5 lessons from 5 entrepreneurs who found success by going against the grain

Find out why creating a personality for the business and building great customer relationships are key to making it in a niche business


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Many people, when considering starting a business, often fall into the temptation of pursuing markets in the usual, tried and tested sectors and often, the saturated market means they go up against stiff competition from incumbents who not only understand the market better but have managed to establish their brands in the minds of the customers.

However, going the unusual route can sometimes open up new markets turning your small startup into that sector's big player.

"The most successful artisan businesses succeed by finding a niche, creating a personality for the business and building great customer relationships," says Steven Cohen Head of Sage One International (Africa, Australia, Middle East and Asia).

How these businesses become successful is a matter of having a well thought out strategy about how to grow and scale a business that is based on the values of handcrafted care and the personal touch, Cohen says.

From local artisanal business Dope Donuts to Cape Coffee Beans, an online coffee lovers' paradise the trend has tended towards a narrow focus and trying to dominate a market segment, rather than competing with established brands in the overall market, according to marketing company Think Patented.

Cohen adds, "What's more, it's important to look at how you will earn a healthy margin off goods that will be more expensive to make or source than the mass-produced alternatives. How do you balance quality and price to ensure profitability? How do you keep people coming back, even if you're not the cheapest supplier on the block?"

Traditional business disciplines such as tight inventory management, market research, hard-hitting sales and good customer relationship management are all key to success, he says.

5 startups who took the road less traveled, exploring niche markets in unusual industries … and are making a success of it ... share with us their tips on how to find the 'riches in the niches'.

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Jason Sandell and Diana Chavarro, Las Paletas.

1. In any industry cash is still king
"Cash flow when we started was very tight, but by dealing with people who love our brand we are able to ensure timeous payments and re-orders. By developing relationships with our suppliers meant they gave us terms easing our cash flow problems. Also, starting to retail our products in the bigger chains like Pick ‘n Pay and Spar throughout the Western Cape area was another challenge." - Jason Sandell and Diana Chavarro, founding directors of Las Paletas

Husband and wife duo, Jason Sandell and Diana Chavarro founded Las Paletas in 2012. They manufacture artisanal lollies (gourmet ice cream on a stick). More here

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Amy de Castro, Bamboo Revolution.

2. Leverage off your networks
"I realized that it wasn't about the R50, but about the networks we had access to. Making use of our networks, combined with a good dose of persistence, we raised startup capital. We secured a sponsorship from a local coffee brand and raised R21 000 in just two days." - Amy de Castro founder of Bamboo Revolution

De Castro founded her company three years ago at the age of 22 following a university challenge to start a business with just R50. She now sells her bamboo wristwatches to fashion-conscious consumers across the globe including Denmark, Germany, Iceland, Portugal, Spain, Australia and the United Kingdom. More here

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Nic Haralambous, Nic Harry.

3. Don't rush to go global, get the basics right
"The key thing is that successful businesses don't need to be global to be successful. You should build locally and when you have the cash-flow and the capital you can expand. So don't rush is my thing about building a global business. Do your product research, do your research and development, figure out what market works for you, how your shipping costs work on that product, what the import/export levies are on your products, because some things get taxed heavier than others. And then if you want to do it, do it," - Nic Haralambous - founder of Nic Harry

Techpreneur, Haralambous has built a total of 10 businesses in his career. He now leads niche e-commerce business, Nic Harry, a luxury men's socks and accessory company that delivers to over 20 global destinations. More here

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Elise Suckerman, Dope Donuts.

4. Go all out for your customers
"I strongly believe that every single customer that buys one of my doughnuts deserves to be appreciated. I can't solely rely on my product carrying the business and I ensure that whoever spends their hard earned cash on Dope Donuts, feels that they have spent it well." - Elise Suckerman Dope Donuts owner

Elise Suckerman, who told SME South Africa in an earlier interview that she believes South Africa is moving away from mass produced products, founded her artisinal doughnut startup, Dope Donuts, three years ago. More here

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Phaedon Gourtsoyannis, Cape Coffee Beans.

5. Just do it
"I think the biggest hurdle for anyone starting a business is psychological. Once you start moving, excitement and adrenaline will pave the way. There are plenty of other hurdles that come up later but I think the one you have to jump over initially is to stop thinking and start doing," - Phaedon Gourtsoyannis founder of Cape Coffee Beans

Cape Town-based, entrepreneur Phaedon Gourtsoyannis founded his startup, Cape Coffee Beans, an online coffee lovers' paradise where they sell locally made coffee made by some of SA's best artisanal roasters. More here

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