From Carlton waiter to top entrepreneur
Tommy Makhatho, owner of Bibi Cash & Carry, a retail group in the rural area of Qwa Qwa in the Free State, has been named the 2013 Sanlam/ Business Partners entrepreneur of the year
DID you have entrepreneurial role models growing up? No. My father was a bus driver. I left school once I had my JC [junior certificate] because the family couldn’t afford to pay for my education. What originally motivated you to open your own business? I was a waiter at the Carlton Hotel coffee shop in 1981/82, and every morning a customer by the name of Brian Gule would come in, pull out a wad of notes and leave a tip that was far more than the cost of the coffee. I asked him what he did for a living and he told me he owned a hair salon. Eventually I visited his salon and saw queues of people waiting to get their hair done. I asked him if I could volunteer to become a shampooist and learn the business. I’d go to my hotel job from 6am to 3pm and then I would work in the hairdresser. I then opened my mobile hair salon. Did you get financial help? Not a penny. I was a good waiter and made a lot of tips and was able to save my entire salary. After two years of work I had R7 000 in the bank, enough to buy everything I
needed for the business. You’ve had failures — you had to close a couple of your hair salons. I eventually had six hair salons. I was driven by passion and grew too fast and without a proper infrastructure. I couldn’t manage six salons so I consolidated and went back to one. I also realised that this was a service industry and needed to be carefully looked after and I thought, why not let others open the salons, and I will supply them and let them deal with the service problem? I then opened a cosmetic store for hair salons. Is there a big difference between running cosmetic stores and grocery stores? It is a difference of scale. In the cosmetic industry I stocked around 600 items in the biggest store. In a supermarket there are at least 40 000 items. I opened my first BiBi cash and carry in 1991. At that point I was smarter, more knowledgeable and had a better understanding of business. I now have seven of my own and supply to 34 express stores that I helped others start up. How would you explain your successes in retail? The key to our success is having the right team, and the secret lies with systems and having a good accounting firm. It is not just about numbers, you need an accounting firm that will do risk assessment and advise you to watch this, and fix that. You also get what you pay for. What advice do you have for aspiring entrepreneurs? Do not go into business for the sake of money; go into business to create wealth that will be built over time. The value in a business is not in what you get every day, it is what you are investing in over time. Don’t flush away your resources, pay yourself the salary that the business can afford and that is market related, but make sure that most of the money goes back into the business or is kept in reserve. — Shelley Seid