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NicHarry’s R100 Million Business Plan

From lean e-commerce start-up to sophisticated retail brand, NicHarry’s growth focus is blending modern tech with traditional shopping experiences.

Nadine Todd

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  • Player: Nicholas Haralambous
  • Company: NicHarry
  • Launched: 2013
  • Visit: NicHarry.com

When Nicholas Haralambous launched his online men’s sock store, NicSocks.com, his plan was to build a lean, online start-up. It worked. He built his e-commerce site on WordPress, an open source platform. It took him R5 000, 30 days to build, and six weeks to find traction.

That’s the beauty of tech. You don’t need to be a tech company to make use of all the free and inexpensive tools available to start-ups today. Haralambous understands the difference. His previous business, Motribe, was a tech company. It took over a year to develop the tech, and VC funds were required prelaunch.

His latest business has been very different. But while the magic of online and modern technology allowed Haralambous to launch his idea inexpensively, he’s achieved real growth by moving out of the digital sphere and into traditional retail.

Related: From Telecoms to Socks and Back

A Growth Path

In a world of tech and e-commerce, why is Haralambous finding his next level growth by blending an online presence with a traditional retail footprint?

“We’re five to ten years away from e-commerce becoming a real thing in South Africa,” he says. “Germany’s ecommerce market is $74 billion per year. Ours is R10 billion.

“My goal is to be a R100 million company in the next three to five years. That’s never going to happen as an online company. Even if we capture the entire market of people shopping for socks we won’t make it.

“There’s no doubt that tech has lowered a lot of barriers to entry. Everyone wants to build an app, and many businesses have been incredibly successful on that front. It’s also simple and cost-effective to open an ecommerce site. All you need is R400. But then how do you get found? After you’ve sold to your friends and family, and tapped into your entire social network, what then?

“SEO, Google ads, social media, cost per conversions — this all becomes important, and it’s an art form. I’m a savvy e-commerce user and builder, and I’m still so far behind the major players because I haven’t spent enough time in this market, and I don’t have the volumes that Superbalist, yuppiechef and takealot have — and all of those sites have spent a lot of time in the market paying their dues. We’re a niche player. I have 400 products.”

Choosing A More Traditional Route

traditional-route-for-socks

Once he was set up, Haralambous chose a different growth path. He found stores in Cape Town and Joburg who would carry his range, and then he started branching into other men’s fashion accessories, including pocket squares, scarves, ties and tie clips.

He rebranded his online store as NicHarry.com to encompass the ideal of a luxury men’s fashion brand, including but not limited to stylish and colourful bamboo socks.

And then he made the big move into traditional retail himself. This is the exact opposite of e-commerce: High barriers to entry, much higher set-up costs, and much more to lose if it doesn’t work out. But Haralambous had already tested his market, and discovered that he most definitely had a product range that customers would buy — if they knew his brand existed.

“80 000 people walk through the V&A Waterfront every day,” he explains. “When I opened our second store there people asked me why. ‘The Waterfront is so expensive,’ they said. Yes. But 80 000 people. Imagine if 80 000 people visited your website a day!

“The first day 9 000 people walked past my store. I counted. That’s 9 000 people who probably didn’t know about NicHarry before that day. Imagine how many have walked past since then.

“Retail has travelled a journey the last few years. We’ve gone from retail stores, to online, to a multichannel blend. The swing is coming. People still value the experience of retail. There are some things that suit online well: Books, music and throw-away products. But if it’s something you want to touch and feel, then retail still has a big role to play.”

Related: 5 Ecommerce Myths That Are Sabotaging People’s Businesses

The Best Of E-Commerce And Retail

This doesn’t mean Haralambous has abandoned e-commerce entirely. Quite the opposite in fact. He’s created a model where his online and physical stores form part of the same NicHarry experience.

“I believe an online presence is essential, but it takes years to build a community. Yuppiechef has taken ten years to develop its brand and presence. Wine of the Month Club has thousands of active wine subscribers who purchase wine every month, with an additional tens of thousands who are once-off buyers, but it took them 30 years to build those volumes. It takes time.”

On the one hand, Haralambous and his partner, Jen Wynne, are in no rush. This is a minimum ten year project for them. But they’ve also realised that real local market awareness will be built through their retail stores, and not a purely online presence.

“We’ve linked the online and physical store experiences in small but significant ways though,” says Haralambous. “For example, we use a branded scent in all of our stores. It’s a unique fragrance that our customers associate with us. When you purchase an item from our range online and open the packaging, the scent is the same. We want to tap into all of your senses, whether you’re an in-store or online shopper.

“We want to be crisp, clean, accessible and fun. That’s our focus, and it needs to be clear and distinctive in our retail stores and our e-commerce site. Our customers must have one brand experience.”

NicHarry’s sales are currently 70% offline and 30% online, with five retail stores situated in Cape Town and Pretoria.

Haralambous’ eventual growth goal is the European market, however. “92% of retail spend happens north of the equator. That’s the big market. My growth focus is on Europe, but first we need to build a solid foundation in our local market.”

Retail Lessons From Nicharry

1. Your staff will break rules, so be careful what rules you set

I’ve found it’s better to educate my team on a few base judgement calls. For example, if you’re in a store and the music is too loud and full of swearing, does this make you want to purchase socks? When everyone agrees it wouldn’t, you have consensus, and it’s much less likely that they’ll break the rule you ‘didn’t’ set.

2. Just in case, remember that staff also get bored

I subscribe to Google Play Music for R50 per month and I’ve created an extensive play list. In-store staff can pick anything they want to play, as long as it’s off that list. This may sound pedantic, but it’s important. Staff get bored of the same music day in and day out. We have a range of 4 000 songs.

3. Listen to your employees

When we hire people in this sector we often hear that they’re leaving their current employer because ‘no one hears us or listens to us’. Besides losing trained staff, there’s a bigger issue at stake here: Listen to the people who sell your products. They are the ones interacting with customers day in and day out. They know what stock people are interested in, and what isn’t doing well and why.

4. Create a strong team spirit

When you have dispersed retail stores and your staff work shifts, a lot of people don’t know each other. We wanted to create a strong team dynamic, so we use the app Slack, which is basically whatsapp for teams. It’s an amazing app.

It’s allowed us to get rid of email, and to create groups for different themes: Ideas, what happened in the stores that day, and so on. The more your staff know and like each other, and the better they get on with each other and enjoy their work environment, the more they sell.

5. Use tech to create a better in-store experience

We use iPads to run everything in our stores, from the music to paperless invoices.

6. Content is king

This is true no matter what industry you’re in, but especially in retail. We want our sales staff to be able to have interesting conversations with our customers that aren’t all just sock-related. Everyone has to read a book a month and give me a one page summary. We’re all becoming the best versions of ourselves, together.


Take note

If you want to grow you need to adjust your business model to suit market needs.

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

Company Posts

The Make Up of Makeup: How One Entrepreneur is Changing the Cosmetics Industry

Energetic, enthusiastic and fun are three words to describe Alina Lucía Imbeth Luna. But her favorite words are organic, vegan and cruelty free. They’re the backbone of her Medellin, Colombia-based cosmetics company, Pure Chemistry. Learn how this chemist and engineer is revolutionizing the cosmetics industry and read about her advice for future entrepreneurs.

FedEx

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This article originally appeared on FedEx Blog.

What is Pure Chemistry?

Pure Chemistry is a company that invents, manufactures and sells beauty products directly to the consumer. What makes us stand out is that we are certified organic, vegan, and cruelty-free.

Many companies say they do no testing on animals, but we go one step further. None of our processes or ingredients has any animal components. Ingredients from animals are common in the cosmetic industry but for us it is not an option.

If it’s common, how do you avoid using them?

For virtually any synthetic or animal ingredient, there is an organic, plant-based alternative.

Collagen, for example, is an animal protein that we don’t use because there are vegetable alternatives that give us better results.

As for honey, we don’t take honey away from bees, we use cane honey.

So for whatever reason people have, be it religion, ethics or they just decide not to use a product that has ingredients that come from or are tested on animals, they can come to Pure Chemistry.

Related: Going The Extra Mile With Neil Robinson Of Relate Bracelets

Many companies use the word “organic,” but you are “certified organic.” How is that different?

We are proud to have the Ecocert certification. Ecocert is an international entity that has a standard for the definition of what’s considered organic cosmetics.

To get certified, ingredients need to come from renewable resources, manufacturing must be environmentally friendly, packaging must be biodegradable or recyclable so it’s not just about the product, it’s also the packaging and the production of all our ingredients.

Certification, for us, is very important. I could tell you right now that I am Hillary Clinton, but if I don’t show you an I.D., you won’t believe me, right?

That’s why it’s important to be certified.

How are your products tested?

Our products are tested on people because they are made for people.

We have a testing club at Pure Chemistry. Many are from our University and are chemists and physicists as well friends and customers who volunteer to test our products.

People call all the time about being in our new product test group and we pay no one for testing.  This is very important to us so people are honest about the product and their results.

What is your team like?

We are a company of women and everyone has their own expertise.We all have some authority roles over our own specialties but there are no hierarchies here. The business model is a circle. We all support each other.

We have no set schedule. Our team comes to work when they need to – at the time that they need to work. You don’t have to be sitting here doing nothing if, at that time, there is nothing to do. It works very well for us.

Our customers are also an important part of the Pure Chemistry team. Since 2015, many new product ideas have come from clients’ requests. They write to us, send us messages, and we keep a list.

People started requesting, “Please, we need a toothpaste,” and we said, “Let’s work on a toothpaste.”

Others wrote, “Please, we need a product in a size that can go in a carry on bag at the airport,” so we did.

We mean it when we tell our clients, “Your comment, message, suggestion won’t be in vain.”

How hard is it to develop your products?

As a child, you don’t think about having to make money to do this and that.

For me, product development is like that little girl inside me that wants to experiment.

It’s fun, but not easy. It took us almost six years to develop a shampoo to make sure it did not have sodium lauryl sulfate or sodium laureth sulfate, the quickest, fastest, and cheapest way to make shampoo. It took us that long to get a product that would comply with the organic certification and one that you could use on both babies and adults.

We also have to think ahead. When we started developing nail polish, we also needed an organic nail polish remover, one that was also not flammable so it can easily be shipped internationally. Now we have a patent pending water based nail polish remover.

We are always amazed and encouraged when something that we came up with is working for someone. They write things like “I love this product. I love this company. I love you guys.” It’s very heartwarming.

This is what makes me get up in the morning.

It’s creativity with a purpose.

What advice do you have for other women entrepreneurs?

 Don’t just make a business plan and wait. Entrepreneurship shouldn’t stay on paper.

There should be no excuses. Go for it. Be willing to make mistakes. As long as you are clear about where you want to go, there are many ways to get there.  You can make a mistake, you can fall, a million things can happen.

 Examine and redefine your goals as you learn from your mistakes.

Related: Funding And Financial Assistance For SA Women Entrepreneurs

What advice do you have for little girls?

I would tell any little girl or boy, “Start by writing it.” Write about what you want to do, what you dream about.

As years go by, look to see if that was just a kid thing, a whim, or if it was really a dream. As you grow up you forget that as a child you wanted many things, but if you write them down, it will give you something to look back on.

For me, I can say, “Look, I wanted to be a scientist, and I did it!”

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Company Posts

Communication Skills To Succeed In Business

Article by Nicky Lowe, Wits Plus Lecturer in Business Communication.

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A Scientific American blog about the role of luck in success mentions the popularity of magazines such as Success, Forbes, Inc., and Entrepreneur and argues that we can learn to be successful by reading about successful people:

There is a deep underlying assumption, however, that we can learn from them because it’s their personal characteristics – such as talent, skill, mental toughness, hard work, tenacity, optimism, growth mindset, and emotional intelligence – that got them where they are today. This assumption doesn’t only underlie success magazines, but also how we distribute resources in society, from work opportunities to fame to government grants to public policy decisions. We tend to give out resources to those who have a past history of success, and tend to ignore those who have been unsuccessful, assuming that the most successful are also the most competent.

While not discounting the role that luck, or family inheritance and reputation might have in success, consider the massive role that good communication skills play in success. For example, if you cannot express yourself well, your proposal will be unsuccessful. If your business plan is full of grammar errors, then even if the financials add up, and you can show a past history of success, you are less likely to get the funding you’re after.

Related: A Business Lens For Learning And Development

There are many daily examples where stronger communication skills would have made the difference between success and failure. If a junior data processor bypasses her line manager to ask another manager for help with entering a batch of data in a different format, but is not clear about the batch names, she is unlikely to be successful in getting her job done. Jumping ranks will not go down well in corporate hierarchies, for starters. Moreover, if she lacks the corporate know-how to avoid this faux pas once, she is likely to blunder several times, thus generating the impression that she is disloyal to her own line manager and not a valued team-player. On the other hand, the lack of clarity in her emails can very effectively be overcome by improving her business communication skills.

Effective business emails need to be short and to the point, with very specific detail, especially if a request or instruction is given. The reader cannot be expected to do anything if they do not know what is actually being requested. It may be a simple case of giving the label names of the data batches, as in this example, but often managers grumble about staff being incompetent or lazy when the problem is their own poor communication skills and inability to use email effectively.

The best part of this solution is that it does not rely on luck. We all have the innate ability to improve our own communication skills. For those who want to improve their communication skills mindfully, there are short courses that take only a few hours a week for a couple of months that will give them insights into well researched theories and techniques so that they can apply these strategically in their personal and professional lives.

Related: Personalised Learning Is Optimised For Your Needs

In the reading about luck, talent is defined as “whatever set of personal characteristics allow a person to exploit lucky opportunities” and talent includes “intelligence, skill, motivation, determination, creative thinking, emotional intelligence”. These skills are highlighted in the Wits Plus Effective Business Communication short course to equip our students to make the most of opportunities. Studies have shown that the most talented people are not the most successful in life, but that luck and opportunity may play an unseen role in that success. Excellent communication skills are key to making the most of opportunities and breaking through to success!

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Lessons Learnt

Author Of The Little Book of Inspiration Gives Great Advice On Having Direction And Courage

If you can keep learning along each step of the start-up journey, you’ll continue to grow, and your business will be a success, says entrepreneur and author, Matshona Dhliwayo.

Nadine Todd

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Vital Stats

  • Player: Matshona Dhliwayo
  • About: Matshona Dhliwayo is a Zimbabwean-born and Canadian-based philosopher, entrepreneur, and author of books such as The Little Book of Inspiration, 100 Lessons Every Great Man Wants You to Know, and Lalibela’s Wise Man.
  • Twitter: @MatshonaD

What is the difference between a ‘learn it all’ entrepreneur, and a ‘know it all’ entrepreneur, and why is it imperative that a start-up strives to be the former?

A ‘learn it all’ is one who is driven by the desire to learn and a ‘know it all’ is one who is driven by the desire to prove how much he knows. It’s imperative that you focus on the former because, in life, we are only as successful as what we know. Knowledge is more than power, knowledge is wealth.

How can someone go about being a ‘learn it all’? First, be humble; humility allows you to learn from others. A humble student is better than a proud scholar.

Related: Relax Spas Founder Noli Mini Shares Her Insights On Building A Business Of Value

Energy is a great thing, but it needs direction. How can a start-up entrepreneur calm down, focus, and find their direction?

You find direction from having well-defined goals in a business plan. You keep a tab on those goals by using a daily planner to help you steadfastly execute your objectives. In good times, be cautious; in bad times, be hopeful; and in busy times, be level-headed, never taking your eyes off your goals.

Why is it important to have direction?

road-directionA chariot can’t travel in two directions, and when you know where you’re going it’s easier to get there. When you lose direction you lose opportunities, and when you lose opportunities you lose rewards.

What are the pitfalls and limitations of ego?

Ego is an inflated sense of self and is therefore no different from arrogance. The pitfalls of conceit, which shouldn’t be confused with confidence, are endless. You start thinking you are better than others and the moment you do, this means you can’t learn from them.

If you don’t learn you don’t grow, and if you don’t grow, you die. Most experienced entrepreneurs understand the importance of being humble because people buy from people they like, and people don’t like egotistical personalities. Humility opens people up to you, but arrogance drives them away. And the more people an entrepreneur draws the more people he can serve, and the more people he can serve, the more money he can make.

That said, a degree of arrogance allows you to push through the hardships. Where is the balance, and how do entrepreneurs find that balance without getting discouraged?

Only a few people in history like Julius Caesar and Nebuchadnezzar II rose to great heights with arrogance, but their very egotism destroyed them in the end. I prefer courage, not pride, because it rises from conviction; and also faith, not ego, because it rises from hope. These two have helped the weakest of men and women achieve the greatest feats. An entrepreneur must be filled with courage daily and emptied of hubris incessantly. The higher you rise with ego, the lower you will also descend in the end because of it.

Related: How To Build A Disruptive Attitude

Why should you never, ever feel threatened by someone smarter or with more skills than you? In fact, why should you be partnering, hiring or learning from these people?

I am never threatened by people who are smarter and better than me because I see them as gifts, and not as competition. I view them as assets, not threats, so I allow them to do what they do best, thereby benefiting from it. It also frees me so I can do what I do best. We can be Jacks of all trades but we can’t be masters of all disciplines. Partnering with people who are cleverer than you elevates you.

Many entrepreneurs trust the wrong people. Why does this happen, and what is the solution?

People are complex creatures. The best of us can’t always predict human behaviour. Entrepreneurs, like everyone else, make mistakes. What they should shy away from are the avoidable ones. My advice: Take time to get to know people. Do your due diligence. Ignorance is your opponent, fear is your enemy, vice is your adversary, virtue is your friend, and wisdom is your helper.

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