Offthe cliff, no skid marks – that was the fate of Iain Buchan’s first threebusiness ventures. But in 1994, all that changed when he launched The UnlimitedGroup, a high-volume distributor of over 30 annuity-based products andfinancial services that was voted one of South Africa’s Top 300 companies in2008.“1994was a watershed year,” Buchan says. “Having had three businesses thatcollapsed, I had to ask some serious questions. Somehow I was building goodbusinesses and then sabotaging them indirectly.”
Learning frompast mistakes
Hismistakes taught Buchan some hard lessons. Today, even with the huge growth ofthe business, he runs a cash forecast in excruciating detail. He also claims toknow what tax the company will pay to within 5% in February 2010. Added tothat, the business does not owe money to anybody; instead, it uses cash to negotiatebetter settlements. Buchanbelieves in getting the sales first and worrying about offices, cars andadvertising only once those are in the bag. Experience has shown him howoverheads can cripple a new business that is trying to sell.Buchanhas learnt about winning and losing, a lesson that forms the basis of hisbusiness model. “I went on a course in the same year that Unlimited waslaunched,” he recalls. “We played a game in which the only brief was to win. Mymindset had always been a win/lose one – for me to win, I had to beat myopponent. In this game, however, you could only win if the opposition won too.This resulted in a massive mind shift for me. I realised that a business has tofocus on doing the right things instead of just chasing the money. Sure,you need to manage cash flow and forecast accurately, but if you focus only onmaking millions today, it will not be sustainable in the long-term.” Asa result, the business focuses on providing customers with real cash benefitsand has built a loyal team through a generous profit share scheme.
Toget The Unlimited Group off the ground, Buchan took what he had learnt fromrunning an outbound telesales business for some time and began a door-to-dooroperation. “I was good at selling, but I saw that money could be made fromannuity-based products. You sell once, and if the service is good, the customeris yours, the debit order runs and the money comes in.”TheUnlimited Group has taken an old-fashioned approach to selling, tweaked it abit and clearly made it work. In the old days, a salesperson would knock onyour door and spend three hours trying to convince you to buy. Buchan’s teamtake no more than 30 seconds of the customer’s time once they’ve opened theirdoor. On offer is a range of products at reduced prices, ranging from holidaysto funeral policies to cash-back programmes, all targeted at specific LSMgroups.Theproducts sell for R100 or less and offer great value for customers. Ifyou’re wondering how Unlimited’s salespeople make it past suburban crimebarriers, Buchan says it’s simple. “All our people wear big placards on theirchests, including their name, a colour photo, their ID number, and the companycontact details. Customers are prepared to talk to them because they are nothiding anything.”
Thesingle biggest challenge facing the business in the early days was cash flow.Unlimited broke even after six months; to finance the shortfall, Buchan had anight job seven days a week. Thecompany has developed significant buying power over the years, thanks to itsbig customer base. But in the beginning it was tough, says Buchan. “Who’s going to give you a discount when youhave only a few customers? We were honest about that; we showed our partnersour business plan and asked them to give us a small discount on their products.Over time, as the number of customers grew, we were able to negotiate betterand better deals.”ForUnlimited’s partners, the benefits are great as the company actively drivescustomers to them. It’s far more profitable for an airline that’s flying a jetfrom Johannesburg to Cape Town, for example, to fill it up withpassengers paying half price than to have empty seats. The same applies tohotel beds. Lookingahead, Buchan and his two sons Zach and Barney are seeking to expand thebusiness into Africa and other regions of the world, and have been testing themarket in Indiaextensively. “Wekeep the entrepreneurial spirit of the company alive by always asking ‘why’ and‘can it be done better’,” he concludes. Contact:www.theunlimited-group.com +27 31 716 9602
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