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BiBi Cash & Carry: Tommy Makhatho

Free State retailer carves a niche for himself in the supermarket sector

Monique Verduyn

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Tommy Makhato of Bibi Cash & Carry

The rise in the spending power of blackconsumers is boosting South Africa’s retail sector, but there are fewblack-owned retailers able to take advantage of this trend. One exception isTommy Makhatho, CEO of BiBi Cash & Carry stores, whose Free State-basedstores turn over R250 million a year.Makhatho left school in 1976 at the end ofstandard nine and worked as a waiter at a restaurant in Joburg’s then swankyCarlton Hotel. One of his customers was a flashy hairdresser who always wore acowboy hat and drove a top-of-the-range left-hand-drive limousine.

“He liked me because I was curious abouthis business and eager to learn,” says Makhatho, recalling how the man gave himhis first break and employed him as a part-time trainee shampooist in hissalon. Makhatho went on to qualify as a professional hairdresser.In 1982, with R7 000 in the bank, hedecided to leave Blackwave and go it alone in Soweto, but he failed to build aclientele and was soon forced to ask for his job back. “I had beenover-ambitious and made the mistake of not planning properly,” says Makhatho.A year later he was on the road,distributing hair-care products and bed linen in townships in the Free State, Northern Capeand Lesotho.“I travelled thousands of kilometres every week and the business was doingwell. I quit my job again and opened a salon in QwaQwa.”

With the help of his wife, Thandeka, heopened six more salons in four years. But rapid growth made it difficult tocontrol the operation and the salespeople. “We couldn’t manage the businessfrom a distance, so we had to close the branches and go back to the originalsalon. We had, however, accumulated R300 000 in two years.” The experience taught him that distributinghair-care products from a main centre would be easier to control and manage.The Jabula Cosmetic Centre in QwaQwa opened in May 1991 and four othersfollowed. There were over 3 000 different stock lines, which meant the businessneeded more storage space and more sophisticated planning, management andcontrol systems. A warehouse was opened in 1992.In 1998, Makhatho entered the supermarket sectorand opened the first BiBi Cash & Carry Family Supermarket in QwaQwa. Allcompany profits were ploughed back into the business to fund expansion. Asecond store opened at the Setsing shopping centre in 1999 and a third at theNaledi Mall in 2004. In 2006 BiBi Wholesale was opened to servicesmall-to-medium enterprises. In April this year, a BiBi Cash & Carry storeopened in Bethlehem.In addition, the Makhatho family still has two hair salons.

“One of the most important lessons I havelearnt is that running costs always increase, so if you don’t expand you won’tmake a profit”. Accordingly, his company has created its own stokvel and hasmembers in many small Free Statetowns. “The stokvel industry is worth about R6 billion, so it makes sense totap into it. Our members bank their money with us, we give them vouchers andthey provide us with a list of their needs.”Makhatho is a firm believer in the power ofadvertising and spends 1% of the business’s total turnover on leaflets, flyers,SMS promotions and radio commercials. BiBi cash & Carry also advertisesextensively at funerals which typically draw large numbers of communitymembers.“We believe in conducting our businessprofessionally, progressively, honestly and with a commitment to address the needsof our predominantly black customers. Makhatho now employs over 540 staff,indirectly supporting over 2 000 people. The company also contributes tocommunity-based projects and provides scholarships to a number of universitystudents.“It’s my dream to expand the number ofstores and we are working on a franchising concept,” he says. “Townshipbusinesses were once considered risky, but now malls are popping up all overthe place. I’m proud to have been one of the first retailers to service people wherethey live.”

Contact: +27 58 713 0920

Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.

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25 Of The Most Successful Business Ideas In South Africa

Find out who’s making waves in numerous industries and how they managed to differentiate themselves in local and international industries.

Nicole Crampton

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“Disruption is all about risk-taking, trusting your intuition, and rejecting the way things are supposed to be. Disruption goes way beyond advertising, it forces you to think about where you want your brand to go and how to get there,” says Richard Branson.

South Africa has its fair share of innovative and disruptive businesses taking both local and international industries by storm. From cutting edge space technology to reimagined logistics, and innovative business models, here are 25 of the most successful business ideas in South Africa:

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Colin Timmis Says ‘Position Yourself For Success By Starting With The Numbers’

People pay first who they feel pressure from, so people will pay you when they feel pressure from you.

CEOwise

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Entrepreneur Colin Timmis founded South Africa’s first cloud accounting practice in 2011, Real Time Accounting. Then, a few years after being appointed as South Africa’s first Xero partner Colin became Xero Country Manager South Africa. Xero is the emerging global leader of online accounting software that connects small businesses to their advisors and other services.

Related: Pat Pillai On How He’s Helped Over 5000 Entrepreneurs Using 3 Key Steps

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Two 20 Year Olds Reshape Entrepreneur Landscape With New Social Investment Platform

The Merge vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.

Merge Connect

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It’s no secret that finding the right investor for your venture is a challenge that most entrepreneurs face. The current process of finding investment is one that is outdated, and limits entrepreneurs due to a lack of time, and network that is needed to find the right investor. But, this doesn’t have to be the case in today’s digital society, says Zander Matthee and Brandon Bate, co-founders of Merge.

“By making the Internet the middleman, we are able to connect with each other much simpler and faster than before” was Zander’s response. “We have taken advantage of this, and have created a digital meeting place for entrepreneurs and investors” added Brandon.

Merge is a social platform that connects entrepreneurs and investors. It aims to simplify, refine and accelerate the process of finding investment for entrepreneurs, and the process of finding investment opportunities for investors. From idea to developed, the platform allows entrepreneurs to present a brief outline of their venture to a network of all investor types. While doing this, entrepreneurs are able to browse through, and connect with investor profiles that suit their requirements.

Related: 8 Codes Of Success That Helped Priven Reddy of Kagiso Interactive Media Achieve A Networth Of Over R4 Billion

From Private Investors to Venture Capital, and everything in between, Merge allows all investor types to join. Investors have the opportunity to personalise their feed to suit their investment preferences, and will be able to connect with innovative businesses – that are looking for investment – at their fingertips. Only once there is a mutual interest in each other, are users able to enter a secure private chat where they can discuss further and share documents under the protection of a digital NDA.

The two boys became good friends during their time in high school at St Stithians Boys College. However, it was only in their last year, 2016, that they decided to pursue their dreams and create the platform. They didn’t know how to code, so rather ironically, they needed some form of investment to get the platform off the ground.

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“We knew we had a mountain to climb, but we believed in our vision and that we were really trying to make a difference, and if we could get others to see that, they would be onboard.” said Zander.

Related: Lessons From The Rich And Famous: Manage Your Money Like Oprah To Avoid Going Into Debt Like Nicholas Cage

Chris Peters is one of these individuals that bought into their vision, and became Merge’s first investor. As a successful entrepreneur and part time investor , Chris saw how much value the platform could bring to all entrepreneurs and investors alike. His marketing and strategic background gave him insight into how Merge could play a vital role in a lucrative space, Brand involvement.

“Entrepreneurship and SME development are two key factors that drive economic growth in developing countries like South Africa. That is why brands are currently getting involved, and looking to support entrepreneurs through various means. We have built a platform that allows these brands to successfully market, and execute on the programmes they have created to assist entrepreneurs.” said Chris

Merge was created to assist all entrepreneurs and investors in finding exactly what they are looking for, regardless of age, race, sex, financial position or social status. That is why anybody can sign-up as an entrepreneur. As long as you are determined and willing to work for your dreams. For too long has the investor space been seen as an “elite club for the select few”, and Merge is here to change that. Whether you’ve gotten your bonus at the end of the year and looking for new investment opportunities, or are an active investor, you can sign-up. Whether you’re currently working, or a retired industry leader, you can join as a mentor.

Their vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.

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