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Zenzele Fitness’s Clever Tactics To Grow In Next To No Time

Tumi Phake has built Zenzele Fitness into a serious business relatively quickly, but it hasn’t been easy. The company’s quick growth has been the result of some very clever tactics.

GG van Rooyen

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Tumi Phake always liked going to the gym. It was a place where he could relax and unwind. One day, while still working for a prominent South African bank, he started wondering about the small gym that the bank had on the premises.

Where had this equipment come from? Who was responsible for it? What if you could offer the same sort of experience you’d find at a large commercial gym to corporate employees? Turning this dream into reality has been the focus of Phake’s life for the last few years.

Related: Join The Fitness Revolution

Here are the lessons he’s learnt along the way.

1. Do Your Research

Phake had spotted an interesting opportunity to offer in-house gyms to companies, but he took his time pursuing it. Instead of rushing in, he first did his research.

“The company was officially launched in 2013, but I was working on the business way before then. In fact, it took a few years from conceiving the idea to starting the business. I made sure that I would be ready when I eventually launched,” says Phake.

Lesson:

Business strategy doesn’t start the day you open the doors to your business. If done correctly, it should start well in advance. Some careful research and development done ahead of launch can often save you a lot of time, money and hassle later on.

Sure, it’s tough to stay calm and bide your time when you’ve stumbled upon a great business idea, but it’s important to sometimes take a step back and critically assess if your idea is really viable. Be sure to speak to experts in the field and prospective customers.

2. Find The Right Partner

Early on in the creation of Zenzele Fitness, Phake realised that he needed a partner. Many entrepreneurs refuse to acknowledge this reality, even long after their businesses are up and running.

Phake was not under any illusions — he needed a partner who knew the industry well. As an outsider to the fitness industry, he wasn’t equipped to launch a fitness business on his own.

Phake approached someone he knew through his position at the bank — someone who was well established in the industry. Not only could this person provide valuable insight — but he could also leverage his contacts in the industry to smooth the way for Zenzele Fitness.

Lesson:

Great founders often come in pairs. Very few individuals have all the skills and knowledge needed to launch a business, which is why finding the right partner can often mean the difference between failure and success.

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3. Funding Begets Funding

Phake needed money to launch Zenzele Fitness. He needed to purchase expensive training equipment, which meant bootstrapping wasn’t an option. He was lucky enough to secure R5 million in funding from the Awethu Project, but this wasn’t enough.

The good news is that funding often begets funding. With each person who shows a willingness to invest in you, it becomes easier to get more funding.

After receiving the funding from the Awethu Project, Phake managed to get another R7 million in debt funding, thanks to that initial investment.

Lesson:

Accessing debt funding can be hard, especially if you don’t have many assets to be put up as collateral. Because of this, it’s a good idea to try to get some outside equity funding — even if it’s not the whole amount needed. This funding could be enough to secure a loan, which would help you avoid having to give away any extra equity.

Related: Healthy Body20 Franchise Leads To Happy Hearts

4. Proving ROI Through Data

In many ways, Zenzele Fitness enters a partnership with the corporates where its gyms are located. Most companies pay a portion of employees’ membership fees, and don’t charge Zenzele rent.

This is obviously a great position to be in, but it also means that clients will expect some sort of ROI. So how does one show that?

“It’s all about data,” says Phake. “Too often, South African companies go to clients with overseas data. This is not the way to do it. You can’t assume that overseas data is just as relevant here.”

Because of this, Phake is actively generating data that shows unequivocally that this sort of fitness initiative has a positive impact on business.

“Companies are definitely becoming aware of the fact that health and wellness in the workplace is important, but you still need to show some sort of ROI,” says Phake.

“For instance, we recently took 100 high-risk people and put them on a 12-week programme. By the end of it, we had managed to reduce serious risks by 30%. This is the sort of significant impact that companies are willing to invest in.”

Lesson:

‘Selling’ your offering is not enough. Your slick pitch needs to be backed up by some proper data. Don’t ask prospective clients to simply believe that you can improve their businesses — show them.

5. Reduce Your Risk

As with most businesses that are capital intensive, there is some risk in spending loads of money on equipment that might never be utilised. What if the gym didn’t attract workers? Or what if workers were slow to sign on?

“We reduce our risk in two ways,” says Phake. “Firstly, we try and sign on as many people as possible early on. We typically try to sign on enough people before the doors even open, to break even on a month-to-month basis. We also negotiate with clients and ask them to guarantee a certain level of monthly membership fees, especially during the early months.”

Lesson:

As the adage goes: Everything is negotiable. Enter into a real partnership with clients where risk is shared and mitigated.

Related: Free Sample Business Plans


Do This

If you have a B2B business — especially one that aims to attract corporate clients — it’s incredibly important to be able to prove the ROI on offer. Solid data can play a huge role in signing up new customers.

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Can Being Deceptive Help You Build Your Business? It Worked For These 5 Entrepreneurs

We’ve all told little white lies. But what about the big ones? What if telling them would bring your business success?

Jayson Demers

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We all commit little acts of deception, like saying we got stuck in traffic when we were really late to the meeting because we wanted to watch the last five minutes of a favourite TV show. Little white lies? I’ve told them. You’ve told them.

But what about big lies, the kind truly lacking in integrity – like misrepresenting your sales to a prospective investor?

Obviously, there are often severe consequences to lying. Depending on the context, you could lose the trust of a peer, break a professional relationship or even face legal action. Yet, despite these consequences, lying is more common in the entrepreneurial world than you might think.

Just take as an example these five entrepreneurs, who might not be as well known or successful as they are if it weren’t for some clever acts of deception:

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Three Habits That Underpin Entrepreneurial Success

Here are three powerful habits that will help you stay focused, define your entrepreneurial attitude and take your business from zero to hero.

Nicholas Bell

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Successful people and businesses don’t all share the same traits and commitments. Yes they all have managed to break barriers and achieve impressive goals. They’re the leaders, the movers, the shakers and the industry creators. However, not all entrepreneurs are created equal and their recipes for success can differ wildly.

Some swear by a three-hour run every morning followed by a nice salad and the bustle of busy work life. Others need an incredibly early start so they can spend time with their emails and focus on their business. Every entrepreneur has their  own secret tricks that keep them on the straight and successful narrow, but most share a few simple habits that are guaranteed to make a difference.

Here are three habits that will help you become better at business and at leading others towards long-term success:

1. Always be ready to change your assumptions

Many people are unable to change the assumptions they have about their business and its future as it evolves. No business model should be locked in cement and rigidly upheld, it will need to adapt and adjust as it grows and customer needs change. As an entrepreneur you need to understand this concept and be prepared to evolve and change in new directions and markets.

Related: Business Plan Format Guide

This also ties into failure. Do you understand why you failed at something? Are you aware that perhaps your business model is changing? Can you learn from these experiences? Can you adjust your business model, get better research, refine your ideas? If you are ready to take positive value out of these moments and experiences, then you are an agile and inspired entrepreneur.

2. There’s no off switch

Passion and commitment are absolutely key to the success of your business and your own personal growth. You can’t switch off or walk away or just take a sick day because you feel like it, not if you want to stand as an example to your employees or if you want to build a brilliant business.

It may sound trite and tired, but a work ethic is the single most important habit to have as an entrepreneur. You need to always hold yourself to the highest standards, commit to ethical practice and work harder than anyone else.

3. Take it personally

This doesn’t mean gentle sobs in your office when Susan from accounts ridicules your maths skills. If you take your business personally, then you are wrapping the skills learned in points 1 and 2 above into one cohesive whole – you are embedding your passion into every crevice of your company. Care about what you do, be passionate about what it stands for, and be prepared to fight for its life. The route from zero to billion-dollar business isn’t easy. If it was, everyone would be doing it.

Remember, the idea is only 1%. Sweat, work, commitment and focus are the other 99% of the success equation.

Related: 22 Defining Entrepreneur Characteristics

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Head Of Audi South Africa Shares His Top Lessons On Weathering The Storm In Turbulent Times

When the economy isn’t playing ball, it’s time to roll up your sleeves, face your challenges head-on, and get to work, says Head of Audi SA, Trevor Hill.

Nadine Todd

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Vital Stats

  • Player: Trevor Hill
  • Position: Head of Audi South Africa
  • Visit: www.audi.co.za 

“In everything we do, across the organisation, we ask this question: Is it the best? That’s our value proposition. Without it, we don’t have a clear direction for everyone to follow.”

Some of the biggest brands in the world are well-known for keeping things lean. Amazon is a prime example, where even Amazon-branded employee backpacks are reused. Many bloated organisations learnt the hard way in 2008 that if you aren’t efficient and focused on the bottom-line, you’ll struggle to survive in competitive and volatile environments. On the other hand, businesses that were already lean and flexible not only survived the recession — many of them actually thrived, mainly because they were far better equipped to handle new economic realities than their competitors.

According to research conducted by Bain & Co’s authors of The Founder’s Mentality, Chris Zook and James Lane Allen, 85% of the biggest growth challenges large-scale organisations face are internal. This doesn’t mean the economy and competitors don’t matter. But the way leaders and managers of those organisations react to economic and external stimuli does.

Trevor Hill, Head of Audi South Africa, is well-versed on the impact external stimuli can have on a brand — even an established premium brand like Audi South Africa. Economic and political conditions in South Africa have impacted consumer confidence, and the premium vehicle market has experienced year-on-year double digit declines over the past three years. “The premium market is almost half the size it was three years ago in South Africa,” he explains. “Consumer confidence, the high pricing of premium cars, and a general buying down trend have really impacted our market. Three years ago, we were selling close to 20 000 vehicles per year. Today we sell around 10 000 vehicles. You can’t ignore market conditions. You need to face them head on, and do what’s best for your employees, the brand and your consumers.”

Related: 10 Ways To Develop A Success-Oriented Mindset

Here are Trevor’s five lessons for weathering the storm so that your business and brand are well positioned when market recovery begins.

1. Have a clear value proposition that everyone understands and embraces

“We will never be the biggest in the South African market,” says Trevor. “Mercedes-Benz and BMW produce in South Africa and have an advantage over us in terms of export credits. If we can’t be the biggest though, we can focus on being the best. That is entirely within our control.

“Our ‘Best’ strategy says that we want to be the best organisation, have the best product, the best brand and the best customer service. Everything we do must be looked at through this lens – is it the best? If we host an event, have we chosen the best venue, event organisers and caterers? Does the look and feel match our standards? If we can’t be the best — we don’t do it.

“In everything we do, across the organisation, we ask this question: Is it the best? That’s our value proposition. Without it, we don’t have a clear direction for everyone to follow.”

2. Understand what’s in your control and then roll up your sleeves and get it done

The rate cut at the end of 2017 really helped the premium market towards the end of the year. The problem is that there are things you can control — such as running a lean organisation — and things you can’t control, such as whether or not there will be another rate cut. So how do you ensure a proactive culture rather than a defeatist mentality when times are tough?

“The spirit of Audi has always been to challenge boundaries, roll up our sleeves and forge our own future,” says Trevor. “It’s in our ‘Vorsprung’ DNA. This has never been more applicable than when we’re weathering a storm, but it has to be fostered when the waters are calm.”

The theory is straightforward. If an organisation isn’t used to challenging boundaries and being in control of its own destiny, it’s difficult to find those characteristics when they’re really needed. When something is woven into a brand’s DNA, it’s because it’s always there, and the organisation’s entire culture supports it.

Trevor can point to examples everywhere. For example, in the 1980s, Audi was the first car manufacturer to put a five-cylinder engine and four-wheel drive on a rally car, and cleaned up two years in a row as a result.

“The Audi spirit is that you can improve anything. You just need to be willing to put in the work.”

Faced with extremely tough local conditions, the South African team is now doing just that: Rolling up its sleeves and finding solutions.

“This is how we handle the business as a whole. We’ve been completely upfront with head office and our investors about current market conditions, but we aren’t complaining — we’re putting the facts on the table, showing them what we can control, and unpacking how we’re going to see the business rolling forward. Because of that attitude and transparency, we have everyone’s full support.”

3. Never throw money at a problem; smart solutions aren’t necessarily the most expensive

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“Spending a fortune on brand campaigns isn’t going to change the reality of the current market conditions,” says Trevor. “It’s easy to throw money at a problem, but then what? We’ve taken a different approach. We’ve selected a number of brand ambassadors whose values really align with our own. These include TBO Touch, Cameron van der Burgh, Wayde van Niekerk and Nomzamo Mbatha. Their followers know what they stand for, and associate Audi with those same values. It’s a much more targeted and niche way to gain awareness for our brand.”

For Trevor, not throwing money at a problem is a value that should be ingrained in an organisation. “We approached 2018 with this value top of mind. At the end of 2017 our management team went away for a strategy session. We collectively took a look at the entire business and asked what we needed to do to drive this business through the stormy waters of 2018.

“Each manager then got a target for their division that was aligned with the other divisions and organisation as a whole. They then conducted individual strategy sessions with their teams. The whole thing was a problem-solving mission: This is the budget we have, this is where our focus needs to be, now how do we go out and deliver the best? What’s our plan?

“These plans were then aligned with each other to ensure everyone was going in the same direction, and we measure everything. My KPIs filter down to the management team, and theirs filter down to their teams. It’s a very inclusive system; everyone can workshop the problem, and in that way we don’t only gather some out-the-box ideas, but we get everyone’s buy-in as well.”

Related: You Need This One Trait To Succeed In Reaching Your Goals

4. Encourage your team to try new things and communicate collaboratively

Very often, individual divisions communicate well together, but the message and camaraderie is lost across divisions, particularly between sales and marketing. “We’ve found two ways to encourage participation and camaraderie across the business,” says Trevor. “The first is that we always encourage new ideas. If something is tried and tested and doing well, especially in marketing, try to own that property. But if something isn’t giving you what you want, change it. We’re often too scared to change things that aren’t working or to try something new. We encourage participation and thinking differently. The bigger your pool of ideas, the more you have to work with.”

The company also has a number of monthly meetings that bring different divisions into the same room for workshop sessions. “We have a lot of field staff who aren’t often in the office. We need to keep communicating with them to pull them into the fold,” explains Trevor. “For example, once a month we have marketing and product meetings. The marketing, product and sales teams all attend. It gives everyone an opportunity to know what’s happening and hash out any questions or issues then and there. The communication between divisions — particularly marketing and sales — is much better as a result.”

5. Keep your core motivated

Like many industries, there’s a lot of employee movement in the consumer and premium brands segment. “People move. That’s the reality of job markets around the world,” says Trevor. But stability is important, and at Audi SA, that means identifying your core employees and keeping them happy.

“We have a very strong core. Within the organisation we’ve identified a core group of employees whom we absolutely need if we’re going to continue to run this business efficiently and successfully. Once you’ve identified your core, you need to keep them happy, and that’s about a lot more than their paycheque.

“Different people want different things — advancement, developing their careers, an opportunity to work abroad or perhaps spend more time with their families at home.”

The lesson? Figure out what’s important to each member of your core and try your best to give it to them. Success is a team sport — you need to keep that core team in your corner.


MAKING A SUCCESS OF NEW TERRITORIES

Trevor Hill began his career with Audi as an area manager in 1989. In 1997 he left South Africa to join Audi’s head office in Germany. Since then he has headed up divisions in Germany, Japan, China, Dubai and South Korea. One of the biggest lessons he’s learnt through his travels is that while there are certain business fundamentals that hold true everywhere, each culture has its own way of doing business, and you need to understand what that is on the ground if you’re going to make an impact and be successful.

“One of the biggest things I’ve had to communicate back to head office is that each territory operates slightly differently,” explains Trevor. “For example, in Germany, you have 100 days in any new job to prove yourself. If you don’t make something happen in those 100 days, you’re not seen to be successful. This is impossible in Asia, where business is all about relationships. You have to develop a relationship based on trust and honesty, and that doesn’t happen overnight. Until you have that trust though, your employees and customers won’t work with you. When you enter a new territory, take your time. The first year is all about understanding the lay of the land. In the second year you can implement your strategy, and in the third year you can start reaping rewards.”

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