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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

Richard Branson’s ABCs Of Business

Throughout the year, the Virgin co-founder shared what he thinks are the essential elements to success.

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If there’s one thing Richard Branson knows, it’s how to run a successful business.

Throughout last year, the Virgin founder shared what he thinks are the keys ingredients to building a successful company with each letter of the alphabet, which he slowly revealed through the 365 days.

From A for attitude to N for naivety to Z for ZZZ, check out Branson’s ABCs of success.

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Lessons Learnt

How Reflexively Apologising For Everything All The Time Undermines Your Career

How can you inspire confidence if you are constantly saying you’re sorry for doing your job?

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I’m one of those weird people who gets excited about performance reviews. I like getting feedback and understanding how I can improve. A few years ago, I sat down for my first annual review as the director of communications for the Florida secretary of state, under the governor of Florida.

I had a great relationship with my chief of staff, but I had taken on a major challenge when I accepted the job a year prior. I didn’t really know what to expect.

Youth takes charge

I was 25 at the time, and everyone on my team was in their thirties and forties. I came from Washington, D.C., and was an outsider to my southern colleagues. I was asking a lot from people who had been used to very different expectations from their supervisor.

I sat down with my chief of staff who gave me some feedback about the challenges I had tackled.

She then paused and said to me, very directly,”But you have to stop apologising. You must stop saying sorry for doing your job.”

Related: 8 Valuable And Inspirational Web Series You Should Check Out

I didn’t know what to say. My reflex was to reply sheepishly, “Umm, I’m sorry?” But instead I immediately decided to be more cognisant of how often I said I was sorry. Years later, her words have stuck with me. I have what some may consider the classic female disease of apologising. When the New York Times addressed it, five of my friends and past coworkers sent it to me.

In it, writer Sloane Crosley got to the heart of the issue:

“To me, they sound like tiny acts of revolt, expressions of frustration or anger at having to ask for what should be automatic. They are employed when a situation is so clearly not our fault that we think the apology will serve as a prompt for the person who should be apologising.”

Topic of debate

I’ve talked at length with other women trying to figure out this fine balance. The Washington PostTime, and Cosmopolitan have all tackled this topic. Some say it’s OK to apologise; others criticise those who are criticising women who apologise. Clearly, I’m not alone in dealing with this issue. In fact, I’m constantly telling the people I manage that by apologising they give up a lot of their power.

Related: Want To Feel Empowered? Check Out These 17 Quotes From Successful Entrepreneurs And Leaders

Here’s the bottom line: Don’t apologise for doing your job.

If you’re following up with a coworker about something they said they’d get to you earlier, don’t say, “Sorry to bug you!” If you want to share your thoughts in a meeting, don’t start off by saying, “Sorry, I just want to add…” If you’re doing your job, you have absolutely nothing to apologise for.

That’s what I think. And I’m not even sorry about it.

This article was originally posted here on Entrepreneur.com.

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Lessons Learnt

10 Quotes On Following Your Dreams, Having Passion And Showing Hard Work From Tech Guru Michael Dell

If you’re in need of a little motivation, check out these quotes from Dell’s CEO, founder and chairman.

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There’s much to learn from one of the computer industry’s longest tenured CEOs and founders, Michael Dell. As an integral part of the computer revolution in the 1980s, Dell launched Dell Computer Corporation from his dorm room at the University of Texas. And it didn’t take Dell long before he’d launched one of the most successful computer companies. Indeed, by 1992 Dell was the youngest CEO of a fortune 500 company.

Dell’s success had been long foreshadowed. When he was 15, Dell showed great interest in technology, purchasing an early version of an Apple computer, only so he could take it apart and see how it was built. And once he got to college, Dell noticed a gap in the market for computers: There were no companies that were selling directly to consumers. So, he decided to cut out the middleman and began building and selling computers directly to his classmates. Before long, he dropped out of school officially to pursue Dell.

Fast forward to today. Dell is not only a tech genius and businessman, but a bestselling author, investor and philanthropist, with a networth of $24.7 billion. He continues his role as the CEO and chairman of Dell Technologies, making him one of the longest tenured CEOs in the computer industry.

So if you’re in need of some motivation or inspiration, take it from Dell.

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