How to make your first million
Most entrepreneurs want to be rich. Three of SA’S most successful businesspeople spill the beans on how they did it
In 2015,
Theo Baloyi launched Bathu, which has since become one of Africa’s premium sneaker brands.
He was raised in Soshanguve, Pretoria, for the first 10 years of his life, where his father worked as a male nurse, then moved to a small village called Phake, outside Hammanskraal. Upon completing matric, he relocated to Alexandra, north of Joburg, to study a Bcom in Accounting Sciences at the University of South Africa. After Baloyi graduated, he worked for PWC South Africa for two years, focussing on advisory, public sector, strategy consulting and auditing. He was temporarily transfered to the Middle East, where he spent three years working in audit management and consulting. Why did he decide to jack it all in to start his own business?
‘I’ve always been an entrepreneur at heart; I used to sell oil-based perfumes doorto-door with my best friend, Andrew, to make an extra income,’ he says. ‘I missed our weekend entrepreneurial hustles when I went to work for PWC. I remember being stuck at the Dubai International Airport for an eight-hour layover, when a retail store attracting a lot of foot traffic in the duty-free section piqued my curiosity. I was fortunate to meet the store’s owner, who sold a brand with which the French could resonate. That got me thinking about where I come from, Africa,where you’d be hardpressed to find a local sneaker brand that could match the international ones.
‘What are we, as Africans, doing to tell our stories? And how are we incorporating those narratives into products while building our value chain?
I thought. I was a sneakerhead who owned a valuable sneaker collection, but none were from Africa. As the saying goes:
“If you’re buying too much of something, why not own it?” That’s where the idea for Bathu came from.’
He explains the meaning of the word bathu (shoes) is diverse and rich. Our brand promise honours diversity and inclusion. We walk with anyone who wants to achieve great results on his or her journey.’
From his brand’s inception, Baloyi was intentional about how he wanted to build his business from the ground mechanics to the technicalities, and how he’d assemble various components to build its value chain, in the absence of a blueprint for what his business should look like.
Baloyi analysed what makes American brands powerful.
With no prior retail experience, he conducted 18 months of research development, quality control and assurance. He studied how the Americans elevated brands, built value chains, had companies listed on the stock exchange, or followed the Initial Public Offering (IPO) route, receiving funding from Silicon Valley.
‘Our vision is to build a proudly African sneaker brand that local people can affiliate with. I wanted to do things differently, from the way I raised my start-up capital and boot-strapped my savings to use as seed capital to start the business to our mission to create sustainable jobs for our communities. I’m still intentional about how we run the business, invest, roll out strategy and use our capital expenditure and operating expenses projects.
‘The driving force behind Bathu was multifaceted. I had a decent job at PWC that offered growth and benefits, but going home to Alexandra reminded me not everyone is fortunate to have that privilege.
I wanted to restore hope by creating sustainable jobs. Today, we employ around 180 people in the business, most of whom are local.
‘Although I wouldn’t describe my background as poverty stricken, I had to work hard to get what I wanted. Of course, I wanted my business to be profitable, and I was ecstatic to make my first million, but the positive impact it had had on peoples’ lives was more important to me.’
Central to Bathu’s growth was re-investing in specific areas and growing the right components and mechanics to build its value chain and ensure the business could even operate in Baloyi’s absence.
One of the key lessons he learned was to appreciate the economic value of his workers’ experience and skills, known as human capital.
His approach to business and his manner are authentic.
‘I try to be transparent when leading my team. I don’t do anything that doesn’t align with my values, and I have a teachable spirit, so I love to learn new things. I also listen a lot, and I’m patient. Another of my traits is humility: I try to remain humble and stay grounded in everything I do. I wouldn’t be where I am today were it not for the people with whom I work.’ »
‘i wouldn’t be where i am today were it not for the people with whom i work’
AFTER SHE quit
her corporate job at 26, Sibongile Manganyi-rath established infrastructure and real estate development company
Indigo Kulani Group (IKG). Established in 2006, it’s now an industry leader.
‘I’ve always been passionate about social change, and infrastructure is the foundation for any country to empower its citizens to move out of poverty, starting with access to clean water, education, healthcare and affordable, safe housing. I leveraged my academic background in architecture to start a multi-disciplinary business that could provide professional services to improve lives in our communities,’ says Manganyi-rath.
‘It’s difficult to tell if you’re capable of starting your own business until you try.
Having come from a family of entrepreneurs, I already had experience working for my father’s business in Soweto, aged 12, gaining confidence and learning lessons that would further motivate me to pursue entrepreneurship versus a stable paycheque working for a corporation.
‘I considered my father the prime example of how to be an entrepreneur. I read books written by those I admired such as Sir Richard Branson. The most important advice I heard was to “never be too big to listen to your customers and your employees, the two carry levers that make or break a business no matter its size”.’
Manganyi-rath says her tenacity and building relationships between clients, communities and her internal team were important.
‘At 26, I’d had little experience of leadership, yet I had strong leadership qualities and, when I think about it, I was already putting them into practice without realising it at the time.’
Her initial strategy was to provide design and management services. Challenges with cashflow management caused by delayed payments and project cancellations due to her clients’ budgetary constraints prompted her to expand her services into infrastructure-finance advisory services for the public sector.
That service transformed
IKG into one of South Africa and West Africa’s leading infrastructure finance advisory firms. It was through this exposure that the Group could identify further challenges that existed in the health sector. It responded by creating a digital health business that offers medical services to low-income communities, Alma Clinics.
It’s a sprint-technology business to change how healthcare is delivered at the primary level using limited resources (for more information, visit alma-clinic.com).
‘When I started IKG,
I wanted the freedom to decide my future without having to consult with corporate employers. I wanted to pursue projects with a positive socioeconomic impact on education, health, water and affordable housing projects. The bigger the project, the higher the fee, offering me, a young woman who’d grown up poor, financial freedom’ she says.
‘Making money wasn’t my ultimate goal; it was to be free to innovate business models that benefit our society. That’s the reason I won’t pursue projects in Sandton because I’ve never been one to chase obvious opportunities. Money isn’t everything, although, it was great to make my first million at 28. I enjoy privileges that, as a girl growing up in Soweto, I thought I could only dream of.’
Her advice to entrepreneurs aiming high is to focus on revenue and cost management. Take a short course in understanding financial statements, learn how to manage costs and expenses to avoid financial leakages, and build long-term relationships with yyoouur rclnieenwts.bsmhowrt-itesrm solutiornesaadryen–’t saursetayinoaub?le. Visit bmw.co.za/
anywhere
‘i enjoy privileges that, as a girl growing up in Soweto, i thought i could only dream of’
Over THE past decade
Douglas Hoernle has helped build several technology businesses for education.
‘I dreamed of starting a business from as early as my childhood. In the same way that some people are destined to become football players or movie stars, I think I was always meant to be an entrepreneur,’ he says.
‘I love building a business, developing the organism, warts and all. A combination of my attitude towards money and mentoring, and determination, drive, passion, insight and force of personality have led to my business’s doing well.
‘I define success as giving back more than you take, financially, emotionally and physically. I apply that to most challenges I undertake. If
I can look at myself in the mirror and say I’ve given 100% to a task, I feel fulfilled.
‘I started my first business when I was 15, selling bracelets emblazoned with my school’s logo to my classmates. It proved lucrative because they all wanted one. I used the proceeds to build a house for a disadvantaged person living in Irene, a township outside Joburg.’
When Hoernle was 19, he started a business at university selling personalised, branded wine. Then, he founded Rethink Education, a mobile learning platform that, at its peak, helped over 500 000 students to learn maths and science via their cellphone. Two years later, he cofounded Bambisa and Juggle Communicator, a communication platform for schools to improve communication between teachers, parents and students. Hoernle went on to found Karri, a platform for schools to collect funds from parents using a builtfor-purpose mobile app. Over 1 000 schools across South
Africa use it to reach over onemillion parents.
He also cofounded
Merriment and Co, a bespoke liquor distribution company that brought top-end spirits and champagnes into South Africa and retailed through big outlets.
Hoernle sold and consolidated the majority of his businesses to channel his efforts into Karri, now one of SA’S most-loved apps, which he has partnered with Nedbank.
‘I’m beyond proud of what Karri has become over the past four years,’ he says. ‘A team of rockstar teachers, parents, sales experts, engineers and financiers are working together to take the app onto the global stage and beyond.
‘There’s no such thing as an overnight success; a business does well as a result of years of hard work, risk-taking and dogged determination.
A core skill I’ve developed while building my various businesses is the ability to see around corners. I’m always looking ahead, watching market trends, reading about the latest innovations and trying to make sense of the direction in which the world’s moving. That gives me an accurate view of the best way forward for our businesses.
‘I’ve built a close network of highly experienced entrepreneurs who’ve guided and mentored me through the ups and downs of many of my businesses. I’ve also read business biographies and other books that have profoundly impacted how I manage and lead businesses. Some of my favourites are Shoe Dog by Phil Knight, Trillion Dollar Coach by Eric Schmidt, The Snowball by Alice Schroeder, Steve Jobs by Walter Isaacson, Elon Musk by Ashlee Vance and Principles by Ray Dalio.
‘I’ve never stopped marketing myself and my businesses. Sales is a core component of any business, and I’ve always been incredibly passionate about sharing our story and products while making sure we remain laser-sharp focused on providing worldclass customer service.’
Hoernle says building longlasting relationships built on trust, coupled with worldclass ideas, is the secret to financial stability.
‘I’ve transformed privateinvestment funding into new opportunities through close networks with business partners who’ve walked a decade-long journey with me and my ventures. A friend who runs a successful investment business once advised: “Don’t ever worry about funding. We have more dumb money than we know what to do with. You have ideas. Just ask for it.”
‘Courage is an oftunderestimated trait when it comes to entrepreneurship. To quote Phil Knight, when he writes about The Oregon Trail: “The cowards never started, and the weak died along the way.
That leaves us us!”’
Hoernle values people too. ‘A business is nothing more than the people it serves and those who work within it. I’ve invested the majority of my time at Karri into building a team that nurtures it.
‘The only useful purpose of money is that it gives you the freedom to tackle bigger, more difficult things,’ he concludes.