Second last article in the LIFE series and now I’m going to discuss entrepreneurship with entrepreneurs.
Yes, you and you……..
If your job includes:
Setting up a business in the hope of making a profit,
then you are an entrepreneur.
I would put to you that every bond originator, estate agent, principal or a plethora of other occupations that employ you and/or others where the income ranges from commission to fat profits, is an entrepreneur. Anyone who is self-employed is probably an entrepreneur but anyone who is employed can be an intrapreneur and we’ll mention your role below. Bottom-line, the attributes of an entrepreneur can be applied whether you have your own business, work for a boss, or wish you didn’t and you intend to find your way out.
So as not to preach to the converted, let me start with drive. In this context, it probably means that you have done it on your own, want to do it on your own or, at least, think you can do it on your own. You know my old adage, you want to employ people who believe that they could employ themselves. That makes a boss uncomfortable and employee wide awake to opportunity. It raises the creative tension on how the boss treats you and how you treat the opportunities in her business. You want to learn and achieve, she wants productivity so she’s teaching you, exposing you, stretching you and eventually, unless you have something to stay for, you could find yourself as a blue-blood entrepreneur. With that cycle established, it’s not surprising that entrepreneurship includes:
- A new business
- A drive to succeed
- A risk
- A profit motive.
Those of us who’ve done it, know that profits are a by-product of sweaty hands and foreheads, also called “stress”, so let’s tone it down a little. Like you get the Health Warning on TV in a stunt act “don’t try this at home”, never think entrepreneurship is easy. If it is, you’re probably one of many who have tried and failed, or succeeded. If they failed, beware unless you know why. And, if they succeeded, beware because competition does not let you in easily. Ask Luyt Lager, Top TV et al. They thought they could win, but ran out of steam; admirable effort but a loss. On the other hand, Blue Label Telecoms entered the market of telecommunications when it looked impossible to succeed against the giants and they won a profitable share. Every estate agent and bond originator has the same story and I guarantee, to a greater or lesser degree, they have succeeded along similar principles.
You need to risk it. You could spend another’s money and he would forgive you, but deep down there must have been something to lose. Whether it’s your own, the bank’s or someone else’s or a mixture, honour should come into play. It’s wonderful to win but it’s horrible to lose. Risking it is not for fools and remember, once you have, the Law of Unintended Consequences kicks in. The best laid plans of mice and men, cannot foresee all that may happen. Normal risks around profit margins, turnover, costs etc. can be built into models, but those which you cannot see are a blow to the financial solar plexus. Expect them, whatever they are, but just as importantly, know that they will be there and suss them out from people in business or in your industry of choice before you venture in. Homework is the best work before you take the plunge; you will not be sorry. Linked to this financial aspect is the size of the downside. I remember going into BondExcel and signing a lease for our building [I drove past it the other day in Republic Road with fond memories]. Round figures, it was R4000 for 6 months, or R24000. Knowing we had earned nothing yet, I can tell you that was an enormous decision for me. But that angst taught me something which I’ll simply express like my mother taught me, Look after the pennies and the Pounds will look after themselves. Or, put another way, because we turned every cent, the Rands came in due course.
The idea and the intellect and the drive need to match. In the old days, a guy by the name of Tony Factor set up a retail store in central Joburg in the 70’s. Open to correction, I believe he made some money selling false teeth in London but he was dyslexic; he really battled to read and write. However, he managed to become the discount king of South Africa when discounts were “unpopular” and Factor’s Discounters was a beautiful building in Pritchard Street, if I recall. The point is, Tony had an idea and all the skill to drive it home despite his inability to read or write properly. You see, entrepreneurs are not brilliant, they just know what they can do, what they can’t do and what they must do. If one of those things are missing and you can afford to ‘buy it in”, stay in your day-job, please. One of the rules from Tom Peter’s Thriving on Chaos fame was “stick to your knitting” i.e. do anything as long as it was somewhere in your skill set. I’ll never forget buying RMD Meats though – I could braai so I bought a meat factory – crazy but true. Suffice to say, we knew how to run a business, knew a little about Retail and making customers happy but did we sweat learning about all kinds of meat – cutting a Fillet into 200ml steaks and hiding the “tail” in the batch of “eyes” and then vacuum-packing and labeling every packet before sending them out to restaurants across Gauteng. I loved the time for learning something completely different, but if you want to “buy a butcher”, beware! As another example, we have a restaurant in town that was built and owned by two locals who are very well known and brilliant at what they do. Sadly, they have just sold to new out-of-town owners and I would wager they will not last 6 months. Going into winter and losing the turnover of friends of the sellers is going to cost them dearly; I really hope not for their sake. To summarise, a good idea, needs to be thought through and then driven to success otherwise it and I will not be entrepreneurial.
I think we all understand profit. That lovely stuff when you have sold lots at the right margin and everybody has been ready, willing and able to pay you on time. The experts may say that I’m mixing up profits and cash flow, but until you’ve invested your own money in a business, you won’t understand how the two become one continuous cycle in your head. Like the picture of the little guy sitting on his potty, the jobs not over ‘til the paperwork’s done. However, there is one type of entrepreneur that I really do admire these days and that is the Social entrepreneur. Many kinds of business abound like the guy in Somerset West who produces a “dry powder shower”. Fascinating but very necessary when you consider being in a drought for 6 years in Southerland. Another lady I read of is making handbags from tea bags and exporting her art-bags overseas. How many more – all plastic recycling, a social worker building shacks, bee-keeping, bamboo clothing – are out there making profit by being good to the environment and her people? What an amazing achievement by people who are pulling themselves up by their own bootstraps!
So what does it take to be an entrepreneur? Here are some thoughts without repeating those above:
- A great idea or the drive to be better than the competition.
- Vision. Begin with the end in mind; you’ll need to in times of “why did I do this”?
- Never-give-up spirit.
- Funding. Or a carefully crafted business plan for funders. If you can’t encapsulate it, you can’t expect anyone to give you money.
- Support. Friends, business colleagues and professionals; most come at a price but all are needed from time to time.
- Business acumen. Making profit is not making money, collecting cash and more debtors than expenses and creditors, is.
- Being prepared to start small and grow. Ego has no place in entrepreneurialism; it may get you in but it can also terminate you if allowed to dominate your business.
- Others. Partners, if you have, and people who trust you to deliver. People will jump with you if you have a plan with a vision and medicine-fills of enthusiasm. People are willing to follow visionary leaders.
- Risk management. You’ll need it an hour after risk-taking.
- Un-burnt bridges. I know your boss may have peeved you but the world is small. Become an entrepreneur with a forward-looking motive rather than an “I can’t wait to get out of here” attitude. Of course many people have done so, and probably my best example was Bill Venter, the founder of Altron and Powertech. The latter company, if my memory serves me correctly, he told his boss he would buy “one day” and he did. But I think they’re few and far between and in any case, why not be happy and positive while you’re working hard to succeed?
And by the way, Intrepreneurs do all of this in the context of their work. Right at work, fresh ideas implemented are driving bosses to realize the gems they have behind the desks in their offices. That symbiosis of real recognition for really good effort is occurring every day. If not, the boss may realize money talks but talent walks.
If ever there was an entrepreneur that I admire, he’s Vincent. As I’ve shared before, he joined BondExcel 2 weeks before I left Nedbank, survived sub-Prime on a farm breeding puppies [which he no longer does!!], re-built the Homeloan Junction business off a nearly zero-base and then started his Vape Junction. Unassuming, but a risk-taker of note. Humble yet efficient, he is people-centered to the point of care beyond the call of duty and sometimes to the point that it hurts. So, when we say “talk to us” it’s not because we think we’re cool know-it-all’s but rather that along the way of business life, we’ve learnt a few lessons that you don’t need to endure if you just ask.
“I’m not saying that you shouldn’t focus while you’re running a business but you should have that radar system that is able to capture different possible futures and when they start occurring against expectations, that you have the ability to adapt.”