- Player: Maditsi Mphela
- Company: Mphela & Associates
- Established: 1986
- 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.
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?
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.
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.
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.
Scaleup Learnings From Our Top Clients – What The Most Successful Entrepreneurs Do Right
So, how do our successful clients move through these constraints to scaling up? We see four key drivers of success, and they are: people, strategy, flawless execution and finance.
You’re out of your start-up boots, staff is increasing, your client base is growing, revenue is up and you’ve proven your case to the market. Now it’s time to scale up. The challenges of this vital growth phase are different and it’s a time that demands different mindsets and different actions. In a world littered with small business failures, it helps to be well-prepared for scaling up using a proven methodology. At Outsourced CFO, we get an inside look at the success factors of our clients who are mastering the transition.
On the one hand, scaling up is a really exciting phase; this is what moves you into real job creation and making an impactful contribution to economic growth. On the other hand, it is really hard to scale up successfully. We see three major constraints that limit companies’ transition from start-up to scale-up:
The business has to have the leadership that can take it to the next level. When you start scaling up, especially rapidly, the founders can no longer do everything themselves. The team must grow and include new leadership talent that can take charge and execute so that the founders are working on the business instead of in the business.
The processes, procedures, networks, systems and workflows of the business all need to be scalable. This is imperative when it comes to your infrastructure for the financial management of your business. You’re only ready for growth when your infrastructure can seamlessly keep pace.
Scaling up demands more innovative marketing and storytelling so that you can more easily connect and engage with the new employees, clients, network partners, investors and mentors that need to come along with you on your scale-up journey.
Businesses that build a market conversation and a compelling brand narrative during their start-up phase are better positioned to have this kind of market access when they need to scale up.
It is critical to have the right people on your team. Our successful entrepreneurs have what it takes to attract, inspire and retain top talent. A strong team of smart, ambitious and purpose-driven people who love the company and want to see it succeed contribute greatly to a world class company culture. They are adept at communicating a compelling vision and establishing core values that people can take on. These entrepreneurs are tuned into the aspirations of their people and focus on developing leaders in their teams who can in turn develop more leaders.
It is planning that ensures that the right things are happening at the right times. At successful scale-ups strategies and action plans are devised to ensure that the most important thing always remains the most important thing.
Strategy includes input from all team members and setting of good priorities for the short, medium and long term. Goals are clear and everyone always knows what they are working towards. The needle is continuously moved because 90-day action plans are implemented each quarter to achieve targets and goals that are over and above people doing their daily jobs.
Top entrepreneurs are not just focused on what operations need to achieve, but how the business operates. They have the right procedures, processes and tools in place so that everyone can deliver along the line on the company’s brand promise. Frequent, quick successive meetings ensure the rapid flow of effective communication. Problems are solved without drama. There is no chaos in the office environment. Everyone is empowered to execute flawlessly to an array of consistently happy clients.
Everyone knows that growth burns cash. A rapidly scaling business faces the challenge of needing a scalable financial infrastructure to keep the company healthy. Our successful entrepreneurs pay close attention to finance as the heartbeat of the business, ensuring that everything else functions. They look at the tech they are using for financial management and for the ways that their financial systems can be automated so that they can be brought rapidly to scale. The capital to grow is another vital finance issue.
The best way to finance a business is through paying clients on the shortest possible cash flow cycle. However, when you are scaling up and making heavier investments in the resources you need for growth, it is likely that you will need a workable plan for raising capital. Our scale-up clients know the value of accessing innovative financial management that provides high level services to drive their business growth.
Navigating the scale-up journey of a growing private company is one of the hardest but most rewarding of careers to pursue. Having people in your corner who have been through this journey before helps take a lot of pain out of the process. No growth journey looks the same, but there are tried and tested methods that will – if applied diligently – lead to definite success. Happy scaling!
That Time Jeff Bezos Was The Stupidest Person In The Room
Everyone can benefit from simple advice, no matter who they are.
When you think of Jeff Bezos, a lot of things probably come to your mind.
You likely think of Amazon.com, a company he founded more than twenty years ago, that’s completely disrupted retail and online commerce as we know it. You probably also think of his entrepreneurial genius. Or the immense wealth that he’s built for himself and others. You may also think of drones, Alexa and same-day delivery. Bezos is a visionary, an entrepreneur, a cutthroat competitor and a game changer. He’s unquestionably a very, very smart man. But sometimes, he can be…well…stupid, too.
Like that time back in 1995.
That was when Amazon was just a startup operating from a 2,000 square foot basement in Seattle. During that period, Bezos and most of the handful of employees working for him had other day jobs. They gathered in the office after hours to print and pack up the orders that their fast-growing bookselling site was receiving each day from around the world. It was tough, grueling work.
The company at the time, according to a speech Bezos gave, had no real organisation or distribution. Worse yet, the process of filling orders was physically demanding.
“We were packing on our hands and knees on a hard concrete floor,” Bezos recalled. “I said to the person next to me ‘this packing is killing me! My back hurts, it’s killing my knees’ and the person said ‘yeah, I know what you mean.'”
Bezos, our hero, the entrepreneurial genius, the CEO of a now 600,000-employee company that’s worth around a trillion dollars and one of the richest men in the world today then came up with what he thought was a brilliant idea. “You know what we need,” he said to the employee as they packed boxes together. “What we need is…kneepads!”
The employee (Nicholas Lovejoy, who worked at Amazon for three years before founding his own philanthropic organisation financed by the millions he made from the company’s stock) looked at Bezos like he was — in Bezos’ words — the “stupidest guy in the room.”
“What we need, Jeff,” Lovejoy said, “are a few packing tables.” Duh.
So the next day Bezos – after acknowledging Lovejoy’s brilliance – bought a few inexpensive packing tables. The result? An almost immediate doubling in productivity. In his speech, Bezos said that the story is just one of many examples how Amazon built its customer-centered service culture from the company’s very early days. Perhaps that’s true. Then again, it could mean something else.
It could mean that sometimes, just sometimes, those successful, smart, wealthy and powerful people may not be as brilliant as you may think. Nor do they always have the right answers. Sometimes, just sometimes, they may actually be the stupidest guy in the room. So keep that in mind the next time you’re doing business with an intimidating customer, supplier or partner who appears to know it all. You might be the one with the brilliant idea.
This article was originally posted here on Entrepreneur.com.
How Sureswipe Built Its Identity By Building A Strong Company Culture
Culture is unique to a business, it’s the reason why companies win or lose.
A company’s culture is its identity and personality. Since this is closely linked to its brand and how it wants to be viewed by its employees, customers, competitors and the outside world, culture is critical. The challenge is understanding that culture contains unwritten rules and that certain behaviours that align to the culture the company is nurturing should be valued and cherished more than others.
At Sureswipe, the core of our culture is that we value people and what they are capable of. We particularly value people who are engaged, get on with the job, take initiative, are happy to get stuck in beyond their formal job descriptions, and who sometimes have to suck up a bit of pain to get through a challenge.
We include culture in everything we do, so it’s a fundamental element in our recruitment process. In addition to a skills and experience interview, each candidate undergoes a culture fit in the form of a values interview. We look for top performers who echo our core values (collaboration, courage, taking initiative, fairness and personal responsibility) and have real conviction about making a difference in the lives of independent retailers. If we don’t believe a candidate will be a culture fit, we won’t hire them.
If we make a mistake in the recruitment process, we won’t retain culture killers, even if they are top performers. This is such a tough lesson to learn, but it liberates a company and often improves overall company performance.
Culture should be cultivated, constantly communicated and used when making decisions. At Sureswipe, we often talk about what it takes to win and have simplified winning into three key elements: A simple, yet inspirational vision; the right culture; and a clear and focused strategy. The first and third elements can be copied from organisation to organisation. Culture on the other hand is unique to every business and can be a great influencer in its success.
Catch phrases on the wall are not the definition of culture
A strong culture is purposeful and evolving. It’s what makes a company great, but also exposes its weakness. No company is perfect and it’s important to acknowledge the good and the bad. Without it, we cannot ensure that we are protecting and building on the good and reducing or eradicating the bad.
Mistakes happen. That’s okay. But we are very purposeful about how mistakes are handled. Culturally we’re allergic to things being covered up or deflected and have had great learning moments as individuals and as an organisation when bad news travels fast. It’s liberating to ‘tell it like it is’ and almost always, with a few more minds on the problem at hand, things can be rectified with minimal impact.
Culture should be built on values that resonate with you and that you want to excel at. In our case, some are lived daily and others are aspirational in that we’re still striving for them. In each case we genuinely believe in them and encourage each other to keep living them. This increases the level of trust within the team, as there is consistency in how people are treated and how we get things done.
We are always inspired when, after sitting in our reception area, nine out of ten visitors will comment on the friendliness of staff. We hear their remarks about how friendly the Sureswipe team is or a potential candidate will talk about the high level of energy and positivity they experience throughout the interview process.
These are indicators that our culture is alive and well. It’s these components of our culture — friendliness, helpfulness and positivity — that cascade into how we do business and how we treat our customers and people in general. Being able to describe your culture and support it with real life examples is a great way to communicate and promote the type of behaviour that is important and recognised within the organisation.
Culture doesn’t just happen
We are fortunate that culture has always been important to us, even if it wasn’t clearly defined in our early days. As we grew it became important to be more purposeful in the evolution of our culture. About four years ago, the senior leadership team and nominated cultural or values icons were mandated to relook all things cultural.
A facilitator said to us, “You really love it when people take the initiative, and get very frustrated when they don’t.” That accurate insight became core to our values. We love to see people proactively solve problems, take responsibility for their own growth, initiate spontaneous events, change their tactics or implement new ideas. It energises us and aligns to the way we do business.
We celebrate growth and love to see our staff getting promoted due to their hard work and perseverance. We recently had one of our earliest technicians get promoted to the Regional Manager of Limpopo. It was one of the best moments of 2018.
Be purposeful with culture, describe it, communicate it and use it in all aspects of business. Culture should change. Don’t allow phrases like ‘this is not how we do things,’ or, ‘the culture here is changing,’ to stifle the growth and development of your culture. When done correctly change is a good thing. Culture is driven from the top but at the end of the day it’s a company-wide initiative. Design it together with team members from different parts of the organisation to get the most from it. And then make sure everyone lives and breathes it.
The best ROI is achieved when you stop wasting money.
Peter Drucker once said that businesses have two main functions — marketing and innovation — that produce results. “All the rest are costs.”
If you agree, that means that the average business has a lot of fat to trim. Obviously you can go overboard trying to cut costs too. My philosophy has been to look at some of the general areas where you can add some efficiency but not at the expense of impairing your most valuable resource — your focus.
The following cost-cutting measures will do that. Think of these as adding value to your company, whether it’s time, creativity or a closer connection to your consumers.
Uncover inefficiencies in your process
This is where I begin. In fact, it was analysing the inefficiencies of legal communication and knowledge sharing that led me to create Foxwordy, the digital collaboration platform for lawyers. I noticed that attorneys in our clients’ legal departments were drafting new documents from scratch when they could pool their knowledge and save time by using language that a trusted colleague had employed in a similar document. Business is all about process. When you create a new process, or enhance an existing process, you will drive cost efficiency.
Refine your process, then automate
If existing processes are lacking, it is time to create process. If you have processes, but they are not driving efficiency, it’s time to redefine your process. Either way, a key second step is refining processes that are needed in your business. Only then can you go to automation, since automating without a process will result in chaos — and won’t save time or money. Similarly, automating a poor process is not going to give you the cost-saving results you are looking for.
Thanks to the Cloud, there are very accessible means of automating manual processes. For instance, you can automate bookkeeping functions with FreshBooks and use chatbots to interface with clients — for very basic information. If you’re a retailer, a chatbot on your site can explain your return policy or address other frequently asked questions. Automating such processes allows you to spend more time focusing on clients and customers. Technology alone isn’t a panacea for all business functions, but if you find something you’re doing manually that can be automated, take a look and consider how much time and process definition automation would save you.
Rethink your outreach
Marketing and outreach are usually big and important challenges for an organisation. In my experience, there are two main components to successful marketing — knowing your customers and using the most effective media to spread your message. For the first part, I recommend polling. There are various online survey services that offer an instant read on what your customers are thinking. You may think business is humming along, but a survey could reveal that while consumers like your product, a few tweaks would make it even better.
For the second part — marketing messaging — once you have a firm idea of your marketing messaging, Facebook is a great vehicle for outreach. The ability to granularly target customers and create Lookalike audiences (from around 1 000 consumers) can help grow your business.
Scrutinise your spend history
There are tools that can help you assess spend history and find cost-cutting opportunities. For example, you might be able to take advantage of rewards or loyalty programmes to reduce common business expenses, like travel, or consolidate vendors for a similar function. If you have a long-standing relationship with a vendor, negotiate better pricing.
The most important elements to keep in mind are resources that make your company special. Your company may be built on one person’s reputation and expertise. Guard against tarnishing that reputation with inappropriate messaging in advertising or social media. If your company’s special sauce is intellectual property, protect that too. But everything else — ranging from physical property to salary and benefits — are costs and should be considered negotiable. — Monica Zent