THE “HOW-TO” HANDBOOK FOR BUILDING COMPANIES JUNE 2014 SIPHIWE TSHABALALA Scoring big in business WWW.ENTREPRENEURMAG.CO.ZA THE SECRET TO SECURING REPEAT BUSINESS Betting on PAVLO PHITIDIS ON Silent killers of great businesses and how to avoid them TOMORROW’S MEGA-MONEY SPINNERS? Disgusting business ideas that could make you a fortune How Carel du Toit has built up his R55 million business PLUS: Build a Strong Sales Pipeline Securing respected global brands and buying distressed businesses That’s how Cuan Chelin built his R240 million business Creativity lessons from Pixar JUNE 2014 — ISSUE 99 R35,90 (INCL VAT) OUTSIDE RSA: R31,49 CONTENTS 06•2014 40 You can’t succeed if you don’t try You won’t always get what you wanted, but you’ll learn from each attempt, and you’ll refine your goals and focus BETTING ON WINNING BIG Canterbury, Dunlop, Slazenger and Sportingbet.co.za are just some of the brands that have built Cuan Chelin’s business empire Find out how this determined youngster from Durban has built a R240 million business from nothing ON THE COVER > 27 27 96 21 40 34 10 70 14 96 > NEXT LEVEL > ANATOMY OF Carel du Toit is a self-taught IT entrepreneur who believes that the best way to build a successful business is through ensuring repeat VDOHV 7KH UHVXOW LV D KLJKO\ SURÀWDEOH EXVLQHVV with a R55 million turnover Siphiwe Tshabalala might be remembered for scoring the 55th minute goal against Mexico in the 2010 FIFA World Cup, but today he’s making waves in the business world We take a look at what motivates this soccer-turned-business star J U N E E N T R E P R E N E U R M AG CO Z A CONTENTS 63 13 92 > CARVING OUT TIME FOR IDEAS > THE KING OF COOL > THE INSIDE TRACK ON FRANCHISING Marketing guru Mandi Fine on why you QHHG WR ÀQG WKH WLPH WR KDYH JUHDW EXVLQHVV ideas – for you and your team Mongezi Mtati’s start-up is making waves and getting noticed, thanks to his belief that you need to remember to be your own best client The Jimmy’s Killer brand is well-loved by many South Africans Find out how it’s evolved and remained competitive in a tough industry with spiralling costs Q SMARTS 66 Start-up Diary How local entrepreneur Liza Clifford drew international coach Brad Sugars’ attention 68 Prototyping 69 Lessons Learnt Lebogang Mokubela’s start-up journey and top tips for earlystage entrepreneurs 70 13 14 15 Work Smarter Zen Habits Goals Q TACTICS 19 21 22 24 Snapshot Bridget Scarr on attracting international clients Coach’s Corner Customer Service Five Questions Building your own digital space Q BUILD 27 Next Level 30 Leadership 32 Growth Guru Silent business killers and how to avoid them 34 Strategy 36 Master Class > TOMORROW’S MEGA-MONEY SPINNERS As our world gets smaller, hotter and more crowded, innovative solutions to global problems could be tomorrow’s multi-billion rand industries Get in on the action today Q SPECIAL FEATURE 47 Executive Travel Making the most of business travel 57 Accounting and Payroll How solid accounting and payroll foundations lead to a better — and more profitable — business Q LAUNCHPAD 63 Bright Idea Mongezi Mtati’s hot marketing moves 65 My Mentor E N T R E P R E N E U R M AG CO Z A J U N E IDEAS CENTRE 70 Industry Insights Tomorrow’s megamoney spinners 72 Social Innovation 73 Next Wave Q FRANCHISE ZONE 76 78 82 86 92 International Concept Performance Criteria Insight Update Inside Track Q ANATOMY OF… 96 Siphiwe Tshabalala on moving from soccer stardom to business success IN EVERY ISSUE > 06 Contact Us 10 First Word 38 Subscribe PUBLISHING CREDITS EDITORIAL PUBLISHER Andrew Honey DIRECTOR: PRINT & DIGITAL Nicole Honey MANAGING EDITOR: EMSA Nadine Todd DEPUTY EDITOR: Tracy-Lee Nicol COPY EDITOR Lesley Lambert WRITERS Monique Verduyn, Nadine Todd and Tracy-Lee Nicol WEBMASTER AND TRAFFIC COORDINATOR Chelsea Osborne ART SENIOR ART DIRECTORS Dineo Mokgoasi, Saveer Sugreem PHOTOGRAPHERS Adrienne Weerheim, Mike Turner, Rich Townsend, and Sarah Schäfer ADVERTISING MEDIA SOLUTIONS MANAGER Alex Skea SENIOR MEDIA SOLUTIONS CONSULTANTS Jann Becker, Inez Barnard, Sanjay Kathan MEDIA SOLUTIONS CONSULTANTS JHB: Charles Hsuan, Cynthia Morgan, Hazel Jeffrey, Ilze Prins, Moses Mtheleni CAPE TOWN: Samantha Peel DIGITAL MANAGER Charles Hsuan MEDIA SOLUTIONS ASSISTANT Seipati Modise 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20, Pinegowrie, 2123 EDITORIAL SUBMISSIONS* EMAIL press@entrepreneurmag.co.za FAX +27 (0)11 789 9113 MAIL PO Box 20, Pinegowrie, 2123 * Please include your contact details The editor reserves the right to edit for space and clarity Entrepreneur and Franchise Zone are registered trademarks of Entrepreneur Media, Inc., 2445 McCabe Way, Irvine, California 926614 USA Entrepreneur (USSN 1818-7706) considers its sources reliable and verifies as much data as possible However, reporting inaccuracies can occur, consequently readers using this information so at their own risk Each business opportunity and/or investment inherently contains certain risks It is advised that prospective investors consult their attorney/s and/or financial advisor/s prior to pursuing any business opportunity or entering into any investment Entrepreneur and Franchise Zone are sold with the understanding that the publisher is not rendering legal or financial advice Although persons and companies mentioned herein are believed to be reputable, neither Entrepreneur PRINTING Media Inc, Entrepreneur Media SA (Pty) Ltd (2005/009255/07), nor any of its employees, sales Paarl Media Cape executives or contributors accept any responsibility whatsoever for such persons’ and companies’ activities © Entrepreneur Media SA (Pty) Ltd All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form without prior written permission of the Publisher Permission is only deemed valid if approval is in writing Entrepreneur and Franchise Zone buy all rights to contributions, text and images, unless previously agreed to in writing SMARTS Are You a Goal-Getter? By Scott Halford, Entrepreneur, 24 June 2010 BUILD Leadership Lies You Need to Stop Believing, By Mark Sanborn, Entrepreneur, 28 August 2013 LAUNCH PAD Why Your Customers' Cravings Are Your Key to Success, By Peter Cohan, Entrepreneur, October 2013 FRANCHISE ZONE Why it Pays Big to Be an Early Adopter in Franchising, By Jason Daley, Entrepreneur, 20 April 2014 * Setting Goals for Success, By Joe Mathews, Don DeBolt, and Deb Percival, Entrepreneur, October 2009 EXPERT CONTRIBUTORS INTERNATIONAL EXPERTS LEO BABAUTA is the author of the blog Zen Habits, which is about finding simplicity in the daily chaos of our lives It is one of the Top 25 blogs and Top 50 websites in the world PETER COHAN is president of Peter S Cohan & Associates, a management consulting and venture capital firm He is the author of Hungry Start-up Strategy and an instructor of business strategy and entrepreneurship at Babson College MARSHALL GOLDSMITH is an executive educator, coach and best-selling author of numerous books, including the New York Times bestsellers, MOJO and What Got You Here Won’t Get You There SCOTT HALFORD is a long-time consultant to Fortune 500 executive teams His brilliance in focusing on the strategy and application of behavioural brain-based concepts which distinguishes his work and gains praise from executives around the world JOE MATHEWS has 20 years’ experience in franchising, including management roles with Subway, Blimpie, Motophoto, The Entrepreneur’s Source and other US-based national chains He is co-author of Street Smart Franchising with Don Debolt and Deb Percival MARK SANBORN is an author, speaker and president of Sanborn & Associates Inc., a USbased leadership development firm He is author of eight books including the latest: Fred 2.0: New Ideas On How to Keep Delivering Extraordinary Results LOCAL EXPERTS DR CHARLENE LEW is a senior lecturer in strategic leadership decision-making at the Gordon Institute of Business Science (GIBS) DOUGLAS KRUGER is the author of 50 Ways to Position Yourself as an Expert, and coauthor of So You’re in Charge Now What? 52 Ways to Become a Better Leader His latest book is Own Your Industry ED HATTON is the owner of The Marketing Director He has co-authored an entrepreneurship textbook and has mentored SMEs for almost 20 years www.themarketingdirector.co.za HARRY WELBY-COOKE is the co-master franchisor for ActionCOACH in southern Africa and is also a certified, leading business and executive coach who assists business owners to significantly grow their profits and skills www.actioncoachsa.co.za LIZWE NKALA is a corporate veteran who is the founder of Flamingo Moon, a corporate strategy consultancy that works with blue chip clients, exploring the role of successful leaders in today’s competitive world www.flamingomoon.co.za PAVLO PHITIDIS is a director of Aurik Enterprise Development and the CEO of Aurik Business Accelerator, an organisation that works with business owners to grow their businesses into assets of value YUSUF ABRAMJEE is the head of news and current affairs at Primedia Broadcasting He also spearheads Lead SA www.leadsa.co.za JRDOV LQ RUGHU WR KHOS \RX VHW WKUHH DQG ÀYH year plans to help you achieve those goals 2YHUORRNLQJ TXDOLW\ RI OLIH JRDOV LV VHWWLQJ you up for dissatisfaction because they’re DV LPSRUWDQW DV ÀQDQFLDO JRDOV 7KH\·UH WKH reasons that compel you to get up and go WR ZRUN LQ WKH PRUQLQJ ² DQG PRQH\ LVQ·W enough for long The cold hard truth about franchisors 9LUWXDOO\ DOO IUDQFKLVRUV KDYH NH\ performance criteria that help you and the franchisor determine whether or not your business is winning You’ll be taught how WR WUDFN VDOHV ODERXU FRVWV FRVW RI VDOHV DQG other measures Franchisors design their 78 E N T R E P R E N E U R M AG CO Z A J U N E business and support systems to help you structure your business to achieve these measures and monitor results +RZHYHU ZH NQRZ RI QR IUDQFKLVRU ZKR measures how many meals you’ve eaten ZLWK \RXU FKLOGUHQ RU KRZ PDQ\ RI WKH NLGV· soccer games you’ve attended Franchisors PHDVXUH \RXU VXFFHVV E\ WKHLU GHÀQLWLRQ QRW \RXUV 0RVW IUDQFKLVRUV KDYH QR FOXH DV WR whether or not their ‘successful’ franchisees are living the life they originally desired when they invested in a franchise 7R VHFXUH EDQN ÀQDQFLQJ \RX·OO QHHG WR write a business plan in which you detail the tactics and strategies you’ll execute to drive the sales, contain the costs, maximise the cash ÁRZ RI \RXU EXVLQHVV DQG UHSD\ \RXU ORDQ Imagine that money is tight and you are two months late on loan payments or IUDQFKLVRU IHHV 7KH ORDQ RFHU RU IUDQFKLVRU won’t want to hear that you don’t have the money to pay the instalments, but you did DWWHQG DOO \RXU NLG·V VRFFHU JDPHV How ‘success’ helps you choose a franchise brand /LNH WKH EDQN WKH IUDQFKLVRU DOVR ZDQWV LWV PRQH\ RQ WLPH LW·V MXVW WKH ZD\ LW LV 6R \RX ZDQW \RXU GHÀQLWLRQ RQ VXFFHVV WKH IUDQFKLVRU ZDQWV WKHLUV WKH EDQN ZDQWV theirs, and the world turns It’s solely your UHVSRQVLELOLW\ WR FUHDWH D FOHDU GHÀQLWLRQ RI ZKDW ZLQQLQJ ORRNV OLNH IRU \RX 8VH \RXU GHÀQLWLRQ DV \RXU FULWHULD WR FRPSDUH YDULRXV franchise opportunities The franchise where you have the highest probability of attaining ERWK \RXU ÀQDQFLDO DQG TXDOLW\ RI OLIH JRDOV LV WKH IUDQFKLVH \RX PDNH DQ LQYHVWPHQW LQ Readers are advised to consult their attorney and/or financial advisor prior to pursuing any investment FRANCHISE TALK SIMONE COOPER is head of Franchising and Enterprise Development at Standard Bank She’s passionate about leadership, business strategy and efficiency Get S.M.A.R.T CLEAR GOALS, whether financial or quality of life in nature, must pass the S.M.A.R.T test Once you’ve got this in order it will greatly simplify your search for a franchise opportunity by narrowing the playing field Specific Goals need to be clearly articulated and written down “Making a lot of money” isn’t specific, but making R2 million is “Having more control over time” is not specific, but “going to ten of my son’s soccer games this year” is Measurable You have to be able to create a tracking system to keep score This lets you know whether you’re on track or have hit your goals If your goal is to make R200 000 by the end of the year, on 30 June, you should be half way or you’re not on track By 31 December, you either hit or miss your income goals and it isn’t open to interpretation Similarly, if you attend 11 soccer games, you won If you only went to six, you fell short Attainable Goals must be both possible and worthwhile pursuits, or you won’t be motivated to achieve them If your goal is to make R1 million a year, but you’ve never made more than R100 000 a year, you may not see this goal as possible and won’t take aggressive steps toward achieving it As a franchisee you may experience a 20% increase in sales, but if you think it’s going to take working 90 to 100 hours a week to achieve it, you may not consider it worthwhile Realistic Timetable Goals have to have a deadline to inspire commitment It’s human nature not to take action for things without a deadline How long have you thought about starting a franchise? Have you set a deadline to open one? Without deadlines, urgent matters will take precedent and your dream will be pushed further and further back EM This article was excerpted from Street Smart Franchising by Joe Matthews, Don DeBolt & Deb Percival © Entrepreneur Media Inc All rights reserved WAYS OF FINANCING A FRANCHISE Understanding finance products to better suit your needs When you want to invest in a franchise, one of the first questions is, “How much is it?” Most established franchisors can give an exact, turnkey figure, and for many prospective franchisees this is a large sum of money that will require finance Before seeking finance, it’s essential you have the required unencumbered capital This isn’t just a measure of franchisee commitment, but ensures the gearing is right for your business Banks and franchisors are strict on this The right finance for the right purpose Next, it’s important to understand the kinds of finance available and the functions they serve so that you have the right finance product for your needs • An overdraft facility is ideal for managing cash flow It’s linked to your Business Current Account and you can use as much as you need up to a preagreed limit • Medium Term Loans are paid off in monthly instalments over two to seven years and are most suited to capital expenses • Vehicle Asset Finance provides funding for vehicles and moveable assets like printing machinery, computer networks and mainframes, and equipment storage, to name just some • Property Finance caters for long-term, flexible finance for the purchase, construction and refurbishment of commercial or industrial property and buildings If you need more information on kinds of finance you’ll need for your franchise, contact Standard Bank’s franchise team for expert advice Contact franchising@standardbank.co.za Tweet Comments: @Entrepreneur_SA #StandardBank Readers are advised to consult their attorney and/or financial advisor prior to pursuing any investment FRANCHISE ZONE INSIGHT First-mover advantage Why it pays big to be an early adopter in franchising By Jason Daley, edited by Tracy-Lee Nicol Being first to invest in a promising new concept has benefits, but tread with care %XW QRW KDYLQJ DOO WKH GHWDLOV ZRUNHG RXW JLYHV \RX WKH RSSRUWXQLW\ WR EH PRUH LQYROYHG LQ UHÀQLQJ WKH FRQFHSW IURP ZDOO ÀQLVKHV WR RSHUDWLRQV %\ FRQVXOWLQJ ZLWK KHDG RFH \RX·UH LQ D SRVLWLRQ WR ORRN at something on paper and say that LW PLJKW QRW ZRUN ZHOO