LESSONS FROM NHLANHLA DLAMINI
After over five years at McKinsey & Company, Nhlanhla Dlamini quit his job to start his own agri-processing business. Rather than taking on the dominant players in the sector, his company identifies gaps in the market and then partners with those big comp
armed with an MPhil in Development Studies from Oxford University, an MBA from Harvard Business School and a wealth of experience from global management consulting firm McKinsey & Company, both locally and internationally, Soweto born and bred entrepreneur Nhlanhla Dlamini decided to leave his job as a consultant to try and start his own businesses. Through his Maneli Group, Dlamini hopes to create business opportunities in South Africa’s agricultural sector through operating in areas of the industry that big business tends to overlook.
What does Maneli Group do?
Maneli Group is a 100% black- owned company that looks for opportunities to build and expand businesses in the food and agricultural sector. We have two subsidiaries, Maneli Pets and Maneli Commodities. Maneli Pets, created six months ago, manufactures pet foods using game and ostrich by- products. We plan to start exporting these products to a wholesaler in the US towards August. We have two factories, one in the Western Cape and another in Gauteng. We collect raw materials from abattoirs and manufacture the pet foods. The packaged finished product is being piloted in the US and mass production will commence in August 2016. Maneli Commodities is a grain trading business, one of the first majority black-owned grain trading businesses in SA. We sell soft commodities like maize, sugar, wheat and soya to large food companies in SA. Maneli Commodities aggregates raw materials for big food companies that do not want to source raw materials from small farmers or co-operatives. They would rather deal with a company like us, aggregate raw materials from across the country, manage quality and deliver to clients as per their production needs.
What did you do prior to starting your own business?
I grew up in Soweto and went to school in Johannesburg. I graduated with a Bachelor of Commerce from Wits University, then went on to do a Postgraduate Diploma in Management at the Wits Business School (both cum laude and top of my class). I joined McKinsey & Company in 2006, and worked for them in South Africa, Europe and in the US. Following the completion of my MBA in 2012, I came back to SA, still with McKinsey, where I stayed until April 2015.
Where did you get seed capital to start the business?
I used a combination of savings I accumulated while working and some initial start-up capital from small business incubator and SMME investment company, the Awethu Project. Awethu plays in a very unique and important space because it invests in entrepreneurs before most formal institutions would like to get involved. For one of the Maneli subsidiaries, I had to bring in co-investors to augment Awethu’s seed capital. In SA the venture capital industry is still quite thin (especially outside of the tech space) unlike Europe and the US. Entrepreneurship is tough for everyone, but I think to a certain degree it’s tougher for young black people. We don’t have a strong network of older black entrepreneurs who have already made it and are now the “Godfathers”, so to speak, or angel investors for the younger entrepreneurs coming through. I’m trying to build my network and I hope to play that role for other people in a couple of years.
How has t he one- year j ourney in entrepreneurship been?
It’s a roller coaster. If you’re not one for highs and lows then entrepreneurship is not for you. The lows are definitely more accentuated than you would find in corporate and, conversely, the highs are highly rewarding. But there’s never been a month where I found myself thinking that I was on the wrong path. I’m working with something that aligns with my purpose, and at the same time I’m making a bigger difference than I would under the employment of someone else.
What have been the biggest difficulties you’ve had to overcome?
In no particular order, I’d say it was difficult becoming everything and fulfilling every role in the business. I started the business on my own and built capacity as I went along, but initially I had to multi-task as the marketing, finance, operations and admin person, which is different from corporate where there is specialisation within the team. I also had to learn to manage my reaction to events. There were weeks when I felt like I had cracked it and could be making money the following week, but then something would happen the next day to nullify what I thought would bring in money. Resilience is a virtue in most industries, but even more so in entrepreneurship because plans can go a little slower than initially anticipated. You need to be confident that your plan i s going to work. If you aren’t confident, trying to sell it to funders, employees and partners becomes impossible.
Biggest lesson learnt?
You need to bring in partners and have a team around you that can help share the load. In the beginning it will come at a cost because you don’t have a lot of money to go around. You need hands-on experience with managing money. Your grasp of cash flow and numbers and projecting where the company will be in three to six months’ time, is the lifeblood of the company. And I’m more aware that bad financial management can put your company in jeopardy, so that skill I’ve had to hone a lot more. Becoming a salesperson is a skill I didn’t get to practise much while growing up, but it’s an important skill to have when trying to convince industry bodies, employees and funders to buy into a business concept or idea.
Resilience is a virtue in most industries, but even more so in entrepreneurship because plans can go a little slower than initially anticipated.
How tough is competition in your sector, and what differentiates your product/ service from others?
The competition in the South African industrial sector is extremely tough. It’s dominated by large companies with deeper pockets, stronger relationships, and they can be hostile to new entrants. Taking them on is not advised and I have not tried to do that. My strategy is to partner with them to get into areas they may not be giving enough attention. Or serving where I think I can do very well and make decent money and decent margins.
Right now I’m lucky in that there’s a need for the industry to be transformative, so it is more receptive to smaller or new partners coming on board. Since I had wanted to venture into entrepreneurship for a while, I read a lot about companies that make it and ones that don’t make it and often the companies that don’t make it are the ones that tried to take on the big businesses, so I decided not to follow that path.
How many people do you currently employ?
At the Maneli Group in Johannesburg there’s three of us. Maneli Commodities will be employing about 10 people in the next four months. And Maneli Pets will be employing about 30 to 40 people by the end of the year.
What is the best business advice you’ve ever received?
In food manufacturing, cash is king. You can have great ideas, but if you do not have the cash the lifeblood of the company is compromised. Also: The elements that make up a successful business are a good idea, plus a good plan and team and rigorous implementation.
What was unexpected?
People are the most unpredictable variable. People’s sentiments often change, which then affects their motivations and behaviours. Or there are changes in their lives and your project is no longer a big priority; so often it’s navigating changes in people. I really enjoy working with people nonetheless. Beyond people, entrepreneurship in general comes with a lot of curve balls and uncertainty. I always leave 20% to 30% slack in my schedule every week for unexpected events that inevitably occur.
How do you stay motivated?
I take time out to refresh, not as much as I should, but I try to exercise or play sports four times a week. And I have a strong circle of family and friends. I’m present and engaged in their lives. It’s important that I have a job that is a means of supporting them too. I feel privileged and also have a great sense of responsibility for what I’m meant to do in the time that I’m here and I never want to feel like I wasted a month or a year not being as productive as I could have been.
What are your non-work habits that help you with your work-life balance?
I love sports. I try to put in three to six hours of exercise or sports per week. I try and learn something new every week, even if it’s something trivial, by reading, listening to podcasts or hanging out with people that I wouldn’t normally hang out with. I enjoy travelling, but it’s a bit tough with where the rand is at the moment. But travelling has proven valuable because it gives you a fresh perspective of your country and culture.
How would you measure success for the group?
The hard metrics should be around the company’s performance i n terms of the revenue and profits, and our resources and reserves for future growth, among other things. Going forward, I’d like to segue into related industries like green energy in about five years’ time. Fast-forward 10 years or so: I have aspirations for us to be the largest blackowned industrial company.
In food manufacturing, cash is king. You can have great ideas, but if you do not have the cash the lifeblood of the company is compromised.
Nhlanhla Dlamini Managing director of Maleni Group