five tips for entrepreneurs
What drives you? Initially I was driven largely by wealth, but now it’s about seeing the success of other people in the organisation, passing on my skills, and seeing the business thrive. Bidvest has a strong and happy spirit.
Do you have to be an optimist to be an entrepreneur? You have to see the optimistic side of pessimistic views. The biggest wealth creation opportunities are where most people see the negatives.
What were the toughest times and how did you get through them? We’ve had few difficult times, but 1987 was particularly hard. But we’ve had reasonably good times. In 25 years Bidvest has grown in all but one year.
What would your top five pieces of advice be for budding entrepreneurs? Don’t get bogged down by too much information and advice. The second thing is to be able to differentiate between profit and making money. Profit is an accounting term, which is the difference between sales and costs; making money is the generation of cash. Making a return is absolutely fundamental. Attention to detail is extremely important. And you have to work hard.
What would you advise entrepreneurs not to do? It’s not about winning or losing. It’s base-by-base, not hitting too many home runs. As a leader you have to be assertive. Be unique and differentiate yourself from the competition.
How do you choose the people around you? I prefer people who have the tomorrow vision, who are willing to make changes and work hard.
Do you have to be born an entrepreneur? You’re not necessarily born one. Obviously your heritage, your family life, and the people you associate with have a direct impact on you. But luck and circumstance make a big difference.
How do you balance being a corporate with retaining entrepreneurial spirit? It was easier years ago. What destroys entrepreneurship is too much governance. Governance issues, transparency issues, communication issues make it a lot harder now. The pendulum swung a little bit too much to the right and it will swing back but there are benefits in the public company space. The capital to grow is available to you, but there are the negatives, like having to be exposed to public scrutiny.
Do you believe in work-life balance? Yes. You can’t exercise your mind unless you have a mind that’s rested and able to exercise. There are things you need to do to optimise what you do. That doesn’t mean coming to work more often or spending more hours at work. I often tell my managers we should spend more time doing nothing. I take leave often — it gives the opportunity to find new ideas, which is critical in entrepreneurship. If you’re just doing the same thing every day, you’re a manager and managers don’t make money.
Who influenced you most? My father, who ran a small grain milling company and my uncle, who was in pharmaceuticals. I would earn pocket money by packing birdseed for my father and by counting tablets in my uncle’s pharmacy. Manny Simchowitz (the founder of the W&A Group) was also a big influence. He was a unique entrepreneur, he was an operator. He taught me the concept of return on assets employed, and he was a firm believer in people. Those fundamental values live in me and in Bidvest.
Do you read business books? No, I generally read few books but I’m not saying that’s a good thing. I don’t look for guidance in books or advisers. I have never consulted with an advisory firm. If we had to get an adviser to tell us what to do then it’s time for them to do it and us to move on.
How did you know you could do this? I didn’t. I exceeded my own expectations. I am quite shy even though I have gained a lot of confidence. People find confidence to surpass their expectations of themselves with a little bit of encouragement and one or two successes.
What did you want to be at school? I was not a good student, I preferred sport. My first choice was to be a school teacher but my mother said I wouldn’t make enough money. She wanted me to be a doctor. I tried that for about six weeks until I had to cut open my first frog. That was the day I went straight into accountancy.
If you were not doing this, what would you be doing? I’d probably be a retired schoolmaster.
What is your biggest fear? Flying. I have to take tranquillisers when I fly. There is also the fear of failure. I am also concerned by the possibility of not fully understanding all the issues that are at stake, and the responsibility of looking after 140,000 employees and their families.
Which has been the most difficult company to turn around? So far, Rennies, because it came out of Anglo American which was a very regimented corporation. There were lots of rules that needed to be unwound.
What type of businesses do you seek out to buy? We don’t want to buy perfect businesses that are in “showroom condition”. There’s isn’t much one can add to them. One of the things that drives value is growth potential. You want to be involved with a business that has a future. Our well-used internal term “Rofe for Joffe” acts as a reminder to always consider the Return on Funds Employed when making decisions.
What trait do you dislike about yourself? I can be overcompetitive.
What talent would you most like to have? I did learn to play the piano but I wasn’t particularly good. There are two things I would have loved to do but never really had much talent for: music and swimming. I was a good sportsman but not good in the water.
This is an excerpt from the book, South African Business Leaders: What Makes Them Tick, by Adele Shevel, available on Amazon.com