Man survived failure to be paid
Madikane came up with solution to ride cash-flow crisis
Nine years ago, East London businessman Mdu Madikane, 52, was on the verge of losing his company as he was owed nearly R5m by various provincial government departments.
Madikane’s company was specialising mainly in landscaping and also offered cleaning and security to provincial government departments.
So broke was Madikane that he had to use his overdraft facility to pay the salaries of his workers. Absa had begun a process to repossess his R1.8m house. His credit record had plummeted; his five vehicles had already been repossessed and he had to stop his children from taking extramural activities to save money.
At the time (2012) government departments owed R636m in unpaid invoices that were older than 30 days. Madikane was among hundreds of business owners who had taken a huge financial knock from not being paid.
His landscaping business of 11 years, which had a monthly turnover of over R1m with 285 employees, was on its knees.
“It was a difficult period in my life. I had to make some decisions to save my business, my reputation and to safeguard my children’ livelihood and their confidence. I had realised that to stay afloat, I had to devise a new business strategy and model that will be less risky and less reliant on government tenders,” said Madikane.
He shifted his focus to sourcing and supplying, which meant that he would serve as a middleman for the government.
He also deployed a diversification approach, ventured into business partnerships and did consultancy work through the Buhlebezwe Group, which is linked to over 20 companies that Madikane directs.
“I can confidently confirm that my business savvy was taken to the next level by the hardships experienced by both myself as entrepreneur and the family business Buhlebezwe.
“I was fortunate to survive because not every business can survive not being paid. I’ve witnessed a lot of firms collapse because of these two pandemics: Covid-19 and unpaid invoices. Entrepreneurs need to be smart to survive and stay afloat ,” said Madikane.