Vusi Thembekwayo has made mistakes and learnt hard lessons, but he’s also built a R140 million plus business before his 30th birthday, and he’s managed to do it without killing the proverbial chicken.
These are his top lessons for entrepreneurial success:
You’ve Got to Practice your Skills
For Thembekwayo, most of what he knows today in business he learnt during that four year period.
“My own experience has taught me that former middle-managers of large corporates often have the skills to succeed as entrepreneurs. Entrepreneurship is a practice thing. You’ve got to practice the skills of general management, and corporates teach you that.”
Cash is King: Learn to Manage Money
Thembekwayo’s a natural entrepreneur. He sees an opportunity and wants to go for it – but there’s an ecosystem of things that need to collude in order for you to succeed.
“I wouldn’t have been able to do what I’ve done today if I hadn’t spent that time at Metcash,” he says.
“First, I learnt how to manage money. The business had a very strong treasury function. Cash is king, especially if you’re trading high volumes at low margins. My worst nightmare was the MD of the treasury department. He was always asking me questions I hadn’t thought of. I admired his technique but despised our conversations.
He saw the risks that we hadn’t spotted, and was the first person to tell us when we were not on track to collect our aged debtors and the impact that had on our profit and loss statements. But thanks to his attention to detail, I learnt how to manage money, and more importantly, how to be frugal. Today, if I don’t have to spend on it, I don’t spend on it. It’s amazing how far a rand can go if you’re clever.”
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.
Your Vision is Transferable
“I learnt how to manage people. Vision is transferable. It’s your job to help your team see the future that you see. You need to get them to really invest in the process, because business is a process.
Differentiate. Differentiate. Differentiate
“I learnt how to differentiate. We were operating in a very commoditised market. At the end of the day I sold mealie meal and baked beans. It’s tough to differentiate in a market that’s all about price. Some of our competitors tried the BEE route. I didn’t see the point.
Sometimes You Must Take The Risk
Did our customers really care if we were black empowered? Instead, I needed to figure out what they did care about. What did they want? And what could I give them that wasn’t inextricably tied to price? The answer was lines of credit.
All procurement officials have the same problem. They need stock to give to their end clients, but they need money to pay for that stock. In this market, most businesses want cash upfront.
We turned that around and said we were happy to take the risk. I had a R17 billion balance sheet that I could leverage to offer credit. And so we went to market offering a R500 000 credit facility for stock, to be paid after 30 days.
If after three months the customer traded according to certain terms, we’d extend the line of credit to R1 million over 45 days. All of a sudden the sale went from, ‘Are you going to deliver Iwisa at R19,99?’ to ‘Hold on, what did you just say? You’ll give me credit? Can I give you the order tomorrow?’”
Give Your Business The Best Chance Of Success
For that to happen an entrepreneur must distil the business’s reason for being and then doggedly pursue that vision.
In my capacity as a business owner and venture capitalist, one of the questions I get asked most often by entrepreneurs is, “how do I ensure my business succeeds?” While there’s no straightforward answer, there are important elements that I believe every entrepreneur must consider to ensure the greatest probability of success.
Firstly, no business will succeed if it doesn’t solve a unique pain point or problem for modern consumers or businesses. However, even if a business is able to carve out that niche, there’s no guarantee that growth will follow. For that to happen an entrepreneur must distil the business’s reason for being and then doggedly pursue that vision.
North Star metric
This principle of having a clear business vision guides all my decisions. Whenever I need to validate a choice or a change in strategic direction, or if I’m trying to determine what to focus on, I always refer back to my vision. If the two are incongruent, then I know I need to change tack.
Elon Musk is a great example of a successful entrepreneur who is guided by his grand vision. Everything he does, from Tesla to SpaceX, pertains to sustainability, both for the planet and the human race. It might be hard to make the connection when you consider his various businesses out of context, but everything he creates fits into a broader ecosystem that in some way moves the needle towards his ultimate objective. Developing Tesla cars that run on renewable energy is but a small, short-term plan that feeds into his grand vision, yet it’s also been the catalyst for the evolution of the motoring industry.
Related: The Popimedia (Mega) Success Story
Be clear, concise
In the same way, every decision an entrepreneur makes should in some way take them a step closer to realising their vision. In this regard, it is also vital that your vision is crystal clear – a murky or undefined vision will divert you off your path to success.
That’s because you’ll tend to focus on the wrong things, especially when scaling rapidly, or when running bigger organisations, because there are many tasks to complete every day. A lack of clarity also leads to poor decision-making, or, worse, decision paralysis, and that’s business suicide – I’d rather make a bad decision than no decision at all, because it prompts action. However, with a clear vision, more often than not, those decisions will be correct.
Defining your vision
So, how do you know if your vision is clear and, more importantly, relevant and consequential? The way I stress test my vision is to evaluate it every day against the decisions I take, and the direction of the business. This daily process helps to sharpen my decisions over time.
The other step is to remain open-minded enough to accept and acknowledge criticism, and take on board advice from trusted confidants and impartial experts. This is important, because you need to craft your vision based on as much information as possible, including valid criticism.
Ultimately, though, your vision for the business should align with your purpose. Forget about money and turnover as points of departure when defining your vision. These are merely metrics that can determine the strength and effectiveness of your business strategy.
For each of my several business interests, be it VC funding or ad-tech innovation, I have different visions. Each are meaningful to me, but in every instance, I don’t wake up every day with the sole ambition of making money.
While I need to make money to grow these businesses, or build something new, having purpose and vision are the ways I pull through those inevitable challenging situations. Having your vision front of mind in everything you do helps you make better decisions, and makes the hardships easier to endure. It helps you see through the turmoil, because you know where the process will lead, and you always know where the ultimate objective lies.
Jimmy Choo’s Co-Founder Explains Why There Are No Small Jobs
Tamara Mellon shares the strategy that has helped her find new opportunities throughout her career.
The co-founder of Jimmy Choo, Tamara Mellon, believes that you can find inspiration and opportunity anywhere. All it takes is determination to keep going and a keen eye for observation.
Mellon began her career in the early 1990s working as an accessories editor for British Vogue. Always on the hunt for up-and-coming designers, she came across Jimmy Choo, a cobbler working in London’s East End.
She would commission him to create shoes for fashion shoots. They were so well received by readers that the pair realised they could expand beyond one-of-kind pieces for the pages of the magazine.
This article was originally posted here on Entrepreneur.com.
6 Habits Long-Time Millionaires Rely On To Stay Rich
It’s a simple fact: Most millionaires have different habits than the average person. However, these habits are far from inaccessible; they improve one’s odds of finding success but can be adopted by just about anyone with a bit of concerted effort.
To take that idea one step further, once someone has become successful, how do they stay successful? Here, I’d like to take a slightly longer-sighted look at the habits of millionaires, focusing not just on the habits that make them successful but the ones that help them stay successful over time. By cultivating these habits in your own life, you’ll be investing in your own sustained success over time.
Here are six habits of long-time millionaires:
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