability, both for the planet and the human race. It might be hard to make the connection when you consider his various businesses out of context, but everything he creates fits into a broader ecosystem that in some way moves the needle towards his ultimate objective. Developing Tesla cars that run on renewable energy is but a small, short-term plan that feeds into his grand vision, yet it’s also been the catalyst for the evolution of the motoring industry.

Related: The Popimedia (Mega) Success Story

Be clear, concise

In the same way, every decision an entrepreneur makes should in some way take them a step closer to realising their vision. In this regard, it is also vital that your vision is crystal clear – a murky or undefined vision will divert you off your path to success.

That’s because you’ll tend to focus on the wrong things, especially when scaling rapidly, or when running bigger organisations, because there are many tasks to complete every day. A lack of clarity also leads to poor decision-making, or, worse, decision paralysis, and that’s business suicide – I’d rather make a bad decision than no decision at all, because it prompts action. However, with a clear vision, more often than not, those decisions will be correct.

Defining your vision

So, how do you know if your vision is clear and, more importantly, relevant and consequential? The way I stress test my vision is to evaluate it every day against the decisions I take, and the direction of the business. This daily process helps to sharpen my decisions over time.

The other step is to remain open-minded enough to accept and acknowledge criticism, and take on board advice from trusted confidants and impartial experts. This is important, because you need to craft your vision based on as much information as possible, including valid criticism.

Ultimately, though, your vision for the business should align with your purpose. Forget about money and turnover as points of departure when defining your vision. These are merely metrics that can determine the strength and effectiveness of your business strategy.

For each of my several business interests, be it VC funding or ad-tech innovation, I have different visions. Each are meaningful to me, but in every instance, I don’t wake up every day with the sole ambition of making money.

While I need to make money to grow these businesses, or build something new, having purpose and vision are the ways I pull through those inevitable challenging situations. Having your vision front of mind in everything you do helps you make better decisions, and makes the hardships easier to endure. It helps you see through the turmoil, because you know where the process will lead, and you always know where the ultimate objective lies.

Read next: A Comprehensive List Of Angel Investors That Fund South African Start-Ups

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Lessons Learnt

Jimmy Choo’s Co-Founder Explains Why There Are No Small Jobs

Tamara Mellon shares the strategy that has helped her find new opportunities throughout her career.

Nina Zipkin

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The co-founder of Jimmy Choo, Tamara Mellon, believes that you can find inspiration and opportunity anywhere. All it takes is determination to keep going and a keen eye for observation.

Mellon began her career in the early 1990s working as an accessories editor for British Vogue. Always on the hunt for up-and-coming designers, she came across Jimmy Choo, a cobbler working in London’s East End.

She would commission him to create shoes for fashion shoots. They were so well received by readers that the pair realised they could expand beyond one-of-kind pieces for the pages of the magazine.

This article was originally posted here on Entrepreneur.com.

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Lessons Learnt

6 Habits Long-Time Millionaires Rely On To Stay Rich

It’s a simple fact: Most millionaires have different habits than the average person. However, these habits are far from inaccessible; they improve one’s odds of finding success but can be adopted by just about anyone with a bit of concerted effort.

Timothy Sykes

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To take that idea one step further, once someone has become successful, how do they stay successful? Here, I’d like to take a slightly longer-sighted look at the habits of millionaires, focusing not just on the habits that make them successful but the ones that help them stay successful over time. By cultivating these habits in your own life, you’ll be investing in your own sustained success over time.

Here are six habits of long-time millionaires:

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