How I started my own diamond business at 22
Inside the chambers of the Gordon Institute of Business Science in Illovo, Johannesburg, a group of 15 young entrepreneurs sit with all their attention focused on a lecture being given on “pricing and forecasting”. It’s the second last day of the two-weeks-long SAB Kickstart Bootcamp, a youth entrepreneurship development programme. Now in its 19th year, the programme is the go-to place for young entrepreneurs looking to hone their business skills to take their companies to the next level.
Every year only 60 entrants make the cut. The entrepreneurs are from all walks of life with varying business ideas. Popular ideas range from events catering and film and TV productions to livestock farming and waste management solutions. However, one youngster is hoping his unique idea will make him stand out.
‘Work on your business not in it’
28-year-old De Wet Tshonto is the co-owner of a diamond cutting and polishing business, Borobalo Cooperative. Tshonto established Borobalo with six of his colleagues in the North West.
From his bootcamp experience Tshonto says the experience he has gained has been crucial to his “personal development” and his business journey.
DE WET TSHONTO PRESENTING AT THE SAB
“I learned developing strategies, to be innovative and how to interpret financial statements. I also learned to market, sell and negotiate for a product, how to do business model canvas, and to create better operation systems,” he says.
“But the biggest lesson I learned is that you must work on your business not in your business for it to grow,” he adds.
“We encountered funders who told us that our project was high-risk and that it needed a lot of capital to begin with”
Identifying the gap in the market
Tshonto’s says his journey has been characterised by both humble beginnings and public pessimism. He says what motivated him to enter the diamond industry was seeing precious gems extracted in his backyard in Wolmaransstad, a mining town in the North West.
He first identified a business opportunity when he realised that because of a lack of local diamond polishers, many of the small-scale miners in the area were travelling to Johannesburg for polishing.
“The miners polish their diamonds in Johannesburg and they paid high prices for importing polished diamonds from big brands even though they are mined here in South Africa,” Tshonto said.
The R3,5 million startup fund
Starting a precious stones business was never going to be easy for a young black and unskilled township boy. Tshonto says investors were initially reluctant to fund the project and didn’t have faith that he could be entrusted with the R3 million start-up capital necessary to set up the business.
“We encountered funders who told us that our project was high-risk and that it needed a lot of capital to begin with,” he said. “We also didn’t have accredited diamond training, trading licences, and we lacked experience.”
This encouraged Tshonto to bootstrap some funds and enroll at the Harry Oppenheimer Diamond Training School in Johannesburg in 2007 where he completed a basic course in rough diamond evaluation. It’s here where he would meet his business partners and his entrepreneurial seeds started germinating.
The partners formed a cooperative a year later and received a R3, 5 million grant from the North West Department of Economic Development in 2012, which they used to purchase machinery and provide security installations for the cooperative.
“We just don’t sell diamonds, we sell the experience”
A unique business model
Borobalo Cooperative buys rough diamonds from local licensed miners, the local diamond tender house and from the state diamond trader. The diamond is the cut and polished and sold to jewellery manufacturers and to affluent private clients.
“When I see a diamond I see money. I want to own a mine, a diamond mine.”
Tshontso is now a qualified rough diamond evaluator, diamond polisher, and a GIA lab grader of polished diamonds. His responsibilities as chairman vary from buying rough diamonds, polishing and selling the finished product.
But this young man reckons it is their unique business model that sets them apart from the rest of other diamond cutters.
“We pride ourselves by giving our clients an experience as we take them through the planning and polishing process and teach them a little about what they are buying,” Tshonto says. “We just don’t sell diamonds. We sell the experience, the symbol of love.”
Tshonto says this creates an everlasting memory in the minds, hearts and souls of their clients.
“Big retailers don’t sell diamonds. They just sell a brand.”
“My vision is to reduce unemployment and poverty among the youth in my community and also to beneficiate our minerals in our town and country”
The cooperative’s vision
Tshonto says his vision for Borobalo is to grow into compliant business which is adequately resourced and able to reach clients within South Africa and beyond.
“My vision is to reduce unemployment and poverty among the youth in my community and also to beneficiate our minerals in our town and country.”
Asked what advice he had for youngsters wishing to make it in the mining industry, Tshonto had a mouthful to say about political, economic, social and technological aspects that need consideration for one to succeed.
“We sell a luxury product,” he said. “So one needs to consider how the regional political climate affects business, the impact that consumers’ income levels have on demand, current trends, consumer lifestyles and technology’s influence on consumer information and distribution channels.”
The bootcamp came to an end at the weekend and the 60 entrepreneurs left, including Tshonto who is returning to Wolmaransstad. Despite the hard work and long hours at the bootcamp he says he has renewed energy and looks forward to injecting some of it into his business.
Video: Borobalo Cooperative members, led by De Wet Tshonto, showcase their business and how it is impacting their community in Wolmaransstad. [Courtesy of SABC News]
Image: Courtesy of The Diamond Works Institute www.thediamondworks.co.za