Leader.co.za - Management, Training and Career Advice for Business Leaders







03 NOVEMBER 2018
3 local entrepreneurs share their business challenges
by Nadine Todd

Three local entrepreneurs, Tara-Lee de Wit, SJ Koortzen and Carmen Peters unpack the lessons that have helped them get their businesses through the start-up hurdles new companies face, and build sustainable brands.


PRINCIPAL CLASS PLACEMENTS

Tara-Lee de Wit started working when she was 16. She was home schooled, and balanced studying with employment. At 14, she knew she wanted to be an entrepreneur one day, a goal she wasn’t shy to share with her father, a 40-year Telkom veteran. At 19 she took the plunge. She’d been working in recruitment and saw the placement fees her employers charged. Instead of continuing to make money for other people, she decided to shape her own destiny. She moved to the Western Cape and launched a boutique recruitment agency, Principal Class Placements.

The challenge

Start-up entrepreneurs often believe they have to bend over backwards to secure a client. In some cases, this is because companies will take advantage of start-ups, assuming they’re desperate for the business, and in others it’s simply because the entrepreneur doesn’t know their own value and won’t stand up for themselves. In both cases, the result is a skewed balance of power, to the detriment of the entrepreneur.

"I was extremely flexible with my first client," says Tara-Lee. "They wanted flexible terms that were not at all to my advantage, and I agreed to their terms to secure them. We agreed that they would pay the first 25% of the placement fee upfront, and the remaining 75% three months later. When it was time to pay, they refused. The placement had gone through, and there was nothing I could do. I found a lawyer willing to work on a pro rata basis, and she managed to get them to pay within five days, but that was a year after the placement."

Carmen and Bradley had a similar experience. "We had an arrangement with a small business that needed tech support and web development. We billed them at the end of every month, instead of in advance, which is our usual practice. Clients buy a pre-agreed amount of hours each month and pay upfront before the work commences. We thought it was worth it because it would be an ongoing relationship. It went well for a few months until they defaulted on paying our last invoice. We later found out that they had lost a really big client, and that had a knock-on effect to our cash flow. Now we always stick to our terms - the risks of not doing so are just too high."

For most entrepreneurs, access to market isn’t quite as clear cut. You need to know who your market is, what they need, and most importantly, how they will find you. Even though many entrepreneurs hate it, cold calling is often the only answer to securing clients. "I picked up the phone and started calling companies," says Tara-Lee de Wit. "The only way businesses were going to know who I was and what I offered was if I told them."

The solution

Launch discounts and flexible terms might secure early customers, but then what? It’s difficult to change terms or increase prices once you’ve already created an expectation in your customers’ minds. Don’t be unreasonable, but don’t undervalue yourself either. If you respect yourself, your business and your offering, your customers will as well.

Do this: Practice being brave. Bravery is a habit. It’s a muscle that can be developed. The more you stand up for yourself, the easier it will become, so start sticking to your guns. You might lose a few clients, but those aren’t the customers you wanted anyway.


VA VIRTUAL ASSISTANT

In 2014, after returning to work from maternity leave, Carmen Peters struggled to find meaning and purpose in her job. The division she was working in was sold to another company, and she found herself spending three hours a day in traffic, only to arrive at her office and sit around while management tried to figure out what everyone should be doing. She had enough, resigned, and decided to take the plunge into entrepreneurship, acquiring an online store, babarazzi.co.za, which she had big dreams of turning into the next Yuppiechef.

A few months later she launched VA Virtual Assistant after spotting a clear gap in the market. Her husband Bradley developed the website, and when the company he was working for closed down in 2016, he joined the business full time, and the two entrepreneurs combined their skills to offer their clients admin, tech, marketing and social media support.

The challenge

Many wanna-be entrepreneurs know they want to own their own businesses, but they don’t always know where to start. Is their idea good enough; is there a market for it; will people or companies part with their hard-earned cash to pay for it? These are just some of the questions start-ups should be asking themselves.

As an entrepreneur, you need to learn to sell. If this is outside of your comfort zone, you’re going to have to get over it. As Alan Knott-Craig loves to say: If you’re not ready to be a salesman, you’re not ready to be an entrepreneur. Finding your idea is the easy part - sales takes seriously hard work, discipline, and above all, perseverance. You might have to make 20 phone calls to get two connects, and you’ll secure one meeting for every ten connects. You won’t know your ratios until you’re making those calls and knocking on doors, so get started.

There are other ways to access your market. Word-of-mouth referrals are excellent once you have a few clients, and the Internet also offers a world of possibilities.

Carmen accessed her first client, a business woman based in Zambia, through eLance, a platform that sources freelancers. She did her research, found out which sites virtually linked skills with businesses, and registered on them.

Unable to afford to advertise, Carmen and Bradley also attended as many networking events as possible. "Virtual Assistants is a new but fast-growing industry in South Africa. We told people who we are and what we do and that helped us grow," she explains. "We needed to be out there educating other business owners about who we were, and what our industry was. That’s how you start building up traction."

The solution

Rapelang Rabana, entrepreneur, tech expert and chief digital officer at BCX has clear advice on how you find and follow great ideas. "Your ability to innovate and be creative is based on the sum of all of your experiences," she says. "Great ideas do not take shape in our minds, they are the result of external stimuli hitting a prepared mind. We don’t think up ideas - we notice them. We connect the dots in new and creative ways. And our ability to do so is based on how prepared we are to notice what’s happening around us, and to tap into that information."

When Carmen bought babarazzi.co.za, she applied to the Branson Centre of Entrepreneurship and was accepted into the programme. It was there that the idea for VA was born. "Meeting and speaking to fellow business owners I realised that we all had the same or similar struggles," she recalls. "We all needed extra hours or an extra set of hands, but couldn’t afford an additional employee - either because of the costs involved, or because there wasn’t enough work for a full-time position. I did loads of research and found that virtual assistants are popular internationally, but there wasn’t a big offering locally. I recognised the gap and VA was born."


KGALAGADI LODGE

Born and bred in the Kalahari, SJ Koortzen fell in love with the hospitality industry when he visited his grandparents’ lodge as a child. This love grew when his family opened Dreghorn Kalahari Game Ranch many years later. Having returned from a gap year in the UK, SJ recognised that building a lodge on the family farm would maximise the farm’s profits. After meeting and marrying his wife, Denise, SJ realised he wanted to build his own lodge.

It wasn’t easy. The site that is home to Kgalagadi Lodge is only five kilometres from the popular Kgalagadi Transfontier Park, but hundreds of kilometres from anywhere else. SJ and Denise lived in a caravan on the site for the first four months, and had to deal with the challenges and logistics of building something far off the beaten track. They didn’t give up, and today their lodge is a gem in the heart of the red dunes of the Kalahari.

The challenge

This is one of the most important, yet toughest, things start-ups - and more mature businesses - face. If you can’t make sales, you don’t have a business. Before you can sign deals though, you need to have access to your market.

The Solution

One way to gain access to market is through your location. For SJ, there was a captive market of tourists who wanted to visit the Kgalagadi Transfrontier Park, but couldn’t if the accommodation was fully booked. Over time, word of mouth ensured repeat business, but he had a market he could access based on his proximity to a very specific tourist destination.

"I can confidently say that, even though I couldn’t foresee all the obstacles we faced due to the location, I did my homework and research well, and we couldn’t have chosen a better location to build such a successful and beautiful lodge," he says. For SJ and Denise, location and lack of competitors was their access to market. Their delivery is how they’ve secured repeat business.

SJ and Denise Koortzen, co-founders of Kgalagadi Lodge, also spotted a gap, this time 1 000kms from Joburg and in the middle of the desert, but the same rules applied. Based on their experiences in the hospitality industry and what they knew of the Kgalagadi Transfrontier Park, there was a clear business opportunity.

"We visited the park often as it was close to our farm, and we always noticed how full the accommodation got - it was clear there was a high demand for more accommodation in the area, all we needed to do was find the right piece of land."

A new road to the Kgalagadi was also under construction, so the timing was perfect. SJ and Denise knew demand would only increase, with no new players currently creating offerings of their own.

Tara-Lee spotted an opportunity for a recruitment specialist who didn’t treat candidates or clients as a number, but could add a personal touch. To deliver that added level of service though, she needed to branch out on her own.

Do this: Pay attention to the world around you. There’s no such thing as knowing too much about an industry, target market or its needs. Keep a notebook for your observations - what frustrates you, what you would do differently, and what you love. These ideas will start percolating together until you formulate your idea.

Useful resources:

Entrepreneur Magazine
Entrepreneur is South Africa’s no.1 read business title. Each issue of the magazine delivers relevant, incisive, high-quality content that not only inspires entrepreneurs to achieve their own business success, but delivers a ‘call to action’ as well. Visit our InfoCentre or website.

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