- Player: Nicholas Bell
- Company: Decision inc
- Launched: 2008
- Turnover: R116 million
- Visit: decisioninc.co.za
Successful businesses are built through a series of challenges and solutions. Nicholas Bell doesn’t just deal with challenges as they arise though. He sets goals, determines what’s stopping him from reaching them and puts strategies in place to eradicate any and all obstacles.
“I don’t ever want a challenge to slow me down,” he says. “You can let a setback derail you, or you can use it as an opportunity to learn and carry the business forward. I believe it’s important to dissect everything — even opinions and advice I don’t initially agree with. Mentors have taught me that it’s important to be adaptable and that nothing in business is hard or fast. We’re constantly faced with new sources of data needed to grow our business, and I’ve learnt that the only real question is whether you’re willing to use that data to drive the business forward.”
In many ways, Bell fell into entrepreneurship. He was studying to be a CA and built a merchandising app for SAB on the side. “One of my biggest strengths has always been the ability to understand the business outcomes a client wants to achieve and to help them translate that into a solution that leverages technology to bring about improvement,” he says.
“I had a friend who worked for SAB, and they had a challenge tracking in-store information around their products. I knew I could build a simple solution that would give SAB the insight they needed.”
But once Bell had built one solution, he acquired more clients, and by the time he was preparing to do his articles at EY, SAB gave him a three year deal as part of their merchandising programme.
“I chose to go into business. There was limited risk. I was 22, living with my parents. If it failed I could go back to accounting and EY.” Within a few weeks Bell had registered his business, Business Intelligent, and was actively working towards building up a client base.
“In the first year I built the business up to two developers, an admin assistant and me. I was involved in development and sales. Our turnover was R700 000.”
Years of continuous growth
By the second year turnover had grown to R1,6 million. Eight years later Bell would hit his target of R100 million, three months before his 30th birthday. Now his sights are set on building a R1 billion business that will show a 10x return. Here’s how he’s developed a strategy that will get him there.
By 2013 Bell had been in business for six years. His turnover was R21 million, he employed 25 people and his clients included Simba, Harmony, ArcelorMittal, SAB, and Sibanye Gold. He believed he’d built a business that was exceptionally scalable.
When he was chosen by Endeavor to pitch at an ISP (International Selection Panel) to join Endeavor’s international members, he focused on the fact that Business Intelligent helped businesses make better decisions through technology.
“I presented business intelligence (BI) as a massive global industry encompassing all other industries, highlighting that we were scalable because we catered to every business’ needs.”
The ISP disagreed. “Endeavor likes technology as a rule, but the ISP believed that if it’s not your own IP, you won’t scale. You’re also open to disruption.”
“I wasn’t in complete agreement. First, I did think we were scalable. Yes, we earned hourly rates, but we were also selling and packaging software. Our scale would also come from the ability to implement these preconfigured and packaged solutions in a significantly shorter period of time to our competitors, whilst still being able to charge a similar price, giving us margin scale into the future. I also knew that we would never build our own products because we couldn’t compete with international corporations who spend hundreds of millions on R&D.”
Related: The Case for Business Intelligence
Use feedback to critically evaluate your business
Bell didn’t dismiss the ISP’s concerns out of hand though. “The feedback made me look at the business critically and evaluate our strengths and weaknesses. One strength was that we embedded on top of these platforms and we did it quickly.
We also understood business objectives and were able to match solutions to needs. But we didn’t own our own tech, and at that stage we were reliant on a single vendor, Qlik. I realised that the ISP’s question was a relevant one: What would happen if Oracle bought Qlik and suddenly we were one in 3 000 other partners?”
When Bell got back to South Africa, he sat down and asked himself the following questions: Does someone else control our licence to trade? Is our business open to disruption by forces we can’t control? Who pays us? Who bills us? Is our relationship with clients or agencies?
“We were going to remain a services firm, but I saw the risk, and I realised that if I was serious about building a business with a turnover of R100 million, I had to make some changes.”
Recognise potential business threats
One of the biggest threats Bell recognised was the risk of high concentration in clients or products. “We had over 50 clients, so we didn’t have client risk, but we did have product risk.”
Qlik is a specialist business intelligence provider, which presents the risk that it could be acquired by one of the large global software vendors.
“There’s also the risk that a partner stops liking you or working with you. Once we became Decision Inc we moved as quickly as possible to extend our partnerships to SAP, Microsoft, Adaptive Insights, Alteryx and MicroStrategy.”
Bell’s licence to trade was no longer built around one partner contract which could be disrupted. Next, he turned his attention to IP.
Ensure you can duplicate your intellectual property
“We’re an intellectual business that relies on human capital. Our IP resides in a lot of individuals’ heads. We needed to get it out of heads and into the business. What we could do in five weeks with 25 people was incredible. Our speed of business was high. But it couldn’t be easily multiplied — 75 people couldn’t do it quicker; it’s not sustainable to work at that speed and it gets exponentially more complicated. The solution was to find a different model.
“As a discipline, business intelligence is a small space at the top of the operating and decision-making pyramid. However, we make a massive impact on our clients’ strategies and operations. But because we impacted executive decisions, which were implemented at an operational ERP, CRM and data level with different service providers, our three month contract created 18 months’ work for someone else.
“If we wanted to grow, we needed to grow our share of wallet. We focused on growing the business down the line by leveraging great client relationships, which were a big competitive and strategic advantage, and moving down the value chain.”
To prepare for the growth he was targeting, Bell started reading the works of competitive advantage and strategy guru, Michael Porter.
“Porter calls them adjacent services, which basically means additional services that are along the same information continuum. This was a way to potentially solve two problems: We could increase our wallet share and IP through one strategy. We needed to stop being a BI firm, and become an IM (Information Management) firm.”
There are six disciplines that work hand-in-hand in the information continuum: BI, strategy (how to use your information to support strategy), data management, enterprise performance management; content management; and advanced analytics.
Up until this point, Bell’s company had focused solely on the BI component, which was high value, but at the top of the decision-making pyramid. To grow wallet share, he needed to leverage the excellent client relationships he had built up, and offer additional services down the value chain, implementing the strategic decisions that his company’s insights and data had helped shape.
This would cement the business’s IP as well, as few companies successfully worked across all six disciplines. He needed a framework that supported teams with different areas of expertise that worked together to cement his differentiator.
Should the new skills be developed in-house, or did it make more sense to merge with another firm that had the requisite skills? Bell chose the latter approach.
“My management team and I met a local entrepreneur through Endeavor who worked in a similar space to us. We were both IM firms, but while we concentrated on BI, his firm was focused on other areas.
“We recognised that we shared the same problem. We all wanted to increase wallet share within our client bases, we didn’t have enough internal IP and scaling a services-based business is tricky at best.
What you should look for in a partner
“Together however, we could mitigate these challenges. Our shared disciplines also meant we could service five of the six disciplines in the information continuum — as a single service provider.”
A third business joined the discussions, and with all three partners believing in Bell’s vision and agreeing that they could do more together as a cohesive unit, a share-swop was done and the three businesses became one new entity: Decision Inc. Bell is the new company’s CEO, but all three are shareholders and managing partners.
“In many ways Decision Inc was a start-up,” says Bell. “We had a fresh, engaging offer for the market, but we weren’t starting on zero. We had billings, sales, a marketing and HR department, proper financial structures and most importantly financial insights.”
Even more significantly, the new firm, with a turnover of R65 million in its first year, was able to merge, combine its insights, and work as a team to bring new offerings to the market and all of their client bases.
Growing together after the merger
“Our first year together was all about trading, getting active in the market as Decision Inc and building our internal culture. Our firms were small enough to make merging and creating a new culture relatively seamless. We had a united vision, and our employees understood the benefits that a larger business offered them.
“In year two we made our major shift from BI to IM, which enabled us to move down the value chain. A lot of this growth and development is internal, but because we’re cash generative, we can invest in additional growth as well. We recognised the areas where we wanted to expand our services, and we made two additional acquisitions.”
In 2015 Decision Inc grew from 75 to 125 people. “This is a human capital business. HR and culture are incredibly important, so we focus a lot on career and leadership development, performance management, client engagement and satisfaction reviews. We like success — a lot. We’re here to grow, but if you’re part of our organisation, this needs to resonate with you. We have 250 clients, which gives our employees a huge opportunity. We spend significant effort on finding and developing the right talent that thrive in a high energy, high impact environment and are excited by the challenges of working with like-minded individuals to achieve our goals.”
Bell is passionate about his business, employees, partners and clients. His core focus has always been on helping his clients make better decisions and build bigger and more profitable businesses as a result, but he’s also acutely aware of the fact that he works long, hard hours because he wants to build an asset of value.
Ensure your effort leads to wealth
“In our early days, I recognised that we were doing a lot of activity, so where was the reward? All the effort in the world won’t automatically lead to wealth. Putting in effort is only worth it if your strategic aim is real growth.
“Too many entrepreneurs only learn this when they’re trying to sell their businesses. Instead, it needs to be an element integral to your growth strategies from day one: Who will pay you for your business? Have you built a business separate from you that holds and retains value?”
Bell recognised that by 2016 Decision Inc had the right clients, skills and opportunities. “We were our own constraint on growth,” he says.
“We didn’t need more clients, we needed more managers to go out and service them. We needed to improve our engagement processes, and our various teams’ abilities to work together and cross-sell and cross-deliver.
“We had already leveraged our client base and IP, now we needed to increase our human capital capabilities. We had the tools we needed, we just had to leverage them within the organisation. The investment had happened; now the focus was on scale.”
In addition, the cost to expand your services within an existing client’s organisation is far lower than acquiring a new client. All of this meant that Decision Inc’s margins were steadily growing, and not just its turnover.
“These are all crucial points when you’re building an asset of value: We’ve built an organisation that has its own institutional IP, which is shared throughout the organisation, our margins are strong, and the business is not dependant on me as the CEO.”
This did not happen without a clear focus and strategy in place. “The development of second tier leadership was so important,” says Bell. “One person’s ability to have a vision of the future would never be enough to grow the business we envisioned.
“Our business makes an impact on the frontline, so how our people engage with customers is of paramount importance. A strong middle-management meant we weren’t burdening the top tier, who could focus on top-line strategy, while the business as a whole was delivering on our value proposition of how we improve service.”
Identify what you need to reach the next stage of growth
In March 2016 Decision Inc took its first external investor on board, private equity firm Capitalworks through one of its subsidiaries, SA Enterprise Development (SAED). “Up until this point we’d relied on working capital only to fund our growth. Now we’re taking a big jump, and for that we need capital. We’ve proven that we’re able to acquire and merge businesses, and that our corporate culture supports new people joining us. We understand the transition process.
“We’ve also recognised that acquisitions are a good growth strategy for us. We’re now looking at other geographic areas, starting with Australia, and if we get that right, then the UK and EU. We believe the best way to achieve this growth is to merge with local partners in those areas, and so we are once again on the acquisition trail. This investor-led strategy will see the business doing 40% of its work offshore with a R500 million turnover in five years.
“There’s no exit strategy at this time, but we want to grow value that we can unlock at the right multiple, at the right time. Through key man development, customer concentration, and spreading our geographic risk, we’re building an asset of value that justifies the effort.
“I want a multiple of ten for this business. We will be global; we will operate in four different currencies; we will have a geographic spread and multiple key clients. That’s the goal.”
Moving beyond price
One of the biggest challenges Decision Inc faced was that of price. “As a business, you are always measured against your peers. If you’re seen as a tech provider, then you’re measured by what your competitors are saying. It doesn’t matter what you actually do, and what your real differentiators are, what matters is what clients think you do. Once that happens, they’re benchmarking your price point without understanding the value you offer. This was our problem. The market’s understanding of the service we delivered was what constrained us.
“We have a very customer-centric focus. We’re not commoditised, and we can’t compete on price. Our service differentiator is unique. We just needed to find a way to make the market see that.” Bell had to go back to the drawing board.
You can’t articulate who you are if you don’t understand it yourself
“We’re not a typical tech provider, because we don’t just sell products. We’re also not consultants like McKinsey, Deloitte and Accenture. Those organisations are expected to charge high prices for their IP and human capital. As a tech company, we’re expected to charge commoditised prices. The reality is that we sit in the middle. We have products and IP that we bring to the table. How could we show this value to our clients and distance ourselves from our perceived competitors?
“We have the strategic ability to bring tech and people together in such a way that we can analyse your business, service your entire decision-making needs through one vendor, and then implement any tech decisions that are made.
“But this still wasn’t enough. So we looked to our track record. We’ve done 500 projects in 2016, we have a 90% customer satisfaction rate, and 250 clients are billed annually. The referrals speak for themselves.
Have a clear conversation with your customer
“This helped, but it still wasn’t enough. Ultimately what we needed to do was be able to prove the value we bring to an organisation’s bottom line. When we go in to a client, we need to be able to say ‘We can save you R50 million, and charge you R500 000 to do it.’ More importantly, we need to quantifiably prove it.
“From that moment on we were charging on capability and not on an hourly rate. Today that’s the conversation we’re having with clients. We’re not having conversations around price and hourly rates.
“The ability to have this conversation has made a huge difference in how we engage with clients, and ultimately on our bottom line and growth trajectory.”
How We Went From 0 To A Million In Sales In 6 Months
It became a numbers game. How Version Eight is winning 2018.
In November 2018, I left a very cosy position at a flourishing retail company in order to pursue my own destiny. Version Eight was born on 1 February 2018.
Everyone told me starting a business in today’s economic climate will be tough, and boy were they right. However, through a bit of luck, some hard work, and out of the box thinking, we managed to turn over our first million rand in sales within our first six months.
Now, for the record, hitting the seven figure turnover mark in six months is nothing to write home about, and that is certainly not the purpose of this article. The purpose of this article is to share our key ingredient with you so that you can possible achieve the same growth within your business, whether it’s an existing, new or business you are still dreaming about.
So, How Did We Do It?
The answer is quite simple, we did it through digital marketing.
Well, to be honest, not having had capital to spend on our own digital marketing at first, our first few clients were signed through cold calling as mentioned on the Big Small Business Show with Allon Raiz.
Only after signing our first three clients did we have some money to spend on online marketing services like Google Ads.
In Aug 2017, I wrote an article on this very website named “Beginners Guide to Digital Marketing in South Africa”. In the article I talked about the four fundamental pillars and how they form part of an effective digital marketing strategy.
We only incorporated three of the pillars, as one of them was more aimed at B2C businesses, and being an digital advertising agency meant we were B2B driven.
1. Search Engine Marketing
If you read the guide, you will notice that search engine marketing was the number one pillar on the list, and with good reason.
In a nutshell, we knew that 90% of all online sales and enquiries started with a search engine and that is why it’s something we started implementing as soon as we could. In the beginning organic traffic was slow, so we spent a very small amount on search engine ads.
Having the knowledge and understanding how Google AdWords work, I strategically bid on keywords that indicated that someone was looking for digital marketing help.
We made sure to find keywords that got a decent amount of searches per month but didn’t have a lot of competition, and yes, these kind of keywords do exist, you just need to know how to find them. This meant that we ended up paying very little for leads that enquired about online marketing services.
2. Social Media Marketing
Next up was to start working on a social media strategy.
Again, not having had a lot of cash floating around, we thought LinkedIn would be the best place to start. The professional network is amazing for connecting with potential prospects and that is exactly what we did.
By connecting with the right people, being active on the platform and sharing knowledge on a weekly basis, it was only a matter of time before we started getting private messages of people and companies looking for digital marketing services. Not to mention, this strategy was completely free.
3. Email Marketing
Another pillar I mentioned in the guide was email marketing. After cold calling prospects and finding the emails of key decision makers it became a numbers game. We knew that no one would know who we are and therefore we had to provide some form of value up front if we wanted to build some credibility.
Soon after we launched we created a Social Media Advertising Guide and all it was a 90 page PDF and 40 min video talking about social media advertising and how one can go about advertising on all the different platforms.
You can download our amended 2019 Social Media Ad Guide Here for Free.
As expected most recipients found it interesting but didn’t feel the need for our services, however, for every 50 people emailed, 21 would reply. And out of every 21 replies we about 1-2 meetings. Like I said, it became a numbers game.
WRAPPING IT UP
As mentioned earlier in the article, we did not end up using all four pillar (SMS Marketing), however, we’ve had great success with the above three.
In six months we did over a million rand in sales, and by the grace of God we are still growing, and you can too! I truly hope this article has opened up your mind to the power of digital marketing and if used correctly, and consistently, it can most definitely change your business for the better.
I do understand that not everyone is a digital marketing wiz, and for those I want to say, read, learn and experiment with online marketing as much as you can.
For those interested I would recommend doing a digital marketing course. Not only is it affordable, but it will allow you to scale your business.
Make sure to visit the Digital School of Marketing if you want to learn more about some of the best and accredited digital marketing courses around.
Blood, Sweat And Tears – The Journey To Becoming Emerging Entrepreneur Of The Year®
You see the awards, the magazine features and the highlight posts on social media. But building a successful business from the ground up is a really tough journey behind the scenes. Outsourced CFO co-founder Louw Barnardt opens up to Entrepreneur Magazine about what it actually takes.
I can tell you about all the exciting successes. I can mention things like two to twenty-six professional staff in under five years, more than R500 million in growth funds raised for SMEs, some notable awards and many other things that make the headlines. This is a part of the story and we do try to stop and celebrate the successes as we go…
What I would rather share with you are the trials and tribulations, the challenges and heartaches of the process of building a company. It is in this trail by fire that one learns the most about being a good entrepreneur. The most challenging of times often determine your path and hold the best lessons.
For me, blood represents the big losses. Bleeding financially is definitely a part of the journey. Very few companies have started up without some months or years of bootstrapping, of keeping it lean. For us, that meant continuing on articles salaries for more than a year after we had qualified. It took years to get to and exceed market salaries. This has been a painful sacrifice, but one that all founders need to make in order to get out of the rat race. Live a few years like no-one would so that you can live the rest of your life like no-one else can.
Relationships are also often counted among the losses. Many a time we have invested a lot into a staff member only to see them jump for a better deal. Many times people close to you try to steal ideas or copy direction. It hurts, but it has definitely been a reality.
Sweat represents hard work. Outsourced CFO was built on many long hours of hard, focused work. We’ve made this fun by working from coffee shops on weekends or from the beach for a day. But hard work has definitely been a part of getting things to where they are today. Nothing worth building is easy. Don’t start a business if you want to work less!
Sweat also means stretching. Coming from a finance background, there are dozens of core skills that you need to teach yourself in order to be successful at business. Sales, marketing, public speaking, networking, people management, technology. It is a process of continuously stretching your mind and your abilities. Treat learning like a superpower!
Tears just refer to literal tears. I have yet to meet an established founder who has never come home after a ridiculously tough day to a good cry in the dark. The journey has massive emotional asks. Disappointment, rejection, temporary defeat (which feels like failure in the moment) and other experiences are a part of the game. You have to learn how to dust yourself off, refocus and keep moving forward. But sometimes it’s okay to just shed that tear. Heaven knows I have.
Fate has a cruel sense of humour
The funny thing is that our biggest successes have very often been followed in quick succession with our biggest disappointments. The week we received the Premier’s award as one of the top two Emerging Companies in the province is the same week we had to postpone paying our own salaries. The month I came back from honeymoon early in our second year of business is the same quiet April that we had to seriously consider if we should continue with business. The list goes on! Business teaches you in a very real way to hold both the extremely high and extremely low moments at the same time.
Pivotal moments and the grind
In every young company’s story there are pivotal moments. Things that happen that change the game. I’ll share two of ours with you. At the end of the very April month mentioned above, we won the contract to become the national financial service providers to Microsoft’s BizSparks Program, allowing us to work with the top 10% of a pool of one thousand tech start-ups being incubated by Microsoft. This set us on a course to become the leading authority in the country on finance for tech start-ups.
Another such moment was the Fundraising Readiness Program that we ran with Investec, where we helped over a dozen private companies prepare for and pitch for growth capital. The brand association and fundraising processes that came from this also changed our trajectory. These pivotal moments change your game – but don’t take anything away from the weeks and months of hard grind in between them.
Entrepreneurship is a team sport
No great company has ever been built by one person. It takes a village to build a business. I have been blessed with two co-founders that I have been friends with for over a decade. Their work and support as well as that of our team (which include my sister Dore too) has been the secret sauce to our success. Don’t try to go it alone. Surround yourself with likeminded people who share in and contribute to your vision.
The road to building a successful company is a steep and rocky one. It is scattered with high mountains as deep valleys. You will need patience, dedication, willingness to sacrifice and a sincerely, fierce belief in your vision for the road. But if your why is big enough, you can get up every morning and make that dream a reality!
SA Entrepreneur Takes First-Of-Its Kind Business To An International Level
Jo Farah shares some insights on his entrepreneurial journey as Global Entrepreneurship Week (GEW) gets underway.
South African-born entrepreneur and creator of the world’s first environmentally friendly sneaker care product – Jo Farah says entrepreneurship has always been part of his DNA, and making a valuable contribution to society his ultimate goal.
The founder of Sneaker LAB – an innovative business that’s managed to create a first-of-its-kind, biodegradable sneaker care product, delivered his sentiments on entrepreneurship and his entrepreneurial journey as Global Entrepreneurship Week (GEW) kicked-off in 170 countries around the world this week.
Farah, who’s been mentored and groomed by his entrepreneur father, says developing a successful business has always been part of his life’s plan. And while he managed to establish a few start-ups during his entrepreneurial journey, which includes founding a guerrilla marketing agency in South Africa, and producing ads for the likes of Adidas, New Balance and Puma it still wasn’t enough.
After returning from the United States in 2008 with just one thing on his mind – to help cure South Africa’s conundrum by creating jobs for the unemployed, and in-turn fostering economic growth, Jo invented a one-of-a-kind sneaker care product, and put shoulder to the wheel to establish his business in 2013.
Starting a sneaker care product range was a natural choice, especially considering Jo’s passion for sneakers, street wear and urban culture. He also wanted to create a complimentary product to accompany the list of sneaker brands that has inspired him over time. Jo’s work behind the scenes commenced in earnest and in no time he conducted enough research to support his theory – there was a gap in the market for branded sneaker care products. He knew that he was on a good wicket.
“There already was a range of non-branded products on the market, but my research revealed there was a healthy appetite for branded, environmentally friendly sneaker care products. That spoke directly to my business model,” he says.
Today, Sneaker LAB has placed Cape Town on the map with its premium global status – it’s the only sneaker care product range in the world to be Green TAG certified, environmentally friendly and biotech driven. Its products are water-based, readily biodegradable, and the packaging is suitable for recycling. The business also operates internationally, in 50 countries across Africa, with an experiential brand store in Braamfontein Johannesburg; as well as downtown Los Angeles in the USA; Asia and Europe. The business is growing by the day, with a store in Tokyo set to open soon.
As an entrepreneur he’s grown in leaps and bounds, and despite many changes along the way, his sentiments on entrepreneurship remain.
“Inspiring potential entrepreneurs to develop an entrepreneurial mindset and embark on an entrepreneurial journey is one way of solving some of the world’s most critical problems, and freeing the economically marginalised,” Jo says.
He urges young aspiring entrepreneurs with an entrepreneurial mindset to take the plunge and to channel time and energy into developing their business ideas into something tangible and workable that could generate good long-term financial returns.
“People will tell you that it can’t be done, but believe me, it can. All you have to do is to believe in your idea and to work hard and smart and you’ll reap the benefits,” Jo says.
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