- Player: Derek Thomas
- Company: Letsema Holdings
- What they do: Business starters, transformation consultancy and private equity.
- Est: 1995
- Visit: letsema.co.za
Running multiple businesses under an investment holding company hasn’t always been an easy ride for privately-owned Letsema Holdings, and CEO Derek Thomas is the first to admit that growing Letsema’s private equity portfolio has been a challenge at the best of times.
Despite these trials Thomas and his partner, chairman Isaac Shongwe, have grown and developed several successful businesses from the manufacturing of wax microspheres for the global cosmetics industry to base chemicals trading and industrial welding.
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What’s the secret to multiple business growth?
An unconventional but effective strategy that involves conquering devils and hunting rock rabbits while avoiding the Frankensteins on the road to business success.
Face your devils
While growing and investing in multiple businesses it is inevitable that some will fail while others flourish along the way, and business failure is followed by consequences that business owners are often not prepared to face.
Ten years back Letsema Holdings invested in a greenfield investment when the market suddenly turned, leaving the business in a precarious financial state that could have led to bankruptcy. Instead of avoiding the inevitable, Thomas proactively set up a meeting with his company’s bank to discuss the situation.
“I had to say to the financial institution, ‘here I am, we owe you this money, and we can’t repay it.’” They were impressed, as tracing bad debt often took them up to three years to recover, and they would rack up expensive costs along the way. Some debtors would duck and dive instead of coming clean. Thomas and the bank discussed what they would be able to pay and the company was eventually able to make a settlement.
“You have to stare the devil in the face. Business is a collection of these inflection points and if you run away once from a difficult situation, you will always run away.”
Over-invest in your back office
When he joined his business partner, Isaac Shongwe in 1996, Thomas was given the task of managing the business’s administration. He registered it, ordered the accounting package and handed out the first laptop, but as the business grew he had to hand the function over, with dire consequences.
“A year or two later we owed tax when we thought we were doing well simply because we did not take the time to sort out the back office. This took many years to rectify and gave us invaluable insight – these days we over-invest in our back office and it’s now so effective that we use it as a shared service centre across all our businesses.”
Tiki Taka to build your team
One business under the umbrella of Letsema Holdings has successfully cracked the code for retaining staff without having to pay salary market premiums. The magic formula? Build confidence while developing competence.
“We developed a system that is similar to a soccer technique called ‘tiki taka’. Basically it’s a strategy of receiving the ball, and passing the ball so you can make yourself available to receive it again. Translated into business terms this is a process of receiving responsibility for a role in the business for one year, taking another year to master the role and a third year to hand it over to the next person.”
In a business that hires more graduates than professionals this has allowed for faster upskilling of employees. “It’s a system that allows us to build the confidence of our younger staff while increasing their competence. The output that we generate is incredible given the general inexperience within this team.
Respect the rock rabbit hunter
Your business growth is based on bringing in larger contracts and bigger client accounts, and businesses often celebrate the established staff that bring in the bigger deals. But Thomas has witnessed that this company culture can lead to an alienation of younger employees in the business who might not yet have established their networks or mastered the art of bringing in bigger clients.
Thomas recognises that it is important to respect the younger staff who he refers to as the ‘rock rabbit hunters.’ “If your culture is one of only celebrating the mammoth hunters in your tribe then you will have an unbalanced company. Your business will never succeed because the youngsters will feel alienated,” Thomas cautions.
“Today’s rock rabbit hunter is tomorrow’s woolly mammoth hunter. No employee starts out as a woolly mammoth hunter; rather you begin by bringing in the smaller accounts – hunting rock rabbits – slowly building up to the bigger prey.”
Don’t outsource your salvation
As Letsema Holdings continued to grow, a decision was made to bring in executive leaders with expertise to help take the business to the next level. It was a decision that they eventually regretted.
“We brought in a succession of people who were going to grow us into a much bigger company. One executive turned out to be a crook who defrauded us; another was all talk and no action.
“If you are going to outsource your salvation, and hire the great saviour while compromising on your values and ethics in pursuit of growth, you may end up creating a Frankenstein-type environment.”
The company found that its culture had substantially shifted, creating a divide between the non-performing executives and employees on the ground who were adding actual value to the business.
“We made decisions that we weren’t ready to make. Instead we should have continued to grow our company while building quality relationships instead of chasing after what we thought would be our business saviours.”
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.
“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:
- I Am Emerge Provides An App For Township Spaza Bulk Purchasing
- Tuluntulu Offers High Quality Video Streaming On Low Data Speeds
- SSG Consulting Developed KEY360: A Cloud-Based And Web-Enabled Platform For Managing Large-Scale Construction Projects
- Pargo Solving Last-Mile Distribution Challenges
- HouseME Is A Digital Real Estate Platform
- Olympic Paints Has Developed A Built-In Paint Tray Causing An Unexpected Industry Shift
- Passion4Performance Developed A Recognition of Prior Learning Assessment Concept
- NewSpace Systems Delivers High Quality Components At Lower Costs
- My Online Presence Creates End-To-End Solutions For Online Brand Presence
- Skynamo Offering Insights To Sales Teams In The Field
- RecruitMyMom Creating A Platform For Job-Seeking Moms
- GAAP Provides A Hardware And Software Point-Of Sale And Enterprise Solution For The Hospitality Industry
- HeroTel Bringing Wi-Fi To Low Income Communities
- Saryx Engineering Offers Digitised Compliance and Safety For Companies
- BrightBlack Is An Energy Providing Innovative Solar Energy Solutions
- Howler Is An Event Technology Platform
- execMobile’s PocketWifi Keeps Business Travellers Connected
- Rhino Africa Provides Online Touring Assistance
- Snapplify Is Offering Students Access To Textbooks
- GoMetro A Commuter-Driven Mobile App
- Domestly Connecting Cleaning Professionals and Homeowners
- NMRQL Using AI To Deliver Consistent Returns
- Colony Live Connecting Users Across Multiple Platforms
- codeX Is Growing The Work Experience Of Coders In Africa
- This Is Me – Disrupting By Offering A Unique Business Model
27 Of The Richest People In South Africa
Here are 27 of South Africa’s richest people, but how did they achieve this level of wealth? Find out here.
Learn the secrets of SA’s most successful business people, here is the list of the 27 richest people in South Africa:
In a world with growing entrepreneurship success stories, victory is often measured in terms of money. The feat of achieving a place on this list is, however, years of hard work, determination and persistence. “One has to set high standards… I can never be happy with mediocre performance,” advises Patrice Motsepe.
From the individuals that made the 27 of the richest people in South Africa list, actual entrepreneurs and self-made business people dominate the list; while those who inherited their fortunes have gone on to do even bigger and better things with their wealth. Over the years, some have slipped off the list, while others continue to climb higher and higher each year.
- Elisabeth Bradley
- Sharon Wapnick
- Bridgette Radebe
- Irene Charnley
- Wendy Ackerman
- Paul Harris
- Wendy Appelbaum
- Mark Shuttleworth
- Desmond Sacco
- Giovanni Ravazzotti
- Markus Jooste
- Gus Attridge
- Gerrit Thomas Ferreira
- Cyril Ramaphosa
- Adrian Gore
- Raymond Ackerman
- Michiel Le Roux
- Lauritz Dippenaar
- Jannie Mouton
- Stephen Saad
- Patrice Motsepe
- Allan Gray
- Koos Bekker
- Ivan Glasenberg
- Christoffel Wiese
- Johann Rupert
- Nicky Oppenheimer
Watch List: 50 Top SA Black Entrepreneurs To Watch
South Africa needs more entrepreneurs to build businesses that can make a positive impact on the economy. These up-and-coming black entrepreneurs are showing how it can be done.
Early-stage South African entrepreneurial activity is at an all-time high of 11%, according to Global Entrepreneurship Monitor, and entrepreneurial intentions have also increased to 11.7%. With both activity and intentions growing significantly year-on-year, there are more businesses opening up around South Africa than ever before.
The increase in entrepreneurship has seen the rise of more black entrepreneurs across numerous sectors. From beauty brands to legal services and even tech start-ups, these are 50 top black entrepreneurs to watch:
- Joe Phalwane
- Nandi Dlepu
- Sonto Pooe
- Michel M. Katuta and Thabo Mphate
- Naledi Sibisi
- Reabetswe Ngwane
- Neo Lekgabo
- Vusani Ravele
- Lulo Rubushe
- Samke Mhlongo
- Sizwe Nzima
- Nicolas Bereng
- Lebo Mphela
- Monalisa Molefe
- Siya Kolisi
- Leah Molatseli
- Nhlanhla Dlamini
- Fhumulani Nemukula
- Itumeleng Mpatlanyana
- Nozipho Dube
- Sarinah Matema-Morgans
- Nneile Nkholise
- Mahadi Granier
- Shalton Mothwa
- Theo Mothoa-Frendo
- Bakani Ngulani
- Ndabenhle Junior Ngulube
- Sandra Mwiihangele
- Constance Mapule Bhebhe
- Ignatious Nkwinika, Mbulelo Mpofana, Shane Curran
- Karidas Tshintsholo
- Mutoda Mahamba and Gavin Waldeck
- Ntuthuko Shezi
- Botlhale Tshetlo
- Dineo Lioma, Loretta Magagula, Danisa Nkuna and Lindiwe Nkosi
- Neo Ratau
- Mpodumo Doubada
- Obakeng Moepya
- Ouma Tema
- Lucky Kgwadi
- Nyakallo Mokoena
- Sibongile Sambo
- Mogau Seshoene
- Sibongile Booi
- Khanya Mzongwana
- Nkazi Sokhulu and Tlalane Ntuli
- Nothando Moleketi
- Nthabiseng Ramaboa
- Lilian Muhammed
- Sunshine Shibambo
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