Category: Articles

Entrepreneur of the Year® competition honours Dr Richard Maponya

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The Lifetime Achiever Award is the highest accolade in the Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS and it is never up for competition. The deeds and achievements of the person who receives the award speak for themselves.

The Lifetime Achiever Award is conferred on an established entrepreneur who has made great strides in business over many years. In our 30 year history, we have only ever given this award once in 2015 to Ms Margaret Hirsch, co-founder of Hirsch’s.

Our 2018 Lifetime Achiever Awardee is Ntate Dr Richard JP Maponya, Chairman of Maponya Holdings. Dr Maponya is a living legend and his family name is synonymous with entrepreneurship in South Africa. He is an outstanding role model for entrepreneurs across all genders and races and an excellent mentor.

He was awarded the South African National Order, the Grand Counsellor of the Baobab (GCOB), in April 2007 and his contributions to the South African economy cannot be overstated. As the Entrepreneur of the Year® committee, we are honoured that he granted us permission to celebrate him.

Dr Maponya is an epitome of an entrepreneur.

  • Born in Thlabine, a small village near Lenyenye, Tzaneen, in what we now know as Limpopo, Dr Maponya was trained as a teacher which is not surprising that he mentors other entrepreneurs.
  • He became an entrepreneur around the age of 24 in an era when black entrepreneurs faced many obstacles that prevented them from being successful.
  • From clothing to milk delivery service to cars, retail and property development, he persevered and made a success of business.
  • Dr Maponya is a visionary. In 1979 he secured land in Soweto, first on a 100-year lease and then, in 1994, after several attempts, he acquired it outright. This is the land on which Maponya Mall, one of the largest shopping centres in the country, was built and opened in 2007.
  • He was part of South Africa’s power couple and part of his success is attributable to the beautiful partnership with his late wife, Marina Maponya. Together they raised entrepreneurial children, successful in their own right.
  • Dr Maponya is an activist and was the Founder and President of NAFCOC (the National African Federated Chamber of Commerce and Industry) in 1965.
  • Dr Maponya is a community builder and since SA is celebrating 100 years of Nelson Mandela, it is worth noting that Dr Maponya is Founder and Trustee of Nelson Mandela Children’s Fund. He is also the man who drove President Mandela on the day he was released from jail and he also provided the fleet of vehicles used on that special day.
  • Dr Maponya has built a formidable business empire in the democratic South Africa, which should remain for generations to come.

Entrepreneur of the Year® competition celebrates Christo Botes, executive director: Business Partners Limited

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The Lifetime Ambassador Award is bestowed on an individual who has spent a notable period of their lives in the service of entrepreneurs and/or contributing to the success of the Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS.  

This is the first time we are bestowing this award and the Entrepreneur of the Year® competition team believes that they could not have selected a more deserving person.

The recipient of the 2018 Entrepreneur of the Year® Lifetime Ambassador Award goes to Mr Christo Botes – executive director at Business Partners Limited.

Botes is a wise and humble person who has been an integral part of the competition since it was introduced 30 years ago. He is the voice of reason in any boardroom where he participates. He is an advocate for entrepreneurs and always wants to see them succeed.

Botes’ vision and leadership has seen the competition grow from being an internal competition for Business Partners Limited to being a premier national competition for recognising entrepreneurs in the SME space.

His tireless efforts involve reviewing each entry that lands in our inbox and assessing it not only with the aim to the entrepreneur becoming a finalist but to also see that entrepreneur grow as well.

Every year he visits each of our competition finalists in order to understand them and their businesses better and to provide feedback to judges where they may have missed an important aspect of the business.

Under his leadership the Entrepreneur of the Year® competition has unearthed entrepreneurs and celebrated finalists and winners from as far as the dusty streets of QwaQwa to the skyscrapers of Johannesburg.

Methods to create leads for your business

Posted on by Sanlam
By Jannie Rossouw

Head: Sanlam Business Market

The pipeline of any business needs to be continuously filled with new client prospects. Options are a dime a dozen – the real challenge is to find the ones which lead to the best business outcomes for your type of business.

It is of paramount importance to track and measure the outcomes and success of every marketing element you apply in your business. In this way you can determine what works and then redirect marketing spend to these marketing elements.

Here are 5 lead generation options to consider for your business:

1. School newsletter advertisements

Most schools have more than 1 000 children in attendance. Schools normally publish a quarterly newsletter to keep parents informed about school activities. Most of them also make use of advertisers to co-sponsor the cost of the newsletter. It is a very inexpensive way to promote your business if your product/service is focused on a retail customer base. You can ‘sweeten’ the deal by offering a discount or upsell option when parents provide you with a copy of the advertisement. The cost for an advertisement or A5 insert is mostly a couple of hundred rand per newsletter batch.

2. Business branding (building and vehicles)

A well-branded building, office or business vehicle goes far in making your business visible in the area in which you operate. Most of us can cite examples where we needed a service and whilst on the road saw a vehicle or a building/office which does exactly what we require. If the contact number and website details are clearly visible, it makes it easy for people to write it down or take a picture.

3. In shopping centre signage

Use an A-frame stand with a catchy heading or offer and with an arrow pointing in the direction of your shop. This is useful when your shop is situated in a place with less passing feet. You do, however, need the permission of the centre/mall management.

4. Stickers and fridge magnets

I first saw this tactic after a local electrician completed electrical work at my home. He stuck a sticker with their contact details on the electricity supply board. Now I knew where to get hold of them the next time I needed the services of an electrician. You can also apply this option by writing a brief note to introduce your business to potential clients and adding a sticker/fridge magnet to the note. Use the services of a graphic designer to develop an enticing sticker or fridge magnet.

5. Mutually beneficial campaigns

You already know of businesses that do not compete with yours, but service clients in your target market. You can develop a proposal, which can be mutually beneficial, by offering to pay the other business to e-mail your offer to their clients, to share a referral fee with them on all concluded new business on the back of their mail-out and even offer to do the same for them on your client base. The premise is that client information is recorded.

“You are out of business if you don’t have a prospect!” – Zig Ziglar, American author, salesman, and motivational speaker

To support business owners with the important task of business planning, Sanlam gives you free access to the book Your Annual Business Game Plan for Success, which provides an easy and straightforward framework needed to draft a well-crafted game plan that will create the positive change and growth necessary for business success.

Go to www.sanlamgameplan.co.za to download your free copy.

Ten tips for increasing diversity in your workplace

Posted on by Business Partners Limited

When businesses start up, they are often small, tightly-knit groups of pioneers that come from the same background, even from the same family. This works very well in the early survival stages of a venture, but as soon as the business reaches a more stable post-survival growth phase, the founders have the opportunity to look around a bit more widely, and to diversify their workforce.

Those who don’t, forego the richness of varied ideas and run the risk of stagnating, and remaining small and insular. But human resource diversification, like any process of change, can be uncomfortable and risky, says Kgomotso Ramoenyane, Executive General Manager of Human Resources at Business Partners Limited. She offers the following ten tips for entrepreneurs who want to bring diversity into their businesses in the right way:

1. Ask yourself why

Start with examining your reasons for wanting to diversify your staff. If you only want to do it in order to score B-BBEE points so as to get more business, chances are that you are going to find it a frustrating exercise that is likely to strengthen the prejudices of those in your organisation resistant to the idea.

But if your reasons are based on true long-term business advantages of diversity such as more creativity and innovation, increased productivity and opening up new markets. The reasons orders your thought processes and gives you a set of priorities with which to work.

2. Set your targets

You can introduce diversity into an organisation in so many different ways – age, gender, race, sexual orientation, religion, abilities – that you cannot do it all at once. Pick realistic targets aligned with your reasons for diversifying.

3. Get buy-in

One of the key dynamics of human resources diversification in a business is increased interaction and collaboration between diverse people. It would be odd, and most likely doomed to fail, if you were to start such a process without first gaining the collaboration of your existing team around the idea, the reasons for it, what to expect, and how it is going to be rolled out and measured. 

Given that most small business owners might not have the experience with this process, it might be a good idea at this stage to consult one or two of the organisational change experts available in the market to assist.

4. Recruit according to your plan

If you hold out for the perfect candidate with just the right profile, skill set and aptitude, you are probably not going to make much progress. On the other hand, if you are simply going to appoint token candidates, the project is not even worth starting.

5. Integrate the differences

Recruitment is just the start of diversifying your staff. The whole point of human resources diversification is to forge different perspectives and experiences into a rich, vital team. It takes a lot of work from management to embrace differences and obtain maximum performance levels from a diverse team. It means listening to many different inputs and taking them all seriously, without necessarily throwing out every established way of doing things nor having to try to find a perfect compromise about every issue.

6. Encourage mentoring and coaching

New recruits can always do with some mentoring and coaching in any business. Someone brought in from a different background and experience to the dominant culture of the company is likely to benefit even more from support in the beginning. Pairing such new recruits with experienced members of your staff in a mentorship relationship can go a long way to help form the new bonds that lie at the basis of the idea of diversity.

7. Weed out discriminatory policies and practices:

A diversifying company is likely to come across established practices that unintentionally discriminate against newcomers with differing needs. Staff members in early motherhood might need flexible hours, strict rosters might prevent a worker from attending mosque on a Friday and even a set of stairs might be a formidable obstacle to a staff member with a disability.

8. Start new projects

An influx of fresh blood into a business is a fantastic opportunity for a company to try new projects with diverse teams. It almost defeats the object of diversification if the intention is to stick to business as usual.

9. Look for commonalities

One way of weaving the differences between diverse employees into a rich tapestry is to focus on the opposite – the things that they have in common. Pointed discussions of shared interests and values, and planned activities to emphasise those will help to forge the bonds.

10. Celebrate successes

Diversifying is a difficult and uncomfortable process. It is therefore important to not only to fight inevitable pockets of resistance and come down firmly on individuals who cause unnecessary friction, but also to emphasise the positive by celebrating every milestone towards a truly diverse workplace.

Finalists announced for premier entrepreneurial competition’s 30th edition

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Celebrating three full decades of discovering and cultivating the best entrepreneurial talent that South Africa has to offer, we have announced the shortlist of 15 standout entrants who have made it through to the final round of this year’s Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS.

The 189 entries that were received this year really upped the game in terms of the entrants’ entrepreneurial talent and achievements. Every year, we think that we’ve seen it all, but each year we find ourselves being further blown away by the level of talent being exhibited by the South African entrepreneurs who enter the competition.

In alphabetical order, the finalists for the 2018 competition are:

Andrew and Glenn Eriksen – Cango Wildlife Ranch; Beverley Gumbi – Isivuno Containers Business; Chike and Damaris  Igwegbe – Green City Solutions, t/a Mustbuy; Christina Ester Geldart – Marven Studios; Esi-Gifty Agbohla – Eli-Bionatural International; James Barrington-Bronwn – NewSpace Systems; Kerry and Craig Motherwell – Foxolution SE CC; Leboneng Mathebula – Gridbow Engineers; Louw Barnardt and Dana Pretorius – Outsourced CFO; Muhammed Simjee and Sofiah Docrat – A2D24 Dot Com; Pepe Marais and Gareth Leck – Joe Public; Phillipa Geard – Recruit My Mom; Praveshen Naidoo – e-Waste Africa; Terence Naidu – EnvisionIt Stock and Tshegofatso Samuel and Motlapele Molefi – Modi Mining.

These 15 finalists operate in various sectors of the economy and are based across the country. While the majority of these finalists originate from Gauteng (47%) and the Western Cape (33%), we received entries from all provinces and KwaZulu-Natal (13%) and the North West (7%) are both also represented in the finalist list this year.

With a wide variety of industries being represented, from mining and engineering to recycling and advertising, there is one thing that all 15 finalists share in common – their invaluable contribution to the South African economy. The SME sector continues to play a vital role in the South African economy, so these trail-blazing self-starters need to be celebrated for what they are – job creators and economic change-makers.

The next step in the independent judging process is the selection of the overall 2018 Entrepreneur of the Year® winner, as well as winners for each of the five categories, namely emerging, small business, medium business, job creator and innovator. By running the evaluation process through three different filtering stages, we are able to ensure that every finalist is put under the microscope to avoid any human error or bias from tainting the results.

The 2018 finalists stand the chance to win prizes worth R2 million, which include cash prizes of R70 000 per category and R200 000 for the overall winner. Beyond monetary prices, previous finalists have benefitted greatly from the various networking opportunities and associated media exposure that the competition offers. Past winners have also gone on to win international awards and form valuable partnerships as a result of their success in the competition.

With competition winners being announced on 5 September 2018 at the official awards ceremony in Johannesburg, the judges have got their work cut out for them this year. The calibre of entrants this year looks to be extremely high so deciding on winners will be no easy feat. We wish all finalists the best of luck – you’re all already winners in our eyes.

Getting the most out of a mid-year review

Posted on by Business Partners Limited

Research compiled by the University of Applied Sciences in Germany in 2016 has shown that only 20% – 30% of small and medium enterprises (SMEs) in South Africa survive longer than five years. In addition, the research found that the common trait distinguishing a successful business from a failing business is its owner’s ability to adopt a proactive approach to running the business and to accurately execute plans.

A lot of successful small business owners understand the importance of conducting a detailed annual review, which includes reviewing past performance and potential opportunities for the business, setting expansion goals, identifying financial targets and assessing the overall health of the business. It must be said though, that one of the biggest mistakes that an entrepreneur can make is to believe that one review is enough to keep a business on course for an entire year.

With the middle of the year around the corner it is the ideal time for business owners to conduct a mid-year review.

The primary function of the mid-year review is to assess the business’s progress against its annual goals, as no good comes from waiting until year end to determine whether the business has managed to reach its targets.

Examining provisional sales figures, evaluating recent successes and failures and measuring staff performance during a mid-year review will help the entrepreneur to intercept problems early on as well as identify opportunities that may disappear by the time that the annual review arrives.

Lastly, there is no better way to boost employee motivation than a mid-year revision of their personal goals, performance assessment and recognition of their successes over the previous six months.

To ensure that the maximum value is extracted from a mid-year review a top-to-bottom examination of the business is necessary while following a detailed checklist to help stay on course.

The checklist of the ideal mid-year review

In order to get the most out of mid-year reviews, the business owner should ensure that five vital bases are covered:

  1. The first thing to review should always be finances. Organising financial documents both digitally and physically as part of a mid-year review prevents surprises, losing information and many wasted man-hours in last minute filing when the end of the year arrives.

    Naturally, this is also the time to review the business’s financial goals, specifically whether targets are being met and identifying how losses can be recovered as quickly as possible.

  1. Next on the list is an in-depth evaluation of the entity’s legal and tax positions. Ignorance is not a viable defence against legal or tax non-compliance, which is why the business owner needs to make sure that the business is still in the best possible position.

    Ensure that taxes are up to date, the necessary paperwork is in order and that there have been no regulatory changes that could impact the business in future. This is also the time to review client and service provider contracts to make sure that the agreements are still enforceable and up to date.

  1. A mid-year audit of the company’s marketing strategy can help the entrepreneur to keep business numbers up throughout the year. It is important to conduct a website audit to ensure that all the information on the various pages are still in order and up to date. This step should also include customer check-ins and quick social media audits.

    Being proactive in this regard also requires the business owner to conduct a formal update on what the competition is currently doing. A new disrupting product or service launch by a rival business can hurt both market share and revenue. In addition to identifying upcoming challenges, business owners may come across good ideas to incorporate into the business.

  1. The fourth item on the list is an examination of the company’s risk management measures and to check that the company’s disaster recovery plan is still relevant. If the risk of protest actions or weather related perils seem to have increased in recent months, the business interruption and recovery plan should be revisited as a point of priority.

How to improve your profit margin

Posted on by Sanlam
By Jannie Rossouw,

Head: Sanlam Business Market

It is said that there is nothing new under the sun … and this is also true for business. The reality is that most of us need to be reminded about the options available to us, which may well improve the bottom line of our business.

Have you considered applying any one or more of the following to improve your profit margin?

1. Is overtime really needed?

If overtime is continuously needed in a business it poses the question of whether you are (a) under staffed, or (b) inefficient. One way to find out is to ban ALL overtime and then actively monitor the output of your staff. Overtime can become a ‘habit’ where inefficiency is tolerated. We are living in difficult economic times where it might be to the financial benefit of staff to prolong delivery on their outputs. Have you made sure that your business processes are optimal and also that you know what the reasonable output/delivery capability of each staff member should be? Well-documented and efficient business processes and output monitoring measurements will be a good gauge for determining the necessity of overtime, or whether staff expansion might be a more cost-effective solution for meeting output requirements.

2. Costing – the baseline of business overheads

Do you know the actual cost of each stock item/service offer, or are you working with ballpark figures? On the whole you might be making a profit, but you might be under-pricing your stock or service offer, because you have not run the numbers. Put in the effort to calculate the real cost of each stock item/service offer and benchmark your pricing strategy in the market. You don`t need to be the cheapest product/service provider in the market. This might enable you to increase your prices with the stroke of a pen and still remain competitive.

3. Reduce costs

Put in a concerted effort to reduce cost by a fixed percentage (e.g. 10%) on all cost items in your business. This will force your team to be more diligent in how they spend their budgets. 

4. Consignment stock

Why do you want to outright purchase stock for your business to sell? Rather rent out retail space on your shelves and fill it with consignment stock. This will have a positive effect on your cash flow and bottom line. 

5. Do you need to do everything yourself?

Are there any non-core activities in your business? Think of human resources, information technology services, cleaning and maintenance of premises. When making this decision it is of paramount importance to keep control of activities that improve customer value and drive profits – this is strategic to the business. ‘Non-core’ activities are generally defined as day-to-day routine tasks that add little value and are not adding to the bottom line. 

There is an old adage which states: “Turnover is vanity, profit is sanity and cash is reality.”

Finding the start-up sweet spot

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Entrepreneurial lessons from generations of entrepreneurs

Picturing a typical entrepreneur – the chances are you visualize a young, mission-driven techie with a mind-blowing idea that will make him or her the African version of Mark Zuckerberg.  While the fast, digitized millennial entrepreneur’s approach to business is highly beneficial for future success; there’s a lot to be said for more seasoned entrepreneurs and the wisdom they have gained during their years in the game.

Gugu Mjadu, spokesperson for the 2018 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, says that instead of pitting one generation against the other – entrepreneurs looking for guidance should seek out a sweet spot between the two – as there are important lessons to learn from both:

Entrepreneurship is a tricky road at the best of times. In South Africa, the business ownership path is littered with a number of macro and micro environmental challenges making entrepreneurship even more difficult. These include access to markets, successfully navigating the legislation landscape and accessing finance. With this in mind, it is important for entrepreneurs to seek out advice from as many trusted sources as possible – to ensure they learn and gain insight into how to prepare their own business for success.

As the world of work shifts and evolves, it’s important to recognise that business lessons can come from all generations in the entrepreneurial world.

This includes millennials, who characteristically approach life and business with a fresh ideas and a new perspective on existing methods. Some valuable lessons from the millennial entrepreneurs include:

1. Be different – and not just in your USPs

Millennials are generally recognised for their ability and enthusiasm to stand out and be different. Differentiating from your competitors in the market with Unique Selling Points (USPs) is something all the entrepreneurial text books will tell you – but ‘being different’ goes beyond this. Entrepreneurs shouldn’t be afraid to show their unique characteristics, to embrace diversity and look for opportunities outside of the proverbial box.

2. Question everything

Characteristically, millennials are curious. There is plenty to learn from this character trait – being willing to question why things are done in a certain way, and being brave enough to question if historical processes are still relevant and efficient. There is nothing wrong with changing the way something is done if it doesn’t suit your business. Standard practices are ineffective if they don’t evolve with your changing business needs.

3. Do and do quickly

Millennials were born into the technological age – they have grown up in a world filled with instant gratification, artificial intelligence, the internet of things and always-on connectivity through the internet, smart phones and social media. As a result, these entrepreneurs tend to work faster and this plays into the growing global trend of ‘failing fast’ – the skill of knowing when to stop planning and execute, and additionally, to recognise and stop doing something when it is not working.

On the other hand, seasoned entrepreneurs, who are perhaps more traditional and methodical, also have priceless tips and best practices as well as lessons on what not to do – all of which are valuable takeaways:

4. Be open to learn

Many established entrepreneurs admit to regretting their youthful arrogance when they first started their business. They have realised through years of experience that learning comes in many forms – advice from a business mentor, lessons through reading or even from receiving harsh criticism. Entrepreneurs should be open to looking at every situation as a learning opportunity – if something didn’t go well, what can be changed? If something went well, how can it be further improved or how can that process be applied to other areas?

5. Be deliberate

Part of building your business is building a network of clients, suppliers and other internal and external stakeholders. More seasoned entrepreneurs will attest to the value of being mindful about who you conduct business with – essentially, you want to trust your suppliers and stakeholders as they are an extension of your own brand. You want to deliberately pick out and nurture these networks as they are the relationships that will take your business further.

6. Don’t be afraid to fail

More established entrepreneurs, having been in business for a good while longer than millennials and having suffered more than a few set-backs themselves, will explain that the key is not to become despondent when things don’t work out. Failures are natural, and necessary for growth. As long as you actively learn from mistakes and proactively take steps not to repeat these in the future – failures can be the most valuable stepping stones to success.

Ten tips for managing the lifeblood of your business

Posted on by Business Partners Limited
By Byron Jeacocks

Regional General Manager, BUSINESS/PARTNERS

Nothing is as important to the financial health of a growing small business as the constant, predictable flow of cash, because if the cash dries up, the business will die.

Cash is to a business what oxygen is to a body – it simply cannot survive without it, even briefly.

The one plan that every entrepreneur must have to ensure survival is a cash-flow budget, and you must stick to it as if your life depended on it. The following tips should make sure that enough cash keeps flowing through your business.

1. Underestimate your sales and overestimate your expenses

Unfortunately entrepreneurs, being optimistic by nature, tend to do the opposite. Great sales are predicted and expenses ignored, with the result that the cash flow budget starts off from the wrong base. If you are working on the cash-flow budget of an existing venture, base your predictions on the historical figures, and be conservative with any sales increases. Remember to take seasonality into account. With a new venture, use only the most likely, tangible sales that you will be able to make, not some abstract market-share calculation.

2. Be frugal

Cut out all nice-to-haves from your overheads as well as any capital acquisitions. Check your expenses regularly. Overheads have a sneaky way of constantly creeping up, and they need to be checked and queried regularly. Be careful, though, not to cut too deeply, especially when it comes to marketing expenses, which often seem like luxuries but can actually be an indispensable investment for future sales.

3. Avoid unnecessary debt

It is actually easier to find finance for your business than is generally thought, especially if you broaden your sources to family and friends. The real hard part of business finance is paying it back, rather than finding it. Use debt only as part of a carefully managed financial plan. Try to match the term of the debt to the lifespan of the asset that you’re buying.

4. Have a strong credit policy

Very few businesses can afford a client going bankrupt with a large outstanding invoice. It is important to have some form of credit vetting – don’t simply offer the same terms to every client that comes along.

5. When you do sell on credit, be absolutely clear about the credit terms and hold your debtors to them

Many entrepreneurs, who are often involved on the sales side of the business, feel uncomfortable getting involved in chasing up overdue invoices, to the extent that they even accept short and late payments. There is a fear that informing a client that you need the money will send a message that your business is in trouble, or weak, and that this perception may complicate future negotiations. The answer lies in clear credit terms, and insisting from the start that all your clients stick to them. A friendly but firm staff member can be tasked to chase up the invoices.

6. Keep your invoices timely and accurate

Many debtors will use the least excuse to delay payment. Don’t give them one by letting mistakes creep into your invoices. Make sure the information in the invoice is clear and include your debtor’s VAT number and your banking details so that it becomes easy for your client to pay you.

7. Work on your creditors

If your growing business gets paid after it has to pay its creditors, it will remain painfully cash hungry. Your aim must be to negotiate longer terms with your creditors than you have with your debtors. Avoid making yourself guilty of the same delaying tactics that some of your debtors will try on you. The key to good creditor terms is trust built up over years of prompt payments and good communication.

8. Free up the cash in your unsold stock

Putting slow moving stock on sale not only returns cash to your business, but gives you an opportunity to create some excitement and draw in new customers.

9. Liquidate your white elephants

Selling unused assets cluttering up your work space can give your business a welcome cash-flow boost.

10. Don’t do the ostrich trick

When you experience a cash crunch, the worst thing you can do is to stick your head in the sand and believe that your creditors can’t see you. Yet this is what many entrepreneurs do – they avoid taking phone calls from creditors, they jump to new suppliers and postpone making contact until they are able to settle the bill in full,

The right approach is to be open and upfront about your situation. Small, incremental payments show your creditors that you are still around and in business. Even if your account is overdue, negotiate cash purchases with the same supplier rather than jumping to a new one.

When cash dries up in your business, production falters, clients are let down and you lose business fast. But there is also the immense emotional strain on the entrepreneur that needs to be taken into account. It spills over into the workplace morale and can lead to bad, panicky decision making. As always, a sober plan to get out of the crisis might save your business. But by far the best option is never to get into a cash-flow crisis in the first place.

What people really buy

Posted on by Sanlam
By Jannie Rossouw

Head: Sanlam Business Market

It is said that the perfect timing for a sale is when a client has a need and our business is aware of this need and ready with our product/service to offer a solution. This is all good in theory, but how do we make this happen in practice?

I guess the person who can answer this loaded question will be an instant success. My caveat is, therefore, that I am not proclaiming to have the answer, but I do have a couple of suggestions for moving closer to an answer.

There are mainly two reasons why people buy any product or service:

  • The need to avoid pain, or a loss
  • The need to gain pleasure

If this is true, then how do they decide to consider and buy a specific product or service?

It boils down to the benefit(s) they will receive and if these benefits will address the reason(s) they were looking for a solution in the first place.

Let us look at a couple of examples to drive the message home:

Example 1: You own a carpet business. It might be better to position your product as something that helps people to decorate their homes; i.e. you are selling beauty, not carpets.

Example 2: You are a business advisor. You are not selling consulting methods, but rather improved business performance and increased turnover or profits; i.e. improved profitability.

Example 3: You have a deli focussing on organically grown produce. You are not selling vegetables or naturally grown foods, but rather health.

Example 4: You are not selling financial planning products, services or advice, but rather wealth or peace of mind.

How to apply this learning in our businesses:

Compile a list of all the benefits your target client will receive when they buy your product or service. Then choose the one or two benefits with the strongest client value (many times it speaks to the emotion of a person) and use it in all your marketing and sales endeavours.

So, the answer to why people buy any product or service might be far removed from our perspective about the business we own or operate.

“Know what your customers want most and what your company does best. Focus on where those two meet.” – Kevin Stirtz, business author and strategy manager.