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
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.
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:
- Livestock Wealth
- The Lazy Makoti
- Mimi Women
- AfriTorch Digital
- Akili Labs
- Native Décor
- Quality Solutions
- EM Guidance
- Kahvé Road
- HSE Matters
- VA Virtual Assistant
- Famram Solutions and Famram Foundation
- BioTech Africa
- Brand LAIKI
- Plus Fab
- Lenoma Legal
- Benji + Moon
- Brett Naicker Wines
- Legal Legends
- The Power Woman Project
- Aviro Health
- AnaStellar Brands
- Data Innovator
- Oolala Collection Club
- Empty Trips
- Vula Mobile
- The Katy Valentine Collection
- Pimp my Book
- ART Technologies and ART Call Management
- The Sun Exchange
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.
- Player: Adam Fine
- Company: Fives Futbol
- Est: 2011
- Visit: www.fivesfutbol.co.za
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.
Pivoting at the right time is key to growth
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.”
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.”
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.
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:
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