- Player: Alicen Naicker
- Companies: Quality Solutions and Rent-A-Tainment
- Launched: 2015 and 2017
- Visit: qualitysolution.co.za
You can bootstrap a business with limited funds. You just need to get started. Start small, and trade — money in, money out. That’s the secret to launching a bootstrapped business.
Why entrepreneurship: Working in the chemical engineering industry, Alicen travelled extensively in her position. When her daughter fell ill and she was unable to get back to Joburg in time, she realised a change was needed. Her employer was unwilling to change her travel schedule, and so Alicen resigned. Family had to come first. Starting a business wasn’t planned though. After paying her bills she had R2 000 left — and had to make it work.
It doesn’t sound sexy. It’s certainly not a high-tech business. But Alicen Naicker has tapped into an underserviced niche with a huge clientele. Her clients include churches, funeral parlours, schools, crèches, corporate clients and SMEs. She has 1 200 repeat customers on her books, including the Free State Department of Education. She services clients in Swaziland, Namibia and Zimbabwe. And it all started with 50 chairs and a steel table — which was all she could afford with her R2 000.
These are the eight lessons Alicen has learnt from bootstrapping her business.
1. Start with a need
“I had limited funds, and I needed to put what I had to work in such a way that it could generate continuous income. That meant I didn’t want to sell something — I wanted to rent it out. What does everyone need, and yet never have enough of? The answer seemed obvious: Chairs. Functions are happening all the time, and people have to hire what they need for them.”
Alicen had a colleague who had a friend in the chair manufacturing business. She reached out to him, and purchased 50 chairs and a steel table.
“While the stock was en route I posted an advert on gumtree and OLX. Before the chairs had even arrived I had my first customer — a man whose wife was having a baby shower, and they needed chairs.”
Alicen rented the equipment out for R800, and by Sunday, as it was returned it was hired out again, this time for a Sunday evening function. Just like that, her investment was working for her, making money.
2. Reinvest your profits
When you’re bootstrapping you’re starting off a small base that you need to grow. The only way to do this is to consistently reinvest your profits into the business. Alicen worked from home, ensuring she had no overheads. All she needed was a laptop and a cell phone.
“I purchased additional stock as soon as I made enough to do so, and put it to work,” she explains.
3. Pay attention to opportunities and pivot where necessary
Rentals were the best way for Alicen to get into business, but she soon realised that’s not where the market was. “A church from Springs contacted me. They wanted to know if they could purchase 50 chairs for R2 600.
“They couldn’t afford to rent each weekend. I had good contacts, and could supply them quality chairs at a very small mark-up. I realised this was a business opportunity, and I’d built up enough cash flow to get started — I could purchase stock and sell it to specific sectors that needed a constant supply of chairs.”
And just like that, Alicen became a stockist and seller of chairs, tables, chair covers, table covers and other related items — for adults and children.
“My stock turnover time is two days. I pay careful attention to the market so that I purchase the right stock — I don’t want to be left sitting with stock that doesn’t sell, as this kills cash flow.”
4. Keep your overheads low
Alicen works from home and doesn’t have a warehouse. She ensures a quick turnaround of stock to make this work, which means she needs to pay careful attention to what sells and what doesn’t. She has a laptop and a cellphone, and she invites clients into her home.
“It builds trust. I’m happy to do business from home; it’s personal. My clients travel from all over South Africa, and the nature of their businesses is also personal, whether it’s a church or an entrepreneur starting their own business. I’m a start-up — fancy offices and warehouses are completely unnecessary — my focus needs to be on building the business.”
5. Find alternate streams of revenue
The market for chairs and tables is large, but Alicen had been in the rentals game, and she knew there was a need there as well — and that she could assist business owners with a ‘business in a box’ concept.
“I offer combos: Chairs, tables, jumping castles and so on. You can purchase the entire kit from me, and all you need to do is market and start renting out. I’ve created an additional client base in this way — and as their businesses grow, my business grows. It’s also a great way to supplement income. For example, I work with corporate employees who rent out chairs and tables on the side.”
6. Understand your market
“I’m not a manufacturer, I’m essentially a middle man competing with well-known retail brands, and so I’ve needed to create a competitive niche for myself. First, my mark-ups are extremely low. This only works if I have high volumes though, so I’ve needed to concentrate on building those volumes up.
“You create loyal and repeat customers by building trust, and that’s done by really understanding your products, your market and what your competitors are offering. I know exactly what’s available, and what I’m offering in comparison.
“I can give good advice, because I understand my products, the different chair weightings and qualities, and what they can carry. Schools, churches and funerals — these are all places where you do not want chairs to break. Quality is important. I also always deliver what I say I will. My business is primarily built on repeat business and referrals, so this is important.”
7. Ask your customers what else they need
Your biggest opportunities lie with your existing customers. Alicen recognised that the party rental industry is a big customer base for her, but they don’t always want to invest in high-end products — or they aren’t able to.
“I’ve launched a second business, Rent-A-Tainment, based on this concept. I’ve invested in four Zoballs, which I rent out to my customers who supply party equipment. Zoballs cost R25 000 each to purchase, and they’re expensive to maintain.
“This is an additional revenue stream for me, and I have a pre-existing client base who want them. Before I even launched, my calendar was full. I’m also not one rental company with its clients — I service an industry of rental companies, so the costs will be recouped quickly. The challenge was purchasing them in the first place.
“I was head hunted a number of times in 2016. In November I decided to take an offer that was local, with no travelling. I’m using that salary to grow my start-up and invest in high-end equipment, instead of using my profits and hurting my cash flow.”
8. Don’t quit
“My family laughed at me when I said I was selling chairs, but I knew that it was something everyone needed, and I was right. This doesn’t mean it’s always been easy. There have been times when I haven’t had a cent in my hand, and others when I have more money than I know what to do with.
“Start-ups are all about highs and lows. The important thing is to not give up, keep pushing on, and reinvest your cash into the business during flush times. It will pay off.”
Collaborating To Create #balanceforbetter
Communicating this business case, setting goals and reporting on progress are key to driving change. The door to diversity will not open itself.
Each year on 8 March, International Women’s Day, I get invited to attend events that celebrate and discuss gender diversity in the workplace. They’re often rich with intelligent discussions about women and work, a topic I am immensely passionate about.
But all too often, I sit up on stage, look out to the crowd and I think, ‘where on earth are all the men?’ There are many supportive men on gender diversity (I know quite a few) but there is still work to be done as I often find myself singing to a choir of women who already know that gender diversity is a business priority.
It’s irrefutable that having a gender balance leads to better business outcomes, greater profitability and value creation. Better balance between women and men means broader insight, more empathy, and fresh ideas.
Gender diversity is not only a women’s issue. It’s a human issue. And the majority of our business leaders today, in particular in technology, are men. The only way we are truly going to make headway is to have the men standing with us to create a business environment where women can thrive.
I believe collaboration is vital to have as part of any gender diversity discussion and would even go so far as to say it’s negligent if this isn’t on a male or female business leaders’ agenda.
However, I think it’s easy to point fingers and we all need to look at how we can create more inclusive environments. It’s critical we have discussions in an open forum, and that organisers of events and support groups create positive opportunities for discussion that encourage men and women to attend and work together.
It worries me that the 2018 McKinsey and Company report on Women in the Workplace shows that progress hasn’t just slowed, it’s stalled. All the while, companies are reporting that they are highly committed to gender diversity. It’s a frustrating paradox. We didn’t open the door to diversity, only to turn around and shut it behind us.
Recently, I was introduced to the term moral-licensing through Canadian author Malcolm Gladwell’s podcast Revisionist History. I can’t help but think that the phenomenon might be at play here. It describes the subconscious decisions we make to engage in prejudice behaviour, because in the past we did something virtuous.
Moral-licensing became a popular theory in 2009, describing those who voted in US President Barack Obama, and subsequently reverted to racist behaviours.
When I think about it in this context, I think about the companies who have hit a quota of females and assume the job is done. But token acts of egalitarianism do not mean you have an egalitarian workplace. It’s box-ticking and it’s bad for business.
I encourage every business leader to introduce a diversity plan and to really think about fostering an inclusive and respectful environment for diversity to thrive. Here’s where I think is a good place to start:
Women need to feel supported in the workplace, they need allies to feel confident enough that they can share their beliefs, their values and their views. Our leaders need to reengineer working environments to make them a safe, supportive place.
We need to be aware of our unconscious biases and flagging behaviour in the workplace that isn’t inclusive. It’s little things like calling grown women ‘girls’. They’re small but reinforcing behaviours and when added up, they have impact.
Support groups and events around International Women’s Day are great, but how can we make sure we have a diverse spread in the room and it’s an inclusive and encouraging environment for everyone.
I do believe the majority of businesses have the very best of intentions in this space, but leaders need to turn those intentions into actionable plans. So this International Women’s Day, I challenge you to speak out publicly about your business’s progress and goals for diversity. How is your organisation tracking and what is your vision and plan for the future? What you’re doing to ensure you’re not giving in to moral-licensing?
Communicating this business case, setting goals and reporting on progress are key to driving change. The door to diversity will not open itself.
Funding And Financial Assistance For SA Women Entrepreneurs
Female entrepreneurs are growing in numbers, but without access to appropriate funding many start-ups will find it difficult to grow their businesses, regardless of whether there’s a man or woman at the helm. Fortunately, access to funds for female entrepreneurs is improving thanks to government and private enterprises.
In fact, The Small Enterprise Development Agency (SEDA) noted that 72% of micro-enterprises and 40% of small enterprises are currently owned by women. Government and private enterprises have put programmes and funds in place aimed at empowering the women of South Africa.
Starting a business is always a challenging objective, what makes it more challenging is trying to find funding to get your innovative idea of the ground.
Content in this guide
- The Isivande Women’s Fund (IWF)
- Women Entrepreneurial Fund (WEF)
- Business Partners Women in Business Fund
- IDF Managers Funding
- Enablis Acceleration Fund
- The National Empowerment Fund (NEF)
- Absa Women Empowerment Fund
- The Special Projects and Programmes Unit (SPP)
- Women in Oil and Energy South Africa (WOESA)
Funds and Financial Assistance
Here are seven funds and financial assistance programmes as well as two resources for women entrepreneurs in South Africa.
Too Few South African Women Become Entrepreneurs, But This Can Change
Organisations built by business women and that speak loudly and assertively for business women will send an unambiguous message that women belong in the community of entrepreneurs.
Although South Africa’s constitutional democracy has been advocating for gender equality for the past 24 years, the level of entrepreneurship among South African men and women is still far less equal than the country’s economic peers such as Ghana and Uganda. This is an indication that a progressive constitution alone is not enough to ensure that women join the local community of entrepreneurs in equal numbers to men.
Illustrating this, are the latest figures from the 2017/2018 Global Entrepreneurship Monitor (GEM) which show that 13 out of every 100 South African men are involved in total early-stage entrepreneurial activity, compared to just 9 out of every 100 women.
This research shows that the inequality goes deeper than just the headline figure. A higher percentage of women who do start their own ventures do so out of necessity (34.3 percent for women vs. 18 percent for men), whereas South African men, on the other hand, are more likely to start a business in response to an opportunity (82 percent for men vs. 65.7 percent for women). As research indicates that opportunity-driven entrepreneurs are more likely to create wealth than necessity-driven entrepreneurs, this is definitely an area for improvement for our country.
The GEM study is an annual survey, and dishearteningly, a look at the GEM figures over a number of years shows no discernible trend towards closing the gap, while some of South Africa’s economic peers such as Brazil and Vietnam consistently show an equal number of men and women starting businesses.
Gender parity in entrepreneurship needs a consistent stretch of truly high economic growth, north of 6 percent, to shake lose any remaining cultural, psychological and economic chains that are keeping women back. Unlike its counterparts, South Africa’s economic growth over the past few decades has seldom breached 4 percent – hovering around 3 percent since 1994.
This might also explain the general low levels of entrepreneurship in the South African population, among both men and women, compared to its economic peers – 11 percent of the South African population is involved in entrepreneurial activity. Wealth creating businesses start in response to opportunities, which multiply when economic growth is strong.
Short of a massive economic stimulus needed to propel South Africa’s economic growth upward, is there anything that can be done on an incremental level in order to establish entrepreneurial equality between men and women in South Africa?
I believe that there are many low-key ways in which to entice more women to become entrepreneurs. One place to start, is to focus on the income-generating side-lines that many South African women are engaged in. A scan of social media shows that South African women are not short of ideas nor initiative. From activities that are traditionally seen as female-oriented such as baking and sewing, to truly innovative social clubs and online initiatives seem to provide an outlet for many women’s entrepreneurial urges. Yet too few of them develop into proper full-time careers.
Programmes focused on women and their side-hustles might find fertile ground to grow them into fully fledged businesses.
Another factor that might entice more women to start businesses is more accessible finance. There is no easy solution, however, as research shows that men are more likely to start looking for finance early when they launch their ventures. Women, on the other hand, are more likely to use their own funds to start a business and thus delay seeking finance until their venture is potentially in trouble making it more difficult to secure finance.
The solution, if any, lies in education and training deep enough to effect a significant shift in mind-set. Given the poor state of the educational system, South Africa still has a way to go, but it could be argued that any incremental improvement in the education system would boost the country’s levels of entrepreneurship.
It remains to be seen if an increase in gender equality and representation among bankers and financiers may lead to improved access to finance for female entrepreneurs, but because it is a good thing in itself, gender parity in the finance industry is worth pursuing.
The celebration of female entrepreneurship in popular culture, social media and as part of cultural events remains important and probably cannot be overdone. Awareness of the possibility of success in the business world for females remains fundamental to any young woman’s decision to choose entrepreneurship.
Finally, a strengthening of the profile of women’s business associations in South Africa can become an important factor in increasing the number of female entrepreneurs. Organisations built by business women and that speak loudly and assertively for business women will send an unambiguous message that women belong in the community of entrepreneurs.