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Plus 94 Research: Sifiso Falala

Drawing on industry experience to become a class leader.

Juliet Pitman

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Sifiso-Falala

The business

“Plus 94 is a market research company that provides clients with business insight and market information to help reduce uncertainty during decision-making,” says founder Sifiso Falala. With offices in Johannesburg, Cape Town and Durban, the business has grown rapidly since Falala started it with partner, Tirhani Mabunda, 14 years ago.

It employs 65 full-time and 250 part-time employees and services a range of clients including parastatals, government departments and businesses operating in the private sector.

Going it alone

Since the outset, Falala’s vision was to build a large, reputable and respected market research company that could compete with the many big-name international research organisations that have a strong presence in the local market.

“At the time everything seemed to come to Africa from Europe – it was a north-to-south flow of information and expertise. I felt there was a gap for an African-orientated business to offer insights and value,” he says.

And while Plus 94 conducts research across all demographic groups, Falala knew that the African consumer market was an untapped and largely misunderstood market. “Our vision was a multicultural one. I wanted to conduct research that covered all aspects of the South African market. When the business was launched in 1998, very few companies were researching the South African market in its full scope,” he explains.

Falala had ten years’ industry experience behind him, having worked for one of the large multi-national research companies. “My work experience included global exposure and I think this was important in helping me to start on my own.

I had a big-picture vision of the global industry and its key drivers, and this gave me the insights I needed to start a business that had a unique differentiator,” he relates.

Overcoming early challenges

The market Falala entered with his new business was dominated by white-owned, established research companies.

“There was still the perception in some quarters that black minds were not capable of scientific investigation, and we needed to work hard to convince potential clients that ours was a legitimate business led by highly skilled and experienced researchers. The thing that attracted me to research in the first place was the fact that it was the ‘scientific’ side of business, so I focused on that.  I sold quality,” he says.

Falala worked the contacts he’d built up in his ten years working in the industry and kept knocking on doors until one opened. “Having a well-established personal reputation was critically important in helping me land my first clients and overcome the usual challenges faced with starting out on your own,” he adds.

Priced right

Knowing how to price himself was less of a challenge. Falala explains that pricing structures are very transparent across the industry and that the work of part-time field workers and researchers is a known and easily quantifiable input cost.

Again, he drew on his industry knowledge and experience to price his work. “We tried to operate within the industry pricing standards, not pricing ourselves above or below the industry norm,” he says.

Many new entrants price themselves below the market norm in order to attract work, but Falala believes this is a mistake. “We established the business as a premium, quality company that could compete both technically and operationally with the best.

In order to deliver the best to clients, we needed to use the best interviewers, the best analysts and the best statisticians. This is why we didn’t underprice ourselves. It had a lot to do with having a clear vision of what we wanted to be and what we wanted to achieve,” he adds.

Setting it apart

If the business wasn’t competing on price, it needed something else to set it apart in an extremely competitive industry.

“All the major international players are represented in South Africa so our strongest competitors were multi-national companies. We needed to provide something that they couldn’t, and our local knowledge was to prove critical in that respect,” says Falala.

He continues: “One of the weak points about large multi-nationals is that their international products don’t always fit the needs of the local market exactly. For example, the wealthy in South Africa can’t be assumed to be the same as the wealthy of Europe. We could custom-fit solutions so that they were most applicable to the local market.”

He adds that employing the best people was another important differentiator. “Sometimes large multinationals don’t employ the best of the best in their smaller branches. We employed only the top minds and talent we could find,” he adds.

Falala’s vision was to build a large company but he started off small. And he never considered himself a consultant. “I always thought and spoke about the business as a business. I knew that it had to extend beyond myself and my partner if it was to become the large entity that we dreamed of,” he says.

learning the hard way

Falala and Mabunda learnt two important lessons early on. The first related to tax.

“We were so cash-strapped initially that we couldn’t make tax payments and this got us into trouble with SARS. Fortunately we were able to speak to them and work out a payment plan, but it taught us how important it is to understand how the tax system works and do whatever it takes to be compliant.

If you’re not paying attention you can quickly end up with a tax liability that earns interest at a greater rate than your monthly profit. Tax compliance is also critical to getting new business. We missed a couple of early tenders because we didn’t have a tax clearance certificate,” he says.

They also learnt the importance of personal investment in the business. “Things really turned when we made a conscious decision that the business’s growth would be determined by what we put in, and not by how much external investment we could get,” he explains. It’s an important lesson to other entrepreneurs who see lack of investment as the biggest hurdle to success.

Lessons you can learn

  • Don’t rely on the banks to get you started. They only have retrospective mechanisms for deciding whether to invest in you so they can only help once you’ve proved yourself, which is usually when you no longer need the money!
  • Know what your competitive advantage is and sell it.
  • Understand what the word ‘merit’ means. Be willing to work hard and ride on the quality of what you deliver. You won’t get handouts.
  • Be unrelenting.
  • Be able to regenerate yourself every morning. Don’t give up.
  • Use your failure as a stepping stone. If you fail, try harder.
  • Think about what you can bring to the table to deliver the product in a way that is faster, cheaper or superior.
  • The difference between being a self-employed consultant versus a business creator is perspective. If you know that things are bigger than you, you’ll want to share your vision with other people and take them along with you. I wanted to achieve something that no one on his own could have achieved.
  • Invest in succession planning. From the day I started operating the business, I was looking for my replacement. A business is something that you can never own. For it to be successful it must be able to continue without you. It’s something that is owned collectively.

Vital stats

Player: Sifiso Falala

Business: Plus 94 Research

Launched: 1998

Contact: +27 (0)11 327 2020

www.plus94.co.za

Juliet Pitman is a features writer at Entrepreneur Magazine.

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