- Player: Loic Potjes
- Position: CEO
- Company: Securitas SA
- Established: 2009
- Visit: securitas-rsa.co.za
As the saying goes, Africa is not for sissies. For any company wishing to do business here, there are unique challenges to contend with. Take, for example, the South African security sector. It is, to put it mildly, very different from the one you’ll find in Europe.
A key reason is the ubiquity of crime in South Africa. In fact, it’s the third-most violent country in the world (Venezuela is first, and South Sudan second).
The prevalence of crime has subsequently resulted in the local security sector becoming a very busy one. There are no less than 9 000 security companies active in the country. Moreover, the average offering consists of low-cost entry-level manpower services, and in the case of some small operators, employees don’t receive the salaries and benefits dictated by law.
So establishing yourself in this difficult industry and turning a profit can be hard. But that is exactly what Securitas decided to do in 2009. The company (large and established in Europe) made the move into South Africa. The transition wasn’t a simple one.
Related: How Do I Start A Security Company?
Here’s what the company learnt about succeeding in an industry where competition is fierce and margins are small.
1. Use acquisitions to jumpstart business
When you’re faced with a plethora of competitors in a given market or industry, getting your foot in the door can be hard. Even with a respected international name and brand behind you, organic growth is often difficult. So, to jumpstart things, Securitas acquired a small but respected security firm, which gave them a solid base to operate from. Suddenly the company had the licences, workforce and assets needed to start doing business on a meaningful scale.
“We quickly realised that we couldn’t simply ‘copy and paste’ what we did in Europe,” says Securitas SA CEO Loic Potjes.
“South Africa is unique, so we needed a unique strategy. When you enter a new market, you have to be willing to listen and learn. We decided that the best way to do this was to acquire a local business that was entrenched in the market.”
When you find yourself playing catch-up in a particular field or industry, a strategic acquisition remains one of the best ways to draw level (and surpass) the competition.
Modern examples are easy to find. Despite having its own instant-messaging app in the form of Messenger, Facebook bought WhatsApp as well, instantly making itself one of the key players in the industry.
Just as videos were becoming ‘a thing’ on the Internet, Google purchased YouTube. Thanks to this, Google largely owns the online video space.
In fact, YouTube is officially the world’s second-biggest search engine — only Google itself is more popular. Most recently, Microsoft decided to stop sitting on the social media side-lines by purchasing LinkedIn for a phenomenal $26 billion. Suddenly, Microsoft is a big social media player.
2. Differentiate yourself
With 9 000 players in the local market, it can be hard to grow your market share when you’re not only a new player, but also positioned at the premium end of things.
Securitas SA’s situation was exacerbated by the fact that the global financial crisis struck just as the company arrived in South Africa. Businesses were looking at areas where they could cut costs, and security expenses seemed as good a place as any. After all, there were plenty of small operations out there willing to undercut the competition.
“Our offering was better than the vast majority of players. Our guards were well trained, and our success rate in preventing incidents was higher,” says Potjes.
“We had the data to prove it. When you’re dealing with a lot of competition, you need to differentiate yourself in a meaningful way. And this doesn’t mean just having a nice brochure that lists all your accolades. You need the cold, hard data that proves you’re worth the price you’re asking for.”
Securitas SA’s strategy worked. By 2011, it had more than 2 000 employees, an impressive list of blue chip clients, and was viewed as one of the top-ten players in the industry.
A product or service is worth what clients are willing to pay for it. If you don’t want to be drawn into a price war, you need to demonstrate your value. And a slick sales pitch is not enough. It’s all about data. Show your value. Prove it.
Why do so many companies use Apple products, despite the fact that they are often far more expensive than other available systems? Because they are user-friendly and great to use. They improve productivity, which makes them worth the extra expense.
3. A service business is hard to scale
As 2011 was drawing to a close, Securitas was in a reasonably good position. But it was finding it increasingly hard to scale. Why? It was facing a problem that many service-based operations have to deal with when trying to expand.
Whenever Securitas grew its client base, there was a corresponding growth in cost and complexity. Because Securitas was using highly-trained guards, the marginal cost associated with every new client contract was substantial.
“We realised that the very nature of the business was constraining growth. The business model was based on low-cost, low-margin, manpower-based services, which couldn’t easily scale,” says Potjes.
There is a reason why modern tech companies are receiving sky-high valuations and massive investment: They are eminently scalable. And why are they so scalable? Because the marginal cost of a tech product or service is practically zero. Just consider a company like Dropbox, Airbnb or Uber.
Signing up an extra user brings with it virtually no cost. The opposite is often true when selling a physical service in a bricks-and-mortar world. The marginal cost is significant, it takes time to implement and it adds complexity to the business.
4. You need to find a scalable business model
To take the business to the next level, Potjes and his team realised that a fundamental shift was needed. Growing Securitas SA incrementally through its existing service offering would take too long. But pivoting a business with thousands of employees would not be easy. So the company relied on a strategy that had worked well early on: Acquisition.
“By 2011, we had realised that we needed to start looking at different products and services. Specifically, we wanted to move away from the traditional manpower-based service offering towards technology-based solutions,” says Potjes.
“We started aggressively pursuing this strategy in 2013, which was why we acquired an excellent South African company called Rentsec that focused on providing offsite monitoring.”
Securitas brought Rentsec into the fold, and radically changed the business. The company started selling security solutions that were based on technology and upskilled specialised manpower — operated largely out of control rooms.
“A number of security functions can easily be replaced by technology,” says Potjes.
“For instance, it’s inefficient to have guards patrol a boundary wall. They can only guard a small section of wall at any given moment. A proactive solution consisting of security cameras with video analytics managed by off-site control room operators can do a much better job.”
The company was overhauled completely. It went from 90% of its bottom line being based on low-cost manpower services to 75% of its bottom line being dependent on highly-differentiated tech services with specialised manpower.
“We managed to quadruple our bottom line. Moreover, we didn’t need to let any of our employees go. In fact, we have 4 000 employees today. And we’ve managed to upskill them and, to a large extent, keep them out of harm’s way,” says Potjes.
Many great businesses in history have hit growth ceilings, and were only able to punch through once they changed their business models substantially. A great example is Starbucks.
The company was founded in 1971, and sold coffee beans and espresso makers. By the late 1980s, there were only 11 Starbucks stores. Then Howard Schultz bought the brand and took the concept of the Italian coffee shop to the US. It now has
24 000 stores worldwide.
Another interesting example is PayPal (originally called Confinity). Initially, the company offered a way to ‘beam’ payments from one PDA (like the Palm Pilot) to another, but these early versions of smartphones went extinct pretty quickly, leaving the company without a platform for its service. But a smart merger with Elon Musk’s online banking company X.com saw it become a hugely successful online payment platform.
- An acquisition can be a great way to play catch-up in a market or industry.
- If you want to play in a saturated market, you need to differentiate your offering. What makes it special?
- Not every business model is scalable. If yours is not, you need to find a way to make it scalable.
- Pivoting is not only for start-ups. Making that leap from medium to large enterprise might also require some pivoting.
10 Gary Vaynerchuk-Approved Success Strategies
The VaynerMedia founder gets real about drive and ambition.
Perhaps the best way to describe Gary Vaynerchuk is “nonstop.” The founder of VaynerMedia, VaynerSports and Vayner/RSE is also an author, host and vlogger who records just about everything he does.
He is known for being relentless in his pursuit of the hustle and has a loyal audience of millions (2.4 million on Instagram, 1.58 million on Twitter and 2.3 million on Facebook) who take his advice to heart.
We took a deep dive into his blog archive to find some of his best tips and advice for making it as an entrepreneur.
1. On why failure shouldn’t scare you
“It’s the lack of fear of failing that has allowed me to make decisions so quick. People don’t make decisions because they are scared to lose. I make decisions because I want to know what’s going to happen, and then I use that information to help advise what I do next,” Vaynerchuk writes.
“The one thing I know for sure, is the outcome of what happens if you don’t decide. If you never make a decision, or deliberate for too long, all the upside or potential opportunity could be lost.”
2. On the value of patience
“The game is LONG. There’s so much opportunity. Optimism is the secret to capitalizing on this opportunity and that’s where you need to live. You need to figure out how good it really is and how much opportunity you have,” Vaynerchuk writes.
“Patience is practical. I push patience because I know life is long. Everybody around here is running around like it’s not. 24 year-olds running around like it ends tomorrow. Like they need it now. What’s wrong with being 26 or 41 or 73?”
3. On why age has nothing to do with ability
“The youth are the future of everything. They are the future of business, of society, of law and of government. We better pay attention, and empower them to be the best that they can be,” Vaynerchuk writes.
“My hope is that we lose the sentiment of age makes a difference in skill. There are plenty of 22 and 24 and 26 year olds in my office right now that work harder and smarter than some of the 50 year olds I know. It’s just the truth and we are going to continue to see this trend adopted in the marketplace. You can’t deny results.”
4. On how to build a lasting legacy
“I think my actions map to my ambitions. Because my ambition is to have legacy. I treat it that way. I treat everybody I interact with, with kindness and respect. These days, as my notoriety has grown, I still treat people just the same. I look them dead in the face and I’m just in it with them for that one minute or two or three or 10, and really care about they have to say! Because I am very appreciative and humbled for their attention. I will never get over it. I will never get over the fact that people actually care.”
5. On the importance of an open door policy
“I don’t think one can win in business without having the proper teammates and empowering them to play their role. Ideas can come from anywhere but the fact of the matter is you need an offensive line, you need a receiver, you need a quarterback, you need them all and I think any leader that doesn’t recognise that will ultimately not succeed in the long term. Obviously you can have a company that runs for six months and you sell it but over a 10, 20, 40 year period, there is no other strategy that will actually work.”
6. On why you need to prioritise your own happiness
“To truly be selfless, you have to give without expectation. It’s the mindset of giving with expectation, which kills everything. It just doesn’t work at all. Being selfish is the gateway to selflessness, because you learn to take care of your own personal needs first in order to use that as collateral later so that you can really, truly help.”
7. On why you shouldn’t think about how things “should be”
“Navigating our society and our lives with the hope of how it ‘should be’ versus the way it actually is, is the quickest and least practical way to create success. This is something I say to myself every single day,” Vaynerchuk writes.
“I am in control of my destiny. Nobody else. I get to decide how I react and how I respond, and the greatest motivator to inspire perspective is the simple statement ‘What’s the alternative?’”
8. On why you must value the perspective you bring to the table
“Why are you taking somebody else’s opinion about yourself greater than your opinion about yourself? It’s the single greatest mistake that will keep you from finding happiness and confidence in who you are,” Vaynerchuk writes.
“And it’s not that their opinions don’t matter. You have to have an equal amount of respect for yourself as for others. It’s a democratic society and everyone gets a vote. So beyond the thought leaders, and politicians and school systems you have to have respect for yourself. You need to put yourself on your own pedestal and then start weighing the opinions of others proportionately to how you actually feel about yourself.”
9. On why the competition doesn’t matter
“I am and always have been consumer focused. The reason I don’t pay attention to my ‘competition’ is not because I’m brash or cool. It’s because it doesn’t matter when you’re obsessed with the end consumer,” Vaynerchuk writes.
“Because it starts and it ends with the end consumer and where the attention actually is. I will always do actions that bring you the most value because then I get value in return.”
10. On why your goal should be to keep working
“I didn’t need to get mine at 25. Heck, I don’t even need to ‘get mine’ at 41. This is the long, long game. I’m driven by the climb. It could be because I’m an immigrant and I just have this chip on my shoulder. Or maybe it’s in my DNA. I don’t like winning. I like losing. I like the struggle. I like people telling me that I can’t,” Vaynerchuk writes. “I don’t give a shit if my payday comes tomorrow. I want the game. The game is my life. There will never be a moment to quit. There’s no dollar amount. Nothing you can do to make me stop.”
This article was originally posted here on Entrepreneur.com.
7 Motivational Habits That Drive Millionaires
Habits seem to rule us. They can hold you back, or you can adapt the right habits and prosper.
Have you ever been awed by the motivation of a successful entrepreneur, leader or athlete? I have. It’s not jealousy, either. Far from it. It’s respect for how motivated they are. Even though I consider myself fairly motivated, their examples encourage me to become even more focused and driven.
The good news is that by adopting the following seven habits, anyone can become more motivated:
1. Find your why
“Highly motivated people start with their WHY. WHY do you do what you do?” asks J.D. Meier in an article for Time.
“If you climb a mountain simply because it’s there, that’s probably not enough to keep you going when the going gets tough. If you know WHY you do what you do, and it matters deeply to you, then you will find your strength in any situation,” adds Meier.
Why do you want to start a workout regiment? Because it was suggested by your doctor? Did your spouse mutter a comment? Are you tired of feeling lethargic? Once you find your why, you can use that to motivate you to follow through with exercising.
2. Get your morning started on the right foot
One of the easiest and most powerful habits that drive motivation is kicking off your day correctly by having a morning routine. Think about it. Getting your day started on the right foot makes it a lot easier to stay motivated throughout the entire day.
To ensure that you wake up on the right side of the bed, try these tips:
- Have a reason to get out of bed. It could be anything from walking your dog, making sure your kids are off to school, or squeezing in a workout before work.
- Stretch and breathe deep. This gets the blood and oxygen flowing to your brain, and helps you get up.
- Do something simple to start the day. I make my bed immediately once I’m up. It’s not because I want the bedroom to look presentable. It’s because it’s an easy task that makes me feel like I’ve already accomplished something — even though I’ve only been awake for a couple of minutes!
- Create rote tasks. As explained by Due’s Miranda Marquit, “Look for ways you can make mornings easier by creating rote tasks that are easy to accomplish. We don’t like to face a day that starts hard. Do what you can to make it easier. Once you’re up and moving, you’ll feel better and eventually be awake enough to tackle the
- Set goals for the day. This doesn’t have to be lengthy. Just list your top priorities for the day.
3. Change it up
There’s an old saying: Variety is the spice of life. Variety keeps you motivated to meet goals when you haven’t yet made much progress and risk falling into a rut.
Changing things up is like your workout routine. You can’t just work on your legs. Other parts of your body need some loving too. Keep doing the same exercises and you’ll soon plateau.
The same is true for any aspect of your life. Changing things up gives you a chance to break up the monotony, try out new skills, and have new experiences that can lead to new ideas or develop a new passion.
4. Chart your progress
This is a simple way for you to see how far you’ve come along. Sounds simple, but think about when you set a reading goal. Maybe you want to read more books. Your initial goal is to read for just five minutes a day, but once you start you’re reading for ten minutes and then 30 minutes and soon you’re flying through books.
If you can do 30 minutes, then why not bump up to 40? Just imagine all the books you’ll be able to read. Mark this on your calendar each and every day.
5. Create environmental anchors
This is simply writing your goals or inspiring quotes on a Post-it or 3×5 card and placing it on the wall of your office, the inside of your car, bathroom mirror or calendar. A daily reminder of your goal will push you to accomplish it.
6. Develop gratitude
Just by identifying the one thing every day that you’re grateful for is powerful enough in helping you achieve both mini-goals and your big goals, since it develops the ability to look for a daily opportunity that you can grow from.
For example, if you’re grateful that you just landed a new client today, use that feeling and experience to secure two new clients tomorrow.
7. Discover your passion
Obsession can be an extremely powerful motivator since it creates its own motivational might. In fact, the most successful individuals are those who chased their passion and are doing what they love to do.
When you become passionate, whether it’s at work, exercising, or volunteering, it no longer becomes laborious. It becomes something that you enjoy, look forward to, and want to get better at.
This article was originally posted here on Entrepreneur.com.
From Local To Global: Bruce Mackenzie CA(SA) Shares Top Tips On Being A Successful Entrepreneur
Managing Director of W.Consulting, Bruce Mackenzie CA(SA), has done exactly that and shares his top tips.
How do you grow your own SME into a global consultancy? Managing Director of W.Consulting, Bruce Mackenzie CA(SA), has done exactly that and shares his top tips.
“I started W.Consulting with the aim of providing an independent, high-quality alternative for corporates and audit firms looking for advice on International Financial Reporting Standards (IFRS). The business has grown substantially to more than 40 people working globally, providing advisory services on IFRS, audit risk and corporate finance, training and IT product development.” These are Bruce’s five top tips for achieving growth.
1. Take the risk as soon as possible
It was a nerve-wracking decision to go on my own, as CAs(SA) are taught to be risk-averse. It’s very tough to throw away a CV, but rather than spend a life regretting not taking a chance, if you have thoughts of running your own business, do so sooner rather than later, as the decision only gets tougher with each passing year.
Related: Better Thinking For A Better World
2. Work hard and persevere
One point seldom emphasised enough when talking of entrepreneurs is that it is very hard work and requires a great deal of energy and perseverance. I attribute my success in large measure to high energy levels. You need that.
It’s exhausting — long days, early flights to London to deliver training, and sometimes back again the same day. So, yes, you need a surplus of energy.
3. Know how to sell yourself and your business
You also need a predisposition towards selling, as any business requires sales in order to expand. Selling is something that’s in my DNA.
Especially when selling advice, it requires persistence because I know that a potential client will at some point need services like ours, so I make sure W.Consulting is top of mind when that day comes. I achieve this by keeping up the relationship, sending new ideas with no sales angle connected, mailing interesting books, and checking on how things are with the client. It’s a matter of having genuine interest.
4. Hire trustworthy people who share your passion
There are many risks in establishing your own business and one of the first challenges stems from the need to expand beyond a one-man operation. There’s a certain comfort in doing all the work and seeing all the cash in the business as yours, but it puts a fairly low ceiling on the business’s prospects and potential income.
The decision to expand and hire your first employee is both a big decision in itself and important as to the individual you select. It’s the biggest single decision most entrepreneurs have to make — and one that most don’t make early enough. You need to scale up a business to release resources at the top. That process never really ends — whatever you’re currently doing, you have to continually ask yourself: “Could this be done down the line?”
In an SME, each hire, but especially your first, has to be somebody you can trust, someone with the same objectives as you. Instead of having 9 to 5 people, rather employ someone who will do whatever is necessary, regardless of what time of day it is.
My philosophy is to hire people with passion and who preferably know what they’re doing, and then pay well to get them.
5. Continue to innovate
Most businesses fail not for want of an entrepreneurial idea, but because of management and accounting basics like cash flow. CAs(SA) already understand these basics and so arguably can concentrate on the actual operations of the business. However, because CAs(SA) can earn good money in the corporate world, most opt for the easy route in the corporate environment.
The future and success of any business is to keep on doing what it’s doing well. Bruce attributes the success of the business to its culture of continuous innovation: “It’s easier to sell something new,” he concludes.
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