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Brimstone Investment Corporation: Mustaq Brey

Brimstone is at the forefront of empowerment in the Western Cape.

Juliet Pitman

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Mustaq Brey of Brimstone Investment Corporation

Mustaq Brey, a chartered accountant by training, battled to find somewhere to complete his articles in the 1970s, but eventually succeeded in becoming one of the first black CAs in Cape Town. His determination has stood him in good stead. He is the co-founder and CEO of broad based black-controlled company Brimstone Investment Corporation, which listed on the investment companies sector of the JSE Securities Exchange in 1998, becoming the first Cape-based empowerment company to do so. Brimstone, which has a portfolio of strategic listed assets, trading securities and private equity investments, is one of the Western Cape’s few empowerment successes with 2006 revenues at R378 million and headline earnings exceeding R1 billion. Its JSE market capitalisation increased to R1, 65 billion from R963 million at the end of 2005. The company’s strategic investments are focused on financial services, branded consumer products and technology.

Brey first set up his own business in 1985, after realising that South Africa was simply not producing enough black accountants to meet market demand. He built a national practice, KMMT Brey, consisting of 16 partners. In 1994, he and Fred Roberts, who is today the deputy chairman of Brimstone, visited the US as part of an initiative to encourage investment in South Africa. “That was when we discussed the fact that there were several empowerment companies that had been established in Johannesburg, yet not one in the Western Cape,” recalls Brey. “We agreed that we would set up our own BEE initiative on our return home.” The two came back to a fishing industry stand-off and, as a result of their standing in the community, were asked to intervene. This gave them exposure to Oceana fishing company. “We asked them to sell us shares in the company, which they agreed to do on condition that we raised R3 million without going to the banks. Fred was a teacher and I had all my money tied up in my business, so we agreed that we would each borrow R25 000 which we got from Investec. It was important to do this because we believe that you work much harder to win when your own money is in the game.”

They succeeded in raising a total of R11 million from shareholders drawn mostly from the Cape Flats. Brey highlights the company’s commitment to its investors and to making sure that Brimstone continues to place shares in black hands. “We have always had strong community backing and our aim is to be profitable, empowering, and make a difference to the lives of the people we are involved with.”
But Brey has faced his fair share of challenges too. After Brimstone listed, there was a correction in the market and the company’s share price fell from R4 to R1. “The vultures came and suggested to us that we de-list and sell out to them, but we refused,” says Brey. “We got a terrible fright though, so we sold off our assets by June 1999 and paid out dividends to all our shareholders. That was when we decided to rebuild the company and keep it small.” Brimstone’s big break came in 2003, a year in which the company focused on partnerships. It acquired a 25% interest in Lenco and doubled its stake in Sea Harvest to 21,5%. But its most significant deal was involvement in the acquisition of Afrox Healthcare, at R3,5 billion the biggest empowerment transaction outside the mining industry.

“The most important lesson we learnt along the way was that you have to control your growth as you move forward. It’s important to set limits. Today we are far more cautious,” Brey says. Brimstone has undergone a consolidation phase over the past year and has sold off a large asset that has left the business cash flush and made investors very happy. “Our underlying philosophy is to involve Brimstone in ventures that deliver sustainable, quality earnings for our investors, and enable us to have a positive social impact.”

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Watch List: 50 Top SA Small Businesses To Watch

Keep your finger on the pulse of the start-up space by using our comprehensive list of SA small business to watch.

Nicole Crampton

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Entrepreneurship in South Africa is at an all-time high. According to Global Entrepreneurship Monitor (GEM), total early-stage entrepreneurial activity has increased by 4.1% to 11% in 2017/2018. This means numerous new, exciting and promising small businesses are launching and growing.

To ensure you know who the innovative trailblazers are in the start-up and small business space, here are 50 of South Africa’s top establishing companies to watch, in no particular order:

  1. Livestock Wealth
  2. The Lazy Makoti
  3. Aerobuddies
  4. Mimi Women
  5. i-Pay
  6. AfriTorch Digital
  7. Akili Labs
  8. Native Décor
  9. Aerobotics
  10. Quality Solutions
  11. EM Guidance
  12. Kahvé Road
  13. HSE Matters
  14. VA Virtual Assistant
  15. Famram Solutions and Famram Foundation
  16. BioTech Africa
  17. Brand LAIKI
  18. Plus Fab
  19. LifeQ
  20. Organico
  21. 10dot
  22. Lenoma Legal
  23. Nkukhu-Box
  24. Benji + Moon
  25. Beonics
  26. Brett Naicker Wines
  27. Khalala
  28. Legal Legends
  29. The Power Woman Project
  30. Aviro Health
  31. AnaStellar Brands
  32. Data Innovator
  33. Fo-Sho
  34. Oolala Collection Club
  35. Recomed
  36. VoiceMap
  37. ClockWork
  38. Empty Trips
  39. Vula Mobile
  40. SwiitchBeauty
  41. Pineapple
  42. The Katy Valentine Collection
  43. OfferZen
  44. KHULA
  45. Incitech
  46. Pimp my Book
  47. ART Technologies and ART Call Management
  48. Prosperiprop
  49. WAXIT
  50. The Sun Exchange
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How 28-Year Old Entrepreneur Adam Fine Is Leveraging The Global Phenomenon Of Five-A-Side Football

Adam Fine of Fives Futbol discusses how he leverage a global phenomenon and the value of strategic partnerships in business.

Monique Verduyn

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Vital Stats

Nothing about Adam Fine is by-the-book. The 28-year-old entrepreneur describes himself as a slightly big child. He’s the CEO of one of the most exciting start-ups in South Africa, having leveraged the global phenomenon of five-a-side football to start a business that has grown almost as fast as the game itself. Not bad for a venture that was launched with the princely sum of R85 000 — Fine’s life savings at the time.

He started it in 2011, with a strong focus on corporate social investment and making a positive social impact. It was by forming strategic partnerships that Adam really managed to grow Fives Futbol. He’s opened pitches in prime locations that serve both the school and corporate markets, while still being accessible for social impact interventions in local communities.

Related: 3 Local Entrepreneurs Share Their Business Challenges And How They Overcame Them

Pivoting at the right time is key to growth

The challenge:

In the last 18 months, Fives Futbol has trebled in size, and achieved some amazing milestones — it now employs 50 full-time staff, and 80 part-timers. It’s one of the factors that drives Adam, as many of his employees support up to eight family members. It’s now also represented in four provinces and 15 locations around the country. By September, there will be 18.

Quick growth means you have to be able to pivot quickly when things do not go according to plan, and mostly they don’t, Adam says. “If things are not working you should be able to ‘pivot’, to shift your focus. And do it fast. It’s not a sign that things have gone wrong by any means, on the contrary, it means you have the insight to recognise that there is a problem with the assumptions on which you have built your business model. The decision to pivot is a big one, and not something to be taken lightly. It requires you to take a hard look at your reallocation of resources, and to do it with an open mind.”

The solution:

In Adam’s case, construction delays, councils taking their time to approve, or having to put money into rolling out sites as opposed to marketing, means the promotion of a new site will slow down, for example, because the business does not yet have a large marketing budget.

“When we run behind on the construction of a new site, R40 000 can suddenly become R100 000 — but here’s the thing: If a deal comes along that will probably harm your business in the short-term but enable significant long-term growth, sometimes you have to juggle what you have so you can make it work.”

The Lesson: Choose your investors carefully

Fine says he’s lucky to have a solid group of investors that he has cultivated over six years. “Their input is invaluable. They’ll say, ‘slow down’ or ‘have you thought of this?’, ‘have you factored in that?’ The ability to develop a good relationship with our investors has had a significant impact on the success of the company. Over and above money, they provide wisdom, guidance and connections.”

His relationship with his investors is key. While many entrepreneurs make it just about the money, Adam understood something else — he has a pretty cool brand with a great cause behind it. So, while investors are asked for money all the time, he was able to offer something more than just a business idea — alignment. He generated enthusiasm for the ‘why,’ behind the business. Like most of us, it makes investors happy to know that they are helping to make a positive difference.

And while it’s easy to bandy about the word ‘partnership’, Adam has worked hard to make that a reality. He set out to find like-minded people who are passionate about the business and the cause, which is why they are able to serve as great resources for advice and insight.

Related: Richard Branson’s ABCs Of Business

“The best way to ensure that you and your investors have a valuable and lengthy partnership is to make sure that everyone is aligned on the vision.”

This includes Adam’s team. The internal culture of an organisation is vital to its strength and growth. “Without our team we don’t have a business for investors to support — our people are critical to our success. They’re the executors of the vision at the end of the day.”


The Lesson:  The value of strategic partnerships

Much of the growth of Fives Futbol has been fuelled by finding the right sponsorship partners in key industries. To overcome the challenge of a limited marketing budget, Adam has secured sponsorships with big brands like Adidas, Total Sports, Debonairs, and Klipdrift, allowing Fives Futbol to use their access to communities as a marketing platform to derive income as well as scale. And it works both ways.

“Because we have a national footprint and a team of people, we run activations for our partners, which also provides us with an ancillary revenue stream,” he says. “Knowing how to join forces with other businesses has been a key factor in making the business successful. Our strategic partners have enabled the business to leverage their brand to give us more exposure. When it works well, a strategic partnership can be just what you need to speed up the growth of your business.”

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Watch List: 15 SA eCommerce Entrepreneurs Who Have Built Successful Online Businesses

The advent and advancement of the online marketplace has led these entrepreneurs to successfully build and grow their ecommerce empires.

Diana Albertyn

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South Africa’s ecommerce market is worth R10 billion per year. By 2021, the number of online shoppers is expected to have reached 24.79 million.

“Our recent research on SA shows people are browsing three hours or more on their mobile phones and 25% shop online. They trust local brands,” says Geraldine Mitchley, Visa senior director for digital solutions in sub-Sahara Africa.

These entrepreneurs have cashed in on ecommerce and launched successful online stores that have either established their dominance in the market, or are taking the e-tailing world by storm.

Here’s how these 15 ecommerce capitalists are making money using the Internet:

  1. Aisha Pandor
  2. Andrew Higgins
  3. Kerryn Tremearne
  4. David Davies
  5. Andrew Smith, Paul Galatsis and Shane Dryden
  6. Trevor Gosling
  7. Nicholas Haralambous
  8. Justin Drennan
  9. Neo Lekgabo
  10. Ryan Bacher
  11. Tracy Kruger
  12. Luke Jedeikin
  13. Tarryn Abrahams
  14. Sascha Breuss
  15. Antonio Bruni
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