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How The Rethaka Founders Funded Their Business By Winning Competitions

Two extraordinary young South African entrepreneurs proved that not having cash is no excuse to not following your dream.

Monique Verduyn

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Rethaka

Vital Stats

Having grown up in the dusty mining town of Rustenburg, childhood friends-turned-business-partners, Thato Kgatlhanye and Rea Ngwane, knew all too well what it’s like for kids to do their homework when the sun goes down and there is no electricity supply.

What also troubled them was the seemingly endless number of plastics bags and bottles polluting the environment around the town and nearby settlements.

The two – aged just 21 and 22 respectively – put their heads together and came up with an innovation that is now travelling the world.

Rethaka, their social start-up takes advantage of all that plastic waste by upcycling it into 100% recycled plastic backpacks – branded Repurpose – for disadvantaged schoolkids. But there’s more.

We-recommend-tickWe recommend: Why Do Businesses Fail Even When Funded

The bag also doubles as a light, thanks to a nifty solar panel stitched into the flap so that children can do their homework after dark. And to make sure that the kids are more visible to traffic in the early morning when they are making the often long trek to school, the bag is also covered in reflective strips.

To get their idea off the ground initially, they had to set up a workshop with the right equipment and machines that could stitch plastic. When they started in 2013, there wasn’t even infrastructure for plastic recycling in the North West.

“We had no manufacturing experience and no cash,” says Kgatlhanye. “All we had was an idea that we started to think about while we were studying, and the determination to put bags into the hands of kids who desperately needed them.”

Refusing to let their lack of capital deter them, Kgatlhanye and Ngwane got creative, stepped into the trenches, and differentiated themselves. The result: They bootstrapped their way to business success.

Thinking outside the bag

repurposeschoolbagsWith no capital, they had to get creative. “We had the words to describe our product, so we entered start-up competitions and applied for grants, putting all our energy into writing the best proposals you can imagine.”

Their plan worked. They submitted an application to the SAB Foundation Social Innovation Awards, came third, and went home with R300 000.

“From nothing, we suddenly had a meaningful amount to work with,” says Kgatlhanye. “By telling the right story to the right people, we got them to trust us enough to give us capital that we did not have to pay back. It’s a different approach, but it certainly worked for us.”

Sweat equity

Driven by the commitment to making their dream happen, they worked tirelessly. They developed their own system and infrastructure for collecting plastic from landfills and schools, and the raw material started coming in.

Called Purpose Textile Banks, these plastic bag collection sites can be set up at schools, churches, complexes, estates and offices.

At the same time, their research was ongoing. A pilot project was launched in January 2014. They set up a small workshop where the plastic could be processed into a textile, after which workers use industrial sewing machines to turn the material into bags.

“It was a huge risk because we had to employ people to manufacture the bags,” says Kgatlhanye. “We basically took a gamble on everything.”

Business differentiation

The level of manufacturing innovation underlying their business, as well as its potential social impact, were two important elements that differentiated Rethaka from other start-ups. With the research behind them and a product in development, they had the IP and the potential to generate revenue.

Through a combination of enthusiasm and confidence, the two founders did not find it too difficult to bring what they call ‘Giving Partners’ on board – companies and organisations that purchase or give donations towards Repurpose schoolbags on behalf of learners.

We-recommend-tickWe recommend: Government Funding and Grants for Small Businesses

“Finding corporates and individuals who want to contribute to a cause focused on education and children is what has enabled us to turn our original idea into a sustainable social enterprise that benefits kids, employs people from the community and also turns a profit.”

No easy shortcut to profit

“Everyone thinks you need money to start a business, which is true, but we proved that you can do things differently provided you have enough drive and you’re prepared to work harder than you would ever have thought possible,” says Kgatlhanye.

Their plans for the future? They are adamant about growing the business, and Kgatlhanye says there are no plans to give away any equity for the foreseeable future.

Right now, brand management is top of mind for them and they are introducing new product lines, as well as a luxury brand that will enable them to finance even more of the socially responsible side of the business.

As part of the proceeds of the sales, they will be able to finance and subsidise even more bags for schools around the country.

“We plan to build a green empire and develop production plants in other provinces where the need is great, like Limpopo and the Eastern Cape. We are also starting to export products to Australia, and several European countries. There’s a lot of overseas interest. Helping children, employing people, cleaning up the environment – that’s what we are selling. We’re living in a time when more and more people are drawn to the idea of contributing to a better world for all of us to live in.”

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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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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adam-fine

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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