What I learnt in business


What I learnt in business

This month, ALI VAN WYK is leaving the management of the small company he joined seven years ago with no experience. Here's what he learned.


I RESIGNED as a magazine editor in September 2017 with few future plans. The only meagre income we had was a year-old second-hand backyard furniture business with a monthly turnover of R20,000. I joined my wife to help build the business. The profit was barely enough to cover one child's monthly school fees.

My qualifications are in languages ​​and I had no business experience. As an editor, I had to sit in meetings where I at least had to understand an income statement, but anyone who can read a Chappies wrapper can understand an income statement after five minutes.

Some people said I was brave, others thought I was naive and stupid (and only said that later, when we didn't immediately go under). But I was neither brave nor naive. My career was at a dead end and I experienced the environment as hostile. I was more like a drowning man washed up on an island.

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I also had few illusions about the company's chances of success, but that was all we had. We knew there was a good profit margin for the kind of furniture we sold and that if we could produce 10 times more, it would sell. I also knew that intelligent and talented people who think unconventionally can produce surprising results and that adversity gets you focused and in gear.

Six years later, the business and its brand have been established, it is humbly profitable and there are enough systems in place so that I can leave it to diversify our income.

Here are the perceptions of a rookie.

It was harder than I thought. It's one thing to do a few successful deals but something different altogether to build a sustainable, profitable business. It takes more focus, energy, perseverance and sacrifices than I could have imagined beforehand. Your vacations and trips are drastically curtailed. Nobody pays you a holiday bonus around Christmas, in fact most businesses have less money in December.

Our timing was terrible. Nobody can predict the future but 2017 was a particularly bad time to start a business. South Africa's economy never really recovered from the 2009 financial crisis, a recession hit us in 2019 (and almost in 2023), the devastation of Covid and the lockdown followed in 2020, and power cuts only got worse. Last year was a nightmare for small businesses, with several stage 6 electricity outages, a devastating taxi strike in the Cape and fuel prices flying through the roof. If you survived all that, you will probably be fine in most situations.

You can still trust 99.99% of ordinary people. Due to corruption and our high crime rates, most people believe South Africa's basic moral fabric is in tatters. However, we have bought furniture from more than 1,000  people advertising on Facebook Marketplace and Gumtree and paid many of them without initially seeing them to reserve the piece. In six years we have been cheated only once, by a villain on the East Rand who made off with R1,700. If I had been more alert, I could have foiled him too. These were people from all walks of life and all communities, from Welgemoed to Grassy Park.

It does not help to resist the state. Don't even try to avoid taxes. The South African Revenue Service is ruthless and you are powerless. It's initially demanding and frustrating to waltz with Sars, especially if you register for VAT, but with the right bookkeeper it becomes manageable. If you miss the deadline for a payment by 10 seconds, you are fined 10% of the amount and interest starts escalating at 10%. No mercy.

The same applies to all other statutory organisations, such as the inspectors of the Department of Labour or the labour bargaining councils. Remember that the inspectors are also just ordinary people who often want to help. The Furniture Council of the Western Cape inspectors, who I initially resented, finally helped me to resolve our workers' pension and holiday bonuses simply and easily.

Don't resist technology. Yes, everyone knows a rich uncle who runs an extensive real estate network from a small hardcover book, but for most of us it's better to keep a close eye on technology that can help in your business. Artificial intelligence is much more than just a way to entertain your mates. If you can learn to give the right commands to AI programs, you will, for example, be able to solve unique workflow problems in your company by instructing AI to write plug-ins that reconcile the various programs and systems you use. This can save endless time and money. Big software developers only focus on expensive applications for large enterprises.

Easy money never lasts. One thing that works well in capitalism is that alert entrepreneurs will quickly become aware if you make easy money. They will copy your idea and some of them will eventually become better at it than you. It's like water flowing to lower areas. If you have patents on sophisticated chemical formulas or technological components, you are somewhat protected, but most businesses have a simple blueprint that can be copied relatively easily. One of the strongest characteristics of successful entrepreneurs is that they can focus relentlessly on new ideas about things or services that people will need or want next.

If your people are happy, things are much better. It has become a cliché to say success depends on investing in your people. Very few employers actually do this because it is so difficult. No one prepares you for how challenging it is for a small business to pay good salaries, invest in thorough training, give people proper time off, make the work environment humane and nurturing, and still make a profit. You must first build a successful enterprise from the ground up before you will understand how valuable good employers are. One wishes our government would realise this.

Targets work. I have no doubt that in the months when we did not set weekly targets in our business — especially for sales, but also for purchases and work in the workshop — we did significantly worse. It's almost as if targets work on an unconscious level, because even if you don't think about them on a daily basis, they have an influence. I think people feel safer and calmer when their work is clearly delineated now and then, because they understand their responsibility and are more productive. The same applies to annual budgets. Do them properly, even if you don't enjoy the process.

If you need something, you can probably find it within 5km. I was astounded to discover how we were surrounded by skills and products in a light industrial area. From Parow East we rarely had to look further than 5km for help or suppliers. We had a choice of powder coaters, glass suppliers, rubber dealers with seals and all kinds of plugs and caps,  excellent hardware dealers, sponge and upholstery dealers, upholsterers, specialist woodwork dealers, fitters and turners who will supply you with special bolts and nuts, dealers in a wide variety of bolts, screws and nuts, sandpaper dealers, welders, timber importers, specialist rivet dealers, logistics companies, and I could go on. And then also people's interest in what you do and their eagerness to help. Here and there you will find someone who makes it clear from the start that he is here to make money and you shouldn't waste his time. But in general, people are more interested in what you do than in wanting to make a penny or two. It often surprises me how business is really about people and that it's just another way to hang out.

The younger the better. That's a simple fact. Once you're in your late 40s with three kids in school, a mortgage and hefty subscriptions to streaming services and software programs, you're no longer as stupid and brave as you were when you were 25. You've got too much to lose. You become risk-averse. The chance of your business folding becomes slimmer, but so does your probability of making big money, because big profits necessarily go hand in hand with big risk. If you are convinced that you want to become an entrepreneur, do it as soon as possible. It's better to have three flops in your 20s, learn a lot of lessons and achieve great success in your 30s, than to try for the first time in your 40s.

It's a wonderful adventure. Building a business is not a clinical affair. There's a lot of creativity involved. It's like building a puzzle when you only get some of the pieces and  have to produce the rest yourself. The puzzle is never fully completed but it remains a game. As soon as you think you have completed the puzzle, your fresh success opens up a lot of new problems. Every time I ask an experienced entrepreneur when it gets easier, they reply with a dry laugh: “Never."

♦ VWB ♦

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