Month: October 2010

2010 EOY winner the embodiment of real entrepreneurship

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Martin Beyers is no Richard Branson; he does not instantly draw you into his world with a wealth of charisma.

Neither is he a Steve Jobs; intent on taking over the world one iPod at a time.

He also does not remind you of Lakshmi Mittal; the creator of a global empire.

Yet, Beyers beat hundreds of South African business owners to win the 2010 Sanlam / Business Partners Entrepreneur of the Year ® competition.

The reason for his success in the competition – and in business – is that Beyers is the embodiment of real entrepreneurship.

Vision, creativity, innovation, careful planning, passion and hard work are the best adjectives to use.

The competition saw entrepreneurs from across the country vie for the title of Entrepreneur of the Year ®. They were subjected to strict judging criteria to ensure that the business was not only sustainable, but also exceptional.

Out of the 331 entries, 12 finalists emerged. Out of these, three category winners were crowned alongside the overall Entrepreneur of the Year ®:

  • Emerging Entrepreneur: Lovely Letsoalo – Wespark Itumeleng Pharmacy
  • Small Business Entrepreneur: Martin Brown – Radical Holdings
  • Medium Business Entrepreneur: Theo Bakkum – Awesome Snacks

Entrepreneur of the Year ®

This year’s competition saw a dramatic change to the prestigious Entrepreneur of the Year ® awards as the competition was opened up to all entrepreneurs in South Africa.

The award was initiated in 1989 by private small and medium enterprise (SME) financier, Business Partners to give recognition to the vision, innovation, perseverance, drive and commitment of the individuals who run successful small and medium enterprises.

In partnership with Sanlam, the competition was able to spread its net wider this year and introduced the three new award categories.

Business younger than three years old could compete for the Emerging Entrepreneur award and businesses with turnovers of up to R20 million could compete for the Small Business Entrepreneur award. The last category, the Medium Business Entrepreneur award, was reserved for businesses with turnovers greater than R20 million.

Each winner received R10 000 but the Entrepreneur of the Year ® 2010 walks away with R100 000 in cash and the opportunity to attend an international conference or trade show, as well as extensive exposure in the public domain.

Martin Beyers

CERadvance manufactures specialised ceramic solutions which are used in industrial processes. The Jet Park based business is a niche player in a market filled with large conglomerates.

It has been able to differentiate itself through pure innovation and this caught the judges’ eyes.

Judging convener, PwC Partner Stefan Beyers, explains that CERadvance’s ability to look far into the future and to develop products on a continual basis is exemplary.

This is because Martin Beyers has been able to turn his ideas into profits and build a sustainable operation.

“We looked at many different types of businesses. It is always difficult to choose a winner because each case is so unique,” Stefan Beyers says.

Jan Steenkamp, Executive Head, Cobalt Solutions, Sanlam echoes this, saying that the quality of entries in this year’s competition was extremely high.

But, Steenkamp also says that Beyers stood out because he is able to use his creativity to come up with solutions that add value to a client.

Beyers explains that he entered the competition as he has learnt to constantly revaluate himself and the business.

Through the Sanlam / Business Partners Entrepreneur of the Year ® judging process, people outside of his daily reality – the judges – could enter the operation, identify shortcomings and successes and help him to improve.

“Winning acknowledges that there is a legitimacy to the business, that it adds value and that it is worthwhile. Entrepreneurs want to know that they are on the right path.

“You constantly have to revaluate yourself to ensure that you are on the right path because the small business reality constantly changes.”

Celebrating entrepreneurs

Business Partners Managing Director, Nazeem Martin, says that the competition is first and foremost an attempt to celebrate entrepreneurship.

“If this country is going to go anywhere we need to ensure that entrepreneurs, entrepreneurship and entrepreneurial development is celebrated.

“Entrepreneurs need to take their rightful place as role models in South Africa so that when young people leave school or university, they consider it as a viable career option.

“The diversity of entries is an indication of the burning desire on the part of entrepreneurs to receive some form of recognition for the effort put into building these businesses and for creating jobs,” Martin says.

“Opportunity driven entrepreneurs, the ones that take advantage of a gap in the market, are the ones who usually create sustainable businesses. We have to celebrate entrepreneurs and honour them if we want to unleash the potential South Africa has in its youth.”

Steenkamp echoes this, saying celebrating entrepreneurs and the entrepreneurial spirit will act as an inspiration to others who have not yet made the leap into the small business environment.

The voice of SMEs

“We also want to ensure that the competition remains a national platform that brings real value to small business owners in their own businesses and the larger operating environment,” he adds.

“Through the competition and its workshops and seminars, we have created a platform for entrepreneurs to interact with their counterparts and be heard nationally. The SME space is often very lonely and the lessons learnt by these business owners over the years need to be shared.”

The Sanlam / Business Partners Entrepreneur of the Year ® awards will further build on this platform next year, starting with an SME conference in March. Here, SME decision makers will be able to voice their opinion of the operating environment presented in South Africa and the challenges faced.

The seminars, workshops and conference will focus on areas such as financial planning, financial fitness assessment, business opportunities and advice and access to finance. Information on legal developments and changes to the regulatory environment will also be shared with delegates.

Furthermore, the Sanlam / Business Partners Entrepreneur of the Year ® project will interact directly with public sector officials to ensure that the SME voice is heard in the highest offices.

“Our vision is that it becomes the prime conference on entrepreneurship in the country,” Martin explains.

“We believe that entrepreneurs are the true heroes of the South African, and indeed world’s, economic society.”

Entrepreneurial freedom

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Challenge becomes opportunity

Martin Brown has a competitive advantage that none of his rivals can beat: he is paralysed from the neck down.

Martin BrownIn Brown’s eyes, he is not disabled; he is ahead of the competition.

“If two people tried to sell you a wheelchair and I was one of them, who would you buy it from?” the Sanlam / Business Partners Small Business Entrepreneur of the Year ®.

This somewhat simple statement is the cornerstone of a business that is quickly blossoming into an international operation.

With partner Pieter Nell by his side, Brown has taken Radical Holdings from a concept created by necessity, to an operation that has seemingly no limits.

The beginning

Brown became paralysed at age 26 after a freak accident.

“My medical aid quickly ran out and there wasn’t any money for a chair,” he says, adding that his friends clubbed together to buy him a basic wheelchair. For the next three years his mother had to wheel him around the house as he was confined by the manoeuvrability of the chair.

Better chairs were available on the international market but the price tag made it a pipedream.

“When they pushed in that wheelchair, my state of mind would fall lower than my blood pressure; I could simply not see myself in that chair… Most of the people that are hurt are the adventurous type; those with a lust for life.”

Brown set about investigating the possibility of building a more robust and manoeuvrable chair. The idea sprouted into a rather robust business plan spanning 400 pages.

His motivation was rather simple. Firstly, there is a need for a robust but affordable chair. Secondly, people who have been hurt go through a rather prolonged mental process: “Usually, it takes people about six years to come to terms with (their disability). The shorter you can make this period, the better.”

Brown explains that your environment inhibits you. If you were an active person beforehand, you find yourself having to ask everyone for everything.

The moment you become mobile, you regain some independence. The more independence you have, the more you are able to live.

A business is born

Brown and Nell approached all the major banks and about 20 venture capitalists for the R500 000 they needed.

In the end, it was only the private SME investment firm Business Partners that believed in the concept.

“I think they are probably still reading through that business plan,” Brown quips.

Radical Mobility was born and the business now manufacturers a range of chairs. With adjustable seats, a rugged frame and wheels, as well as advanced electronic controls, it gives the user freedom of movement.

While the base models are all customised for the user’s body, the more expensive units are completely personalised and this includes items such as custom paintwork or wheels. Some models have 4×4 or 4×2 capabilities that allow the user to traipse almost any terrain.

The only standard component on the chairs is the basic frame. This means that Radical Mobility cannot set up a bulk manufacturing process. But, Brown does not want a bulk setup, as it is more important to ensure that the user is completely comfortable.

The partners are pedantic about quality control and Brown says that their first unit, made almost six years ago, is still operating and only needs new tyres every now and then. Similarly, some chairs have been passed down to others in their wills.

Brown’s chairs range in price from R55 000 to R100 000. Imported chairs cost anything between R100 000 and R200 000.

So far, the business’ ten employees have made 500 chairs and it takes between six and eight weeks to complete a unit. About 30% of his stock is for the export market.

The need

Because Brown understands the value his chair brings to the user, he also understands that the cost puts it beyond the reach of many.

“This is a business first and foremost. We have 10 employees and I am responsible for them and their families… For those who cannot afford the chairs, there is the Martin Brown Wheelchair Foundation that I started.”

The time and effort spent on the wheelchairs have created yet another unforeseen business opportunity and Brown says that the bases are being used in platinum mines. These units are equipped with vacuum cleaners that suck up dust which contains platinum. This recovering process not only increases productivity, but safety and security as well.

Not content with just making chairs, Brown has set his sights on making disabled people as independent as possible. This lead to the creation of Radical Computing. As a former IT professional, Brown says that standard PCs are not capable of attending to the needs of disabled persons. This business customises solutions for specific users and also automates home environments using infrared, voice-activated remotes.

Plans are afoot to integrate these technologies with the wheelchairs.

“We want to make it easier for people – the less help they need to ask for, the more freedom they have. The grand plan is to make someone as independent as possible because it increases their quality of life and that of those around them.”

In August, a new business also came into being. Radical Motoring installs automated ramps into vehicles for customers who are still able to drive.

Brown explains that the technology is available overseas but that the cost factor is a huge inhibitor. “When I hear of people importing things, I get very angry. Why should you import something when you can figure it out here (in South Africa)…

“My master plan is to go into the hospital when someone has had an accident and to take care of all their (mobility) needs before they even get home.

“I am in a chair and I know what they need and how it can change your life. I understand the frustration and that is our competitive advantage.”

 

Sweet smell of success

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Snack manufacturer master of reinvention

The saying adversity breeds opportunity is relevant to almost all entrepreneurs in South Africa, but none more so than Theo Bakkum.

Theo BakkumThe Managing Director of Awesome Snacks has had a turbulent decade to say the least.

But, it is the way in which he overcame the challenges presented which saw him crowned the Sanlam / Business Partners Medium Business Entrepreneur of the Year ®.

A new beginning

Bakkum held a number of directorships at Simba before becoming the Managing Director of National Brands’ Willards.

A restructuring process however, saw him being retrenched. Bakkum pursued a couple of business opportunities and in 2003 Awesome Snacks was born.

He explains that the four partners were all executives within the snack industry and just happened to be available at the same time. Today, three of the founders manage the business with an iron fist and their success in the market has been remarkable.

The Germiston based business produces a number of naks and curls, as well as powdered drinks.

Bakkum recalls how the company initially decided to pursue the retail sector as this was the arena they used to play in.

Awesome Snacks brought back the Ghostbusters brand and they struggled to keep up with the demand this old favourite created.

Unfortunately for them, Simba did not appreciate the move and the rights to use the brand were revoked.

Bakkum says that it was probably management’s legacy which lead to the business’ initial ups and downs: “We went into retail and nearly went under. We had to realise that we were no longer executives but small business owners.

“I also think we were arrogant. We had the Ghostbusters brand and we did not expect Simba to retaliate. We also underestimated the strength of Simba and Willards and that the market would not necessarily accept a new brand.”

Reinvention

All of a sudden, a successful business was in severe trouble and Bakkum says that they had no choice but to change direction.

“We were basically too small for the formal sector – we did not have the critical mass. Ironically, the informal sector is much bigger so we did the right thing (by focussing on this market segment).”

Awesome Snacks started producing their own branded products, hoping that the masses of school children they were targeting would accept their naks and curls.

They soon found however that this market is somewhat different to the formal, corporate market they were used to and Awesome Snacks needed to adapt.

“A nak is a nak,” Bakkum says. “We needed something extra.”

They secured the rights to use the WWE wrestling characters as well as some of the heroes from the Marvel comic franchise. Success was inevitable and today, the company moves about 350 tons of product each month.

The basics

There are a number of smaller snack manufacturers that operate in the informal sector and Bakkum has come to learn that understanding the market is the biggest key to success.

“Price is very important, as is the consistency of the product. It is very difficult to move these consumers across to your product because they do not want to take a chance.

“They have a limited amount of disposable income and they do not want to be disappointed with a purchase. But, once you have done it you have a customer for life.”

Awesome Snacks uses freelance sales consultant to move their goods through about 200 independent wholesalers throughout the country. From there, informal traders mostly sell their products.

Bakkum says that keeping the wholesalers happy is extremely important because they are repeat, cash customers. This element has also helped the business significantly as cash flow was boosted through the repositioning strategy.

Similarly, the business has invested in good machinery to ensure that production lines run smoothly and that product quality stays consistent.

Re-reinvention

While Awesome Snacks has successfully penetrated the informal market, recent developments showed them that diversification was needed.

Bakkum explains that the World Cup and the recent teachers strike saw volumes drop because their target market was not at school.

The company has now secured a deal to supply the Woolworths chain with its house-branded naks and curls. Bakkum expects that eight new production lines will be on offer within the next six months.

This will boost the business’ R80 million turnover and should increase the 162 staff members currently on the payroll.

Opportunity awaits

Awesome Snacks has successfully penetrated the mass market and it believes that there is still a lot of room for growth.

Bakkum says that there are many other SMEs who could follow suit: “I think the big corporates do not understand this market and that their overhead structure is too big to effectively compete in the market – they do not understand the (importance of the) costing structure.”

He explains that gaining market share is a slow process and that you need to chip away at it daily to increase the business’ footprint.

At the same time, Awesome Snacks rules it financial aspects with an iron fist.

“We look at our cost structure and micro manage the business. I can tell you at any time what the cash flow status is.

“We also manage our production numbers every day, as well as our stock on hand and debtors books. And, as partners we do not pay ourselves exorbitant salaries. We don’t have an overdraft facility and we don’t spend what we don’t have.”

He advises entrepreneurs not to overcapitalise if they operate in the informal sector as the daily business reality can quickly change through external factors such as a strike for example.

“There are opportunities for SMEs but you need to know what you’re doing.

You need to put a business plan together very carefully but then you need to live it. When it comes to (using) your own money, you better have thought about it long and hard.”

 

Bitten by the bug

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Pharmacist pursues entrepreneurial freedom

Lovely Letsoalo

Entrepreneurs come in all shapes and sizes but there is one common element that binds them: vision.

Where others saw an abandoned post office in Pretoria’s West Park, Lovely Letsoalo saw a beginning.

While it would be the beginning of a pharmacy, it would also be the beginning of a new business empire.

The pharmacist and Sanlam / Business Partners Emerging Business Entrepreneur of the Year ® says that during her rise in the corporate ranks, there was always a yearning to own her own business.

Over time, this goal could no longer be ignored and two years she decided to take the plunge.

Capital conundrum

Letsoalo spent a number of months honing her business plan and decided that the pharmacy would open up on 1 November 2008 come hell or high water.

But, this goal seemed destined to remain a pipedream, as she could not secure the finance needed.

“I went to a lot of different institutions. Obviously the banks would not touch me,” she says, adding that a government funding institution also pulled out two months before the business was to open.

Letsoalo explains that she had basically bankrupted herself in setting up shop so she was labelled as a high-risk investment.

Luckily, an uncle was able to lend her some money and the business was started with a mere R150 000.

“It was quite traumatic because I had very little stock. But I had done my planning and I knew it would work,” she says.

“I felt confined in my thinking by the (corporate) processes and procedures. I was always looking for an opportunity to go out on my own – owning a business was a childhood dream.

“I just knew that I was not made to be an employee. Here, I can do what I want and I don’t have to please certain personalities.”

Service success

Letsoalo explains that she had grown up in the area and that she always had to go far afield to visit a pharmacy. She wanted to give the residents in the area access not only to medicine, but also to the service that one expects from a family pharmacy.

Letsoalo might have had a pharmacy, but she did not have a lot of medicine. If a customer needed a specific prescription filled, she would immediately drive to the wholesaler and deliver it to their home: “People want to know that you care and that you will go the extra mile.”

This allowed her to prove her commitment to the community and the word started to spread.

“Looking back, I am actually happy that I didn’t have the money because I would have messed up,” she says with a wry smile. Letsoalo explains that the process also helped her to understand the pharmaceutical needs of the community so stock would not sit on shelves idly.

Holistic healthcare

While the 300 m2 building Letsoalo secured is ideally positioned next to a small community shopping centre, it is too big for her small business. But, she had taken this into account during the planning phase and sublet part of the building to a doctor, optometrist and a dentist.

Immediately, the premise was transformed from an empty building into a health care destination for the community.

Recently, Letsoalo also expanded her operation to include a primary health care clinic with a grant from SAB KickStart.

“I thought this is an opportunity. I had identified it years ago and no one had ever taken it up.”

Going forward, she would like to transform the clinic into a mobile operation in order to provide community vaccinations and corporate wellness services.

“The clinic does not need me to be there once I hire a registered nurse. So, it can make money while I focus on other aspects of the business,” she explains.

School fees

Letsoalo might be a qualified professional and she might have made her mark in the corporate world, but she says that the small business arena is a different kettle of fish.

She attended a number of courses offered by governmental support institutions but Letsoalo does not think these entities offered much value.

“It is shocking. You go there and speak to a matriculant who does not understand what you are talking about – it is like speaking to a wall.

“If I asked them to help me with a marketing strategy for example, they would suggest a website. My customers do not have access to the Internet. Flyers at church events for example, work better for me.”

Letsoalo adds that the changes introduced by government regarding mark-ups and dispensing fees allowed her to stay independent and avoid the franchise route.

Money talks

While the gross profit on medicine dropped by about 40%, she understood that most franchise operations make money from the front of shop and not through dispensing.

Letsoalo keeps a hawk’s eye on the media and if a large chain pushes cough syrup, she ensure that her pharmacy has a prominent display as well.

Similarly, she is unable to compete with the supermarket next door on items such as soap or toothpaste. But, because there is a doctor, dentist and optometrist in the building, she stocks specialist medical items that are covered by medical aids.

It is through this careful management that the pharmacy’s turnover doubled in its second year.

“In my next venture I will be a lot more efficient and it will be much easier for me to identify opportunities,” she says, explaining that she has treated her first operation as an opportunity to understand the underlying business principles.

This includes elements such as seasonality. Obviously cough syrups and flue medicines are in demand during the winter whereas sunscreen moves in summer months.

But, Letsoalo explains that most medical aids are depleted in November and December. This means that cash sales increase in turn.

In the end however, it always comes down to service and Letsoalo has enrolled her two shop assistants to be trained as pharmaceutical assistants. She explains that because they are not qualified, customers want to deal with her directly.

Going forward however, the assistants will be able to provide the necessary service, freeing he up to expand and grow the business.

 

One step at a time

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EOY winner the embodiment of real entrepreneurship

martin-beyers

Martin Beyers is no Richard Branson; he does not instantly draw you into his world with a wealth of charisma.

Neither is he a Steve Jobs; intent on taking over the world one iPod at a time.

He also does not remind you of Lakshmi Mittal; the creator of a global empire.

Yet, Beyers beat hundreds of South African business owners to win the 2010 Sanlam / Business Partners Entrepreneur of the Year ®.

The reason for his success in the competition – and in business – is clear within minutes of meeting the man: he is the embodiment of real entrepreneurship.

Vision, creativity, innovation, careful planning, passion and hard work are the best adjectives to use.

 Vision

Beyers studied ceramic technology and worked as a production manager and product developer for a large multinational.

He explains that in the ceramic industry, volumes and standardised products are the name of the game.

“My passion lies in product development and I realised that my interests were not aligned with that of a big firm.”

Because the industry is so specialised, most players know each other and partner Dave Kelly approached Beyers in 2000. Kelly operated as a ceramic reseller but saw the potential a production line offered.

Today, CERadvance is completely focussed on providing its client base with specialised ceramic solutions.

The Jet Park based business is a niche player in a market filled with large conglomerates and Beyers intimately understands the operation’s place in the food chain.

Innovation

Beyers says that the ceramics industry largely focuses on the hardness aspect of their products to add value. But, ceramic is also a material that is extremely heat and corrosion resistant.

“It was only logical to focus on these elements. If you focus on solutions that are commonly available, you need to be volumes driven. This means that it is difficult to focus on niche products where you need to have a lot of interaction with the client. You only have one chance to prove yourself.

“There is space for both approaches in the market but they are extremely different.”

CERadvance acts as a technological partner to its clients where specific solutions are developed using ceramic technology. While this approach might take some time, the eventual solutions offer the client significant cost savings and improved efficiencies in the long run.

Beyers explains that the less often you have to replace a component through wear and tear, the less downtime you have in a production facility. It is this practical cost saving that allows the business to be a niche player in a standardised, volume-driven market.

“You need to understand your product and what it can do. Then, you need to able to look at specific applications. I was lucky in having clients who were hungry for better solutions and who essentially challenged us to come up with products.”

The proof is always in the pudding and CERadvance has managed to double its turnover in the last year to about R15 million.

Beyers explains that the business has grown exponentially in the last number of years as the recession has forced its clients to improve efficiencies.

Planning

For a small, niche player it always difficult to compete against large competitors. Beyers says that from day one, he attempted to provide CERadvance with a professional image that would instil confidence amongst clients.

This included ISO 9001:2000 certification, lecturing at local universities, being visible at seminars and expos and joining industry associations.

He explains that it was extremely important to let the market know that the business was not a fly by night and that their solutions were practical and offered direct value.

“No amount of marketing can beat offering value,” he says with a smile.

CERadvance finds itself in a Catch 22 situation when it comes to product development and capacity. Beyers explains that if a contract is secured, the business needs to be able to deliver immediately. But, this means investing in machinery and infrastructure when the contracts are not yet on the books.

“If you don’t take the risk you will never win. But there is a whole lot of educated guesses behind the decisions.”

This strategy has paid off over the years through continual reinvestment and at the moment, CERadvance’s factory is rapidly becoming too small for its 25 staff members and their production lines.

Hard work

Beyers’ solutions are unique to each client and he explains that you cannot implement a specific solution developed for one scenario in another.

This, to him, would be a dangerous move because he will be unable to completely guarantee the results his clients have come to expect.

But, this reality also means that there are a number of products being developed at any given time. The lead times range from a few weeks to a number of years.

“Some of our products have been in a constant state of development and improvement for six years. The secret is to have a number of products in the pipeline.”

Beyers expects that some products might become standardised as the business moves into a new era but he is quick to add that philosophy has always been “one client, one solution”.

He seems to take the pressure that comes with this business approach quite easily and the secret lies in the enjoyment received through successful product development.

 Self-evaluation

“Creativity is close to everything I do. I think that if an artist does something (remarkable), it is called creativity and if an engineer does something (remarkable) it is called innovation. To me, it is the same thing.

“You don’t have to write a business plan that says: “we will innovate”. It comes to light through the daily operational processes; by finding solutions to problems as they arise…

“There are two parts to innovation. The first is to come up with an idea and the second is to pitch this idea in a way that it defends and sells itself.

“I think there is a shortage of people in South Africa who are able to successfully commercialise their ideas.”

Beyers has learnt to constantly revaluate himself and the business and this was one of the reasons for entering the Sanlam / Business Partners Entrepreneur of the Year ® competition.

He explains that the process allowed people outside of his daily reality – the judges – to enter the operation, identify shortcomings and successes and help him to improve.

“Winning acknowledges that there is a legitimacy to the business, that it adds value and that it is worthwhile. Entrepreneurs want to know that they are on the right path.

“You constantly have to revaluate yourself to ensure that you are on the right path because the small business reality constantly changes.”