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Lere’s Shoe-Shine Experience: Lere Mgayiya

How to build a successful business with minimal start-up capital

Juliet Pitman

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Lere Mgayiya

Lere Mgayiya is no stranger to the word “no”. The 32-year-old founder and owner of Lere’s Shoe-Shine Experience, a familiar feature of both Cape Town and Johannesburg International Airports, has stood outside more than his fair share of closed doors. Desperate to put his energy and ideas into building a profitable business, he approached banks for a loan. But each attempt met with the same answer: “You’re young, from the township and without any assets. Don’t call us, we’ll call you.”

But Mgayiya is nothing if not resourceful, something he proved when he won the pilot episode of the Sanlam Money Game, turning an R18 000 profit from R30 000 in just three days. With his winnings, he bought shares and went to work in a promising BEE company, but it soon became clear that he would only reap rewards three years down the line. After trying, yet again unsuccessfully, to get finance for a mobile public cellphone franchise, Mgayiya was back to square one. At this point, most ordinary people would have thrown in the towel and looked for a regular job. But Mgayiya was proving himself to be anything but ordinary. He may have been out of luck, but he wasn’t yet out of ideas. One day while sitting at Cape Town’s Greenmarket Square, he noticed a shoe-shiner plying his trade and a business idea was sparked – it’s a low-cash start-up with few cash flow issues. But there was a lot of downtime where he was, so I thought ‘where would it be possible to set up a shoe-shine business that didn’t experience long periods of downtime’? The airport!”

Mgayiya contacted Umsobomvu Youth Fund who helped him draft a business plan for Cape Town International Airport. “They loved the idea but I had to wait many months for meetings and a tender committee presentation. In that time, I wasn’t making money and had to sell my car to prevent my house from being auctioned.” Eventually, the business got the go-ahead but Mgayiya lacked the R5 000 capital required to buy two shoe-shine chairs, one each for the domestic and international terminals. Yet again, he approached the bank, this time with his ACSA contract in hand, but was once again turned down. Undeterred, he sold his television and stereo for R2 500 and begged the other R2 500 from his mother. He hired a second shoe-shiner and they opened for business, charging travellers R15 for a shoe-shine. “We were initially called Airport Shoeshine but I quickly realised that customers, most of whom were business people, were looking for a shoe-shine experience,” he relates. So, without any formal business education, Mgayiya set about voraciously reading every financial and business-related publication he could get his hands on. “I taught myself about the Repo rate, financial markets, inflation, CPIX and followed the exchange rates. It meant I was able to interact with my customers, and converse with them about things they were interested in.” The crash-course in finance paid off. “Customers started coming back to enjoy the interaction, each time they travelled to or from the airport. So Lere’s Shoe Shine Experience was born,” he adds. In its first month, the business covered its capital outlay and made a small profit.

One of his customers was so impressed that he encouraged Mgayiya to enter the SAB Kick-Start Competition, even going so far as to bring him an application form. Mgayiya went on to win R50 000 in the competition, which enabled him to expand his operation. He set his sights on Johannesburg International Airport, a deal he recently clinched. Constantly looking for ways to improve his operation, add more value to the shoe-shine experience and enhance the business’s money-making capacity, he invested in coin-operated massage chairs that clients can sit in while having their shoes shined. So successful has the business been that Mgayiya now employs 18 people. Things are looking good for a deal with Durban Airport and he has big plans for expansion into other public and corporate areas. He is also aware of the opportunities that the 2010 Soccer World Cup will bring and, although he won’t divulge any secrets, has made sure that he is striking while the iron is hot. So next time you’re at an airport and someone asks to shine your shoes, take it as an opportunity to sit down for a short while with a real live success story.

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Nic Haralambous launched 8 failing businesses. He used the lessons learnt from that failure to ensure the success of his new business Nic Harry.

CEOwise

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Vuyo Tofile offers his advice on how to know if you’re ready to scale and how to get it right the first time.

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Vuyo Tofile, CEO of EntBanc Group (Pty) Ltd, which is a privately held enterprise and financial technology group. They empower small businesses with the right tools including products such as mySMEtools, which is used by over 46 000 small businesses. Learn about partnering for success, develop tools and resources that your customer base needs, and how can you scale?

Related: Do You Have That 1 In 100 Business That Can Scale And Land An Investor?

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Eben Uys Shares His Concept Behind Mad Giant Brewery And How You Can Make Your Business Stand Out In A Crowd

“You just need to start” says Eben Uys, don’t make up excuses why you aren’t ready. Just start.

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Eben Uys, Co-founder and CEO of Mad Giant, a Brewery in the heart of Johannesburg, South Africa. Eben brings new life to craft beer and has made his brewery and restaurant Urbanologi, a destination hub. His advice: “You can do things that give you short-term gains, but it might not benefit you in the long term. Try a lot of things over a long period of time and build a reputation and a network.”

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

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