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Set In Stone – Keystone Productions

Four local entrepreneurs are patiently building their empire, one brick at a time.

Nadine Todd

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Jon Le Roux is quick to point out that if he knew in 2003 what he knows today, he wouldn’t have joined Keystone Productions so quickly when founding partner Chris Bolton suggested they launch a business.

The business has enjoyed steady growth since launch, owns four properties, has paid off its high-tech equipment and encompasses a number of sister companies that feed into its industry, so it’s a good thing ignorance is bliss.

“We had no idea how tough it would be launching a business. We took so many risks to get where we are today without realising just how risky they were,” he says. It’s taken ten years, but those risks have paid off and today Keystone is widely regarded as an industry leader.

Growth strategies

1. The team

Le Roux co-founded Keystone Productions with two partners, Chris Bolton and Warren Liss. At the time, he was working in the finance industry and DJing on weekends and in the evenings. Liss was involved in stage design, and Bolton specialised in theatrical lighting. “Chris approached me about starting a business. Essentially we would be three freelancers. The whole business was based on our various skills sets. Together, we could offer a wide range of services.”

With his background in finance le Roux did the books, all three agreed to always carry their own weight, and the business would be equitably split from the beginning.

It’s a system that has remained in place since launch. Le Roux’s brother Justin later joined the business, and the four partners hold equitable shares. “I run the company on a day to day basis. My partners do what they’re good at, which is enhancing their skills and offering their experience and knowledge to clients,” says le Roux.

2. Investing in equipment

Three years into the business, the decision was made to invest in, rather than hire, equipment.

“It made sense to open a second company, purchase equipment and then rent it to ourselves,” explains le Roux.

Shares were sold in this second business to help raise capital. Of the R3 million needed, R1,5 million was invested by Keystone, and the remaining capital came from an equity investor.

“We opened a second company so that we could also rent the gear to our competitors,” says le Roux. It took five years for the second business to see a return on investment, but it’s now operating at a profit.

3. Investing in property

The team made a similar decision with property. “When we had grown enough to need office space, we decided to buy rather than rent,” says le Roux. For the first eight years this made the business almost impossible to run in terms of cash flow.

“We opened a company to own the properties, and each of our other companies pays rent to the property company.” The property company has tenants across four properties, and today three of the bonds are paid off.

“We own three commercial properties outright, and only one bond has money still owing on it. These assets can be used for collateral if we need growth funds and it means the entire portfolio is stable, but things were tight getting here. All our profits went into paying rent and salaries in the other businesses, and to paying bonds in the property business. We needed to be incredibly patient and survive the tight times to be where we are today.”

4. Organic growth

The partners have opened a few different companies and each supports the industry they work within. This means they own the entire supply chain around organising an event.

“Over the years we’ve extended our offering from supplying the sound and lighting at events to staging the entire event. We’ve invested in photographic, sound and video production studios; we offer 3D renderings of events free of charge so our clients can see what we can do for them; and we own our equipment. We can also rent out our studios and the equipment, so we have multiple revenue channels. It took a lot of risk getting here, but we’ve got an excellent stable of products and services today as a result.”

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Mitigating risk

While they were building Keystone into what it is today, the partners always had a clear goal in mind: They were only going to target corporate clients, who they saw as a less risky clientele than public events where suppliers are often not paid if the crowds don’t come, and their differentiator would be based on doing the job better than anyone else, with a wider array of services on offer.

“We can create the concept for the event, do the stage design, theatrical lighting and all post-production under one roof. No-one else currently offers the full array of services that we can. We’re highly specialised, largely because my partners don’t concentrate on running the business, but on staying at the top of their game and ahead of industry trends. The investments we’ve made over the years have put us in a leading industry position.”

For the founders of Keystone, patience has been the name of the game. “When we invested in the studio for example, we knew it would run at a loss for the first four years. But after that it will be an established studio with a mature client base. We’re in this for the long-haul, and each of our decisions reflects that.”

Vital stats

  • Players: Warren Liss, Jon le Roux, Justin le Roux, Chris Bolton
  • Company: Keystone Productions
  • Est: 2003
  • Connect: www.keystoneproductions.co.za; +27 (0)11 482 9360

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

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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.

Nicole Crampton

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“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:

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Colin Timmis Says ‘Position Yourself For Success By Starting With The Numbers’

People pay first who they feel pressure from, so people will pay you when they feel pressure from you.

CEOwise

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Entrepreneur Colin Timmis founded South Africa’s first cloud accounting practice in 2011, Real Time Accounting. Then, a few years after being appointed as South Africa’s first Xero partner Colin became Xero Country Manager South Africa. Xero is the emerging global leader of online accounting software that connects small businesses to their advisors and other services.

Related: Pat Pillai On How He’s Helped Over 5000 Entrepreneurs Using 3 Key Steps

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Two 20 Year Olds Reshape Entrepreneur Landscape With New Social Investment Platform

The Merge vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.

Merge Connect

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Vital Stats

It’s no secret that finding the right investor for your venture is a challenge that most entrepreneurs face. The current process of finding investment is one that is outdated, and limits entrepreneurs due to a lack of time, and network that is needed to find the right investor. But, this doesn’t have to be the case in today’s digital society, says Zander Matthee and Brandon Bate, co-founders of Merge.

“By making the Internet the middleman, we are able to connect with each other much simpler and faster than before” was Zander’s response. “We have taken advantage of this, and have created a digital meeting place for entrepreneurs and investors” added Brandon.

Merge is a social platform that connects entrepreneurs and investors. It aims to simplify, refine and accelerate the process of finding investment for entrepreneurs, and the process of finding investment opportunities for investors. From idea to developed, the platform allows entrepreneurs to present a brief outline of their venture to a network of all investor types. While doing this, entrepreneurs are able to browse through, and connect with investor profiles that suit their requirements.

Related: 8 Codes Of Success That Helped Priven Reddy of Kagiso Interactive Media Achieve A Networth Of Over R4 Billion

From Private Investors to Venture Capital, and everything in between, Merge allows all investor types to join. Investors have the opportunity to personalise their feed to suit their investment preferences, and will be able to connect with innovative businesses – that are looking for investment – at their fingertips. Only once there is a mutual interest in each other, are users able to enter a secure private chat where they can discuss further and share documents under the protection of a digital NDA.

The two boys became good friends during their time in high school at St Stithians Boys College. However, it was only in their last year, 2016, that they decided to pursue their dreams and create the platform. They didn’t know how to code, so rather ironically, they needed some form of investment to get the platform off the ground.

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“We knew we had a mountain to climb, but we believed in our vision and that we were really trying to make a difference, and if we could get others to see that, they would be onboard.” said Zander.

Related: Lessons From The Rich And Famous: Manage Your Money Like Oprah To Avoid Going Into Debt Like Nicholas Cage

Chris Peters is one of these individuals that bought into their vision, and became Merge’s first investor. As a successful entrepreneur and part time investor , Chris saw how much value the platform could bring to all entrepreneurs and investors alike. His marketing and strategic background gave him insight into how Merge could play a vital role in a lucrative space, Brand involvement.

“Entrepreneurship and SME development are two key factors that drive economic growth in developing countries like South Africa. That is why brands are currently getting involved, and looking to support entrepreneurs through various means. We have built a platform that allows these brands to successfully market, and execute on the programmes they have created to assist entrepreneurs.” said Chris

Merge was created to assist all entrepreneurs and investors in finding exactly what they are looking for, regardless of age, race, sex, financial position or social status. That is why anybody can sign-up as an entrepreneur. As long as you are determined and willing to work for your dreams. For too long has the investor space been seen as an “elite club for the select few”, and Merge is here to change that. Whether you’ve gotten your bonus at the end of the year and looking for new investment opportunities, or are an active investor, you can sign-up. Whether you’re currently working, or a retired industry leader, you can join as a mentor.

Their vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.

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