#FixMyBiz – You asked the questions, here are the answers
Dominique Collett, Lesiba Mooka and other industry experts take on your burning business-related questions like how to find funding for the not so run-of-the-mill startup and how to fit your business into an existing supply chain
As an entrepreneur, what are the most important issues facing your business? Given the opportunity to ask one question to any expert on any topic, what question would you ask? And what aspect of the business would you most look at?
According to the newly released National Small Business Survey by the National Small Business Chamber (NSBC), the answer would most likely be marketing and sales-related followed by funding and insufficient cash flow.
This week SME South Africa reached out to our readers and asked them to send us their questions – big or small and on any topic - and we would find for them an answer.
And they did.
Questions came in from a wide range of industries such as property and logistics to digital and foreign exchange and covered everything from funding, marketing to access to market.
We then sent those questions to leading industry experts to respond to the questions.
Here are our favourite questions and the responses from the experts.
SALES AND MARKETING
Our expert: Rick Ed is the small business mentor, trainer and advisor at Do Better Business. At age 60, Rick sold his business to a younger and more energetic management team. He now educates entrepreneurs on strategic decision making and sales. Rick Ed is also a small business mentor at The Tony Elumelu Foundation.
Mduduzi Eugene ( via Facebook)
"Hi I just started an errand service company and basically we aim to cater for domestic as well as commercial clients. Most of our advertising has been on social media, but I wanted to know where we can advertise to reach the small upcoming commercial clients. We can offer them services like attending tender briefings on their behalf and compiling documentation for them because as a new business you will not have time or adequate staff members to cover all these things."
Rick's Advice: 'No customers = no business' is so obvious yet we so often get it wrong. People don’t just buy what we are selling because we are selling it. We need to understand our prospective customers and their needs if we want them to buy what we are offering. Once we know their ‘pain points’ we will know what they need and where they are looking for solution.
That’s where we need to be with our product or service - it must solve a problem. It’s not about what we are offering, it’s about what they need.
'Fish where the fish are.' Don’t market where your prospective customers are not looking. When we know our customers well, we will know where they get their information. Does our market go to social media to find their business answers, or is that just a cheap and easy channel for us? It may be that face-to-face, word-of-mouth, emails, leaflets, conferences, or maybe promotional gifts get their attention better than a scatter-gun and a prayer approach. But we won’t know which is best if we don’t do the on-the-ground research, i.e go out and do the first-hand research ourselves.
For our business to be sustainable and successful, understanding our market's needs must not be a one-off exercise, it must be part of our marketing strategy and implementation plan.
Keep persevering, it pays off in the long run.
SALES AND MARKETING
Our expert: Kealeboga Mokolobate is Enterprise and Supplier Development (ESD) Account Manager at Lean Enterprise Acceleration Programmes. Mokolobate is the founder of A-Plus Learning, an on campus tutoring startup offering academic support services for students. She is also a postgraduate university student at the University of the Witswatersrand in Johannesburg.
!Fazil Ogle (Ops360) @Ogle_me (via Twitter)
"@SMESouthAfrica how do SME's sell a product to new clients who already have a strong supplier relationship? Get a piece of the pie."
Kealeboga's Advice: There a number of strategies that small businesses can use to integrate themselves into new supply chains and here are a few of the basics to have in place:
- You need to be extremely responsive and adaptive. For example, if this potential client requires a quote, this is something that should be sent to them within an hour or 2. The challenge is that many clients may request items at the last minute and the reality is they cannot procure from you if you are slow in your delivery of simple things
- Understand that a potential client has a strong supplier relationship. Thus to ask for another supplier to be removed is impossible. Rather start by building confidence with this client by getting the little things right, an example, point 1 above. Thus, you need to start your own relationship with the potential client and this is a step by step process, requiring a fair measure of patience. Be happy with starting with smaller jobs if necessary.
- Another helpful strategy is to ask to be on the Enterprise Development Programme of this potential client. In Enterprise Development Programmes, these companies are mandated to upskill and grow your business. This would allow you access to this potential client and if your growth is significant, you could possibly be integrated into their supply chain, as that is the intention of the B-BBEE codes of good practice: that ED beneficiaries get integrated into supply chains of the supporting company.
- Network and grow around this potential supplier. This could mean attending events that the potential client values and attends. Another strategy is to integrate yourself into the supply chain of that potential client suppliers and thus potentially be sub-contracted. This will help you to also understand the big profit and operations drivers in that industry and of that potential client.
- Another important aspect is to stop selling your product, and start selling the product that this potential client needs. In other words, reposition your product (in terms of how you sell it)to be directly suited to the needs of this potential client. This requires you to research this potential client and try get a bit of insightful into what drives some of their internal processes.
Our expert: Lesiba Mooka is the founder and CEO of Cobalt Blue Properties an all-inclusive property services firm. Mooka is a real estate entrepreneur from Mahwelereng, Mokopane in Limpopo, with an undying love for investing in different kinds of properties and helping others build a solid property portfolio of their own.
Just Lereko @LerekoMarenza (via Twitter)
"@SMESouthAfrica I'm young property developer with breakthrough challenges. How can I approach mentors for exposure to opportunities & growth."
Lesiba's Advice: For one to get a breakthrough in the property development space and be able to access finance, they would need to build a good track record of previous work that they've done in the past.
Putting together a proposal for an internship and approaching a local developer will be a good start in getting mentorship. The other way would be to approach the housing development department in your municipality and request to be an intern on any housing development project that they are working on.
In that way, one will get exposure and get an opportunity to engage with different players in the construction space, because government mostly deal with many developers on their projects.
Ricus Nieuwoudt@RicusNieuwoudt (via Twitter)
"@SMESouthAfrica #FixMyBiz I have opportunity: A Wine/Olive Farm/Conference Centre/Restaurant/RentHouse R60 Mil How do I grab it without funding.
@SMESouthAfrica #FixMyBiz It is a seldom opportunity with many income streams even media opportunities! I have a plan in head no capital!"
Lesiba's Advice: To be able to finance this type of purchase one might have to go the conventional route and approach the major banks for assistance.
However, all due diligence will be required by the banks which will include assessment of the applicants financial position and assets ownership for surety.
The reader can also approach institutions such as Business Partners to assist with the purchase, they assist small businesses purchase premises, or, be creative and crowdfund the purchase of the business.
All these methods will require prior planning on the part of the reader, in order to convince any institution they approach that they are worthy of assistance/financing. But I would advise the reader to look for a smaller and cheaper property to start with, instead of starting with a larger expensive one like this one.
Our expert: Kendel Falkson started Blank Page Communications in 2009. Blank Page Communications offers practical PR solutions in the communications industry and SMEs. Her experience spans many industries and functions from through-the-line marketing to public relations and corporate communications. Her philosophy is 'all good ideas start on a blank page, because you’ve got to start somewhere..'
AnloAccountingAnlo Accounting@AnloAccounting (via Twitter)
"@SMESouthAfrica What is the best way to market a financial accounting business online in order to stand out?"
Kendel's Advice: It really depends on who your target market is - are you targeting one man shows, SMEs, corporates or parastatals? Your target audience will always dictate the channels you choose to reach them.
Standing out from the crowd in this day and age is quite a tough task especially in the SME market. There are so many voices shouting to be heard, but are they saying the right thing? So I would say do the following:
- You need to find what makes you truly different in the market. The one thing that makes you stand out. Beware of looking at things like 'Service' as a USP (unique selling point) as this is very subjective and should be a given.
- Pay attention to what the others (in your sector) are doing and look for a GAP – maybe it’s your logo, colours, or visuals that make you stand out from the rest, your BBBEE rating, or being a female-only organisation - write a list of what is common in all competitors and who is doing things differently - and find the GAP that you fit in.
- Listen to what the market is asking for and answer those calls - do some market research amongst your clients and see what their pains are and how you can fulfil those.
- Then create a look and feel as well as tone and manner for how you want companies to see you. Remember how you look on the outside must mirror how you actually are on the inside.
With regards to online marketing - there is a lot you can do yourself but I would suggest to partner with a small digital agency who can help you reach the right people. These agencies have loads of tools to help refine where and when you should be online.
Facebook and Twitter are not necessarily the right medium for all brands – LInkedIn might be better suited to your audience. There are a number of ways you can market yourself online via FB, Twitter ads, banners ad on reputable websites that your target market reads, but there are also other ways like ‘sponsoring’ certain pages within a site for e.g the financial section of an online newspaper. Maybe testimonials are the right route for you.
Depending on the regulations around your industry you could create communities online to discuss matters specifically around your sector of the industry.
With the service industry there is nothing to touch or smell or hear – you are selling a service and people only really understand what you do and how once they have worked with you.. So FREE trial periods might be a possibility.
Our expert: Dominique Collett is a senior investment executive at Rand Merchant Investment Holdings and heads up the firm's fintech hub, AlphaCode. Her fintech startup TYME was sold to Commonwealth Bank of Australia in early 2015. She has worked throughout Africa, Russia and Turkey and was based in both Brussels and London. Dominique’s career spans both banking and management consulting.
Lenyora @lefatshe (via Twitter)
"@SMESouthAfrica #FixMyBiz I have more than 5yrs in foreign exchange so I want to do my own fx (foreign exchange) but need 100% funding and guidance."
Dominique's Advice: The foreign exchange and international money transfer industry is sizeable in South Africa and if you are looking to start a financial services business there is certainly a lot of opportunity in this vertical.
However, it is a fiercely competitive space and it is highly regulated. Any funder would need to understand what your unique value proposition would be in this crowded space and how you would compete against some of the large players.
Generally, funders are reluctant to provide 100% funding to new businesses as they want the entrepreneur to have some "skin in the game" so they would want to see some level of commitment, beyond just time and energy spent in the business. It is also important that you are also able to assemble a team around you as it is very difficult to build a financial services business as a one-man band.
Our guidance would be to develop a solid business plan, attend as many start-up events as possible to gain a wider entrepreneurial network and test your idea with as many people as possible so you can gauge how competitive your product offering would be and to understand the network of funders available.
Our expert: Fergus Ferguson is co-founder and director at M Ferguson Consulting and a business consultant at ActionCOACH, a global business coaching company. He is a certified business coach, providing help, advice, coaching and mentoring services to small and medium sized businesses and has a passion for helping businesses grow and become profitable. Fergus Ferguson was named Coach of the Year at the Business Excellence Forum in 2015.
Lebogang Nthabi Mokgosi (Facebook)
"What are the pros & cons of not having an office for my business?"
Fergus' Advice: It depends largely on the kind of business and whether you need to deal with clients on a 1-2-1 basis which requires a formal presence.
If the product or service is such that you can go to your clients to supply or render the service, then the need for an office is greatly reduced and you can operate from home which is more affordable.
However, when your time for traveling is limited or you need your clients to come to you, you need a proper premises where you can receive them, especially to be regarded as a professional or an expert in your field. You would of course pay rent and need a deposit and sign a lease agreement for a specific period of time.
Furthermore, you would need to get infrastructure installed at a premises like telephone lines, internet, furniture, branding and signage, decor and parking for your clients. This can be quite costly compared to a home office.
However, if you want to grow your business, it may be wise to invest in that infrastructure in the long run.
Our Expert: Matt Fisher is the incubator manager for New Ventures Studio, a young entrepreneur accelerator in Cape Town. New Ventures Studio is a platform that helps young entrepreneurs (16 to 35) create wealth by developing entrepreneurial skills, strategic networks and fully capitalised operational businesses.
Nyanakancesh Lwazi Nongauza (Facebook)
"According to some business experts, complementing NOT competing with already existing businesses is one of the easiest way of promoting young brands. What are the best ways of doing this for a digital media business in Africa?"
Matt's Advice: Definitely true. The major failing point of most startups is the lack of access to market, i.e. paying customers. By partnering with established companies, you can leverage their networks and reputation. Together you can increase your capabilities and the quality of your offering.
Strategically, as a digital media business you could approach players in totally different industries (e.g. law, finance) and together offer a unique package of services. Or you could approach someone already established in your industry and become a niche service provider for them, gaining experience and clients until you are ready to be on your own, for example, managing social media for a marketing agency.
ACCESS TO MARKETS
Our Expert: Sadaf Vahedna is Chief Collaborator at Seed Academy, which offers entrepreneurial training to entrepreneurs and early-stage startups.
#HRH@SirGumbi (via Twitter)
"@SMESouthAfrica I'm trying to enter into the mini/freight/logistics industry with a tyre sealant product that prevents punctures....1/2
@SMESouthAfrica how does a young entrepreneur then get a foot in the door to reach the people who have "buying powers" to get the product #Fixmybiz"
Sadaf's Advice: Firstly, the principle to penetrating most markets is the same. Talk to people from the industry.
In this case I would actually try and speak to tyre shop owners first. Again, I always recommend privately owned businesses because they are much easier to access and work with. Once you get some traction via privately owned businesses - you have a better chance of being noticed by larger corporates.
Secondly, the other advantage of starting small is that you get to test your brand positioning and price point and learn along the way. Most businesses need to tweak their product offering or business model in the first year that they start out as they learn more.
Lastly, I'd also get my friends and family to start talking about the product on social media. This just ensures that when you go and speak to a business owner who could potentially buy from you, that you have some credibility based on the number of people talking about your product.