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Levergy Founders Tell You How To Scale Quickly – And Intelligently

Founders Clint Paterson and Struan Campbell explain how they’ve managed to take on strong competition, build a solid business, and even attract the attention of major international firm M&C Saatchi.

GG van Rooyen

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Vital Stats

  • Company: Levergy
  • Players: Clint Paterson, Kieren Jacobsen and Struan Campbell
  • Founded: 2012
  • Turnover: R60 million
  • Visit: www.levergy.co.za

Background

Major international firm M&C Saatchi acquired a majority stake in Levergy in June 2017. Levergy now operates under M&C Saatchi Sport & Entertainment. The company also won the Agency of the Year award at the prestigious 2017 Discovery Sport Industry Awards.

Levergy’s growth has been quite amazing. The company was founded in 2012 by Clint Paterson and Struan Campbell. Although they managed to raise a modest amount of money from a handful of backers, this was not an operation that could afford to burn through funds at a rapid pace. And although the company did enjoy some early successes, the money wasn’t exactly pouring in. Revenue in its first year of operation was under R500 000.

Today, Levergy boasts a majority stakeholder in the form of M&C Saatchi, a list of impressive clients (including Audi, SuperSport, DStv, BBC Africa and New Balance), and an annual turnover of more than R60 million. How did the founders manage this sort of growth and success? Here’s their advice for not only scaling quickly, but intelligently as well.

Related: Establishing The Wheels Of Change In Business

Sometimes, launching in a bad economy is an advantage

When we launched Levergy in 2012, the economy wasn’t looking great. Now, it might seem like a bad idea to launch a start-up in a shaky economy, and there are certainly some young businesses that can’t survive a depressed economy, but we viewed it as an advantage.

The fact of the matter is that launching in a bad economy forces you to be careful with your money, and, if you can survive those difficult early years, the business rests on a strong foundation. When things are booming, you can get a warped view of reality, and you can find business suddenly drying up.

A bad economy also often means that there’s less competition and companies are spending less on things like marketing. That’s good news for a start-up that can’t spend a fortune on marketing.

Don’t throw money at every problem

levergy

Although we managed to raise some early funds, we didn’t have much of a runway. So, right from the beginning, we focused on being cash flow-positive. We managed to break even in our first year of operation. Even though there’s more money now, we’ve tried to maintain the same approach that we had early on. We don’t spend money just because it’s there. Growth isn’t just about making more money, it’s also about restricting spending. Young companies often spend too much too early on things like fancy offices. Take pressure off yourself by saving money.

Some things are worth spending on

We were always careful with our money, but we believed that some things were worth spending on. For instance, we didn’t spend a lot of money on fancy offices and furniture early on, but we did spend on staff. We believed that finding and attracting the right people was important, so we invested in this area of the business.

We also attended some major international conferences, and even went to the 2012 Olympics just after we had launched. Travelling overseas might have seemed like an unnecessary expense, but we believed that it was worth it, since it would allow us to see what the best companies in the world were doing. It’s important to spend money on the things that you think will really boost your business, and save on those that won’t.

Related: Running A Business Like ClockWork – The Founders Weigh In On Launch Success

Be willing to take ad hoc work

Retained clients are fantastic, since they give you room and confidence to grow. With a retained client, you’re guaranteed a certain amount of income. However, don’t expect it to be easy to sign clients. It takes time and patience. One of the best ways to secure long-term clients is to start off with ad hoc work.

Don’t push for a retainer right out of the gate. Instead, take on a few small projects and show what you can do. First build up a track record.

Selling a majority stake in your business is never easy

You need to think very carefully about what you hope to achieve. If it’s just about the money, the experience can be painful and frustrating. The last thing you want is to work in a company you no longer truly own, just because of some earn-out deal. For us, it was never just about the money.

We liked the access to international best practices and overseas clients that an operation like M&C Saatchi Sport & Entertainment could offer, but we still wanted Levergy to feel like ‘our’ company. We didn’t want to take the money and run. We wanted freedom and autonomy, which M&C Saatchi was happy to give us.

You need to have this conversation early on in any negotiation. Everyone needs to be on the same page. If your goals and expectations aren’t aligned, it won’t work. We only sold once we felt confident that we could have a great working relationship with the folks at M&C Saatchi.


TAKE NOTE

You need to invest in growth, from knowing where to focus your time, to approaching the right clients, to spending on the best assets.

Lessons Learnt

7 Pieces Of Wise Advice For Start-Up Entrepreneurs From Successful Business Owners

Launching a business is tough, but with perseverance, a willingness to learn from mistakes and a focus on the future, you can turn your dream into a reality. Seven top South Africa entrepreneurs share their hard-won start-up lessons.

Nadine Todd

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“What seems like an expensive lesson is actually the best thing that could have happened to you.” 

So you want to start a business? Seven successful entrepreneurs share their words of wisdom for start-up entrepreneurs

1. Offer advice and share your expertise freely

The more your clients are educated, the more empowered they will feel, and the more they will view you as a trusted advisor. I gave my clients material to help them develop the best labour policies and procedures. It didn’t make my service redundant — it built trust between us. — Arnoux Mare, Innovative Solutions Group, turnover R780 million

2. Stop planning and start doing

We all tend to complicate business with planning and processes. These shouldn’t be ignored, but you need to also just start — start your business, start that project, start walking the path you want to be on. — Gareth Leck, co-founder, Joe Public, turnover R700 million

Related: Watch List: 50 Top SA Small Businesses To Watch

3. Play your heart out and the money will follow

I learnt this valuable lesson when I was a student and busked at Greenmarket Square. You don’t stand with your hat, waiting for cash and then play — you play your heart out and the bills pile up in your hat. It’s the same in business. You can’t look at the bottom line first; it’s the other way around. — Pepe Marais, co-founder, Joe Public, turnover R700 million

4. Love learning lessons

What seems like an expensive lesson is actually the best thing that could have happened to you. I wasn’t paying attention to my partner or my books in our early days, and I didn’t realise the debt he was putting us into. We ended up owing R1 million. In hindsight, it was a cheap lesson to learn. Imagine if that happened today? The fallout would be much greater. We have 19 stores and nearly 100 staff members. It would hurt everyone, not just me. — Rodney Norman, founder, Chrome Supplements, turnover R100 million

5. Landing an investor starts with your story

A great story and data are the two golden rules of attracting an investor. You need both if you really want to access growth funding that will take your business to the next level. — Grant Rushmere, founder, Bos Ice Tea

Related: Watch List: 15 SA eCommerce Entrepreneurs Who Have Built Successful Online Businesses

6. Offer solutions

If you’re not solving a problem and creating value, don’t ship it — throw it away. That’s cheaper than selling a bad product. — Nadir Khamissa, co-founder, Hello Group

7. Small, clever decisions lead to big profits

One of the most important lessons any business owner can learn is that success on profit is nothing more than the accumulative sum of rand decisions. Lots of small, clever money decisions lead to big profits, and without the disciplines of frugality, money gets lost. It’s that simple. Question every single line item on a quote. Do we need it? Can we get it cheaper? This is what it’s about. — Vusi Thembekwayo, founder, Watermark

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Lessons Learnt

Here’s How Bosses From Hell Helped 6 Entrepreneurs Grow

From control freaks to being unco-operative, founders share what they learned from their worst boss.

Entrepreneur

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In business, sometimes the most valuable lessons come from the worst teachers. We asked six entrepreneurs: What’s the greatest thing you learned from a bad boss?

1. Bring everyone in

“A former boss was very hierarchical and discouraged collaboration. Everyone reported directly to her, and interdepartmental meetings were practically prohibited. It meant that only our boss had the full picture – we missed a lot of opportunity for alignment and cooperation. Today at our company, it’s a priority to hold regular team meetings and foster a strong culture of collaboration. It’s crucial that our team members weave collective sharing into the fabric of their day-to-day interactions.” – Melissa Biggs Bradley, founder and CEO, Indagare

2. Be vulnerable

“Don’t be afraid to show your emotions! I worked for a partner at McKinsey who was an incredible person but an awful manager because he kept his feelings bottled up. After a client presentation went awry, our team didn’t know where we stood with our manager. It was tense, awkward and demotivating. Showing vulnerability and letting others know when you’re genuinely upset can help everyone externalise their emotions, build trust and reassure employees that they aren’t alone. It sends a clearer message than stone-faced silence.” – Leo Wang, founder and CEO, Buffy

Related: 5 Factors That Make A Great Boss

3. Lend a hand

“I worked for someone who would never help out the junior staff with their work, even if he was finished with his own – he’d simply pack up and leave early. I now make an extra effort to ask my staff if they can use a hand when my own workload is light. It’s created a culture that feels more like a tight-knit team and less like a hierarchy.” – Adam Tichauer, founder and CEO, Camp No Counselors

4. Move as a group

“When I was a nurse manager, I had a boss with no experience in healthcare. She wanted to change our process for keeping patients from getting blood clots. I knew it was a mistake, but she insisted. Ultimately, the change failed. It taught me the importance of empowering staff to speak up. At Extend Fertility, we collect feedback from customers via surveys. Results are shared with our staff, and together we develop action plans to address negative experiences. It’s the employees who interact with patients on a daily basis who have the best solutions.” – Ilaina Edison, CEO, Extend Fertility

5. Trust your team

“I once worked for a woman who joined our team after I had been working there for a while. Every time I stood up, she’d ask me where I was going, whether it was to the bathroom or to the printer. She had a fear of not having control over my time and work. As a young adult, this behaviour really demoralised me, especially since I had excelled at the job for years prior. My leadership style is less neurotic. Once my team members have my trust, I’m pretty hands-off.” – Denise Lee, founder and CEO, Alala

Related: 5 Leadership Questions Every Boss Should Ask

6. Respect others’ time

“Early in my career, I had a project manager who’d wait until the very last minute to review work, then convey lots of new information and requests. This happened at the end of the day or, worse, after hours, when I was home. It was demoralising, inefficient and disrespectful. In my career, I’m conscious about reviewing work in a timely and complete way so my team can successfully incorporate my feedback without generating a last-minute crisis – or lingering resentment.” – Kirsten R. Murray, principal architect and owner, Olson Kundig 

This article was originally posted here on Entrepreneur.com.

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Lessons Learnt

11 Things Very Successful People Do That 99% Of People Don’t

Consistency is a big part of succeeding. The top 1% of performers in the world know this is the secret to their success.

John Rampton

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Becoming wealthy and leaving an impact on the world is not an easy feat. If it were, everyone would go around doing it. At that point, it would not be much of an accomplishment at all.

Rather, being extremely successful requires an extreme amount of work. Especially when there is nobody looking. The best people have developed habits that help them reach their goals. These routines are not necessarily challenging to form, but they take consistent effort over extended periods of time. Creating these tendencies in your own life will propel your success.

Here are 11 things, that 99% of people (myself included) do not do, but really should.

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