Ann Druce: Is your communications strategy clear & relevant?

Ann Druce, Octarine Communications

Ann Druce started KZN-based Octarine Communincations in April 2001 after the mid-size advertising agency where she was working underwent restructuring. She seized the opportunity to go on her own, and set up a home office with friends’ castoff furniture, a computer and a phone.

Have you always been entrepreneurial?

I started out in corporate marketing but, happily, working in organisations that encouraged entrepreneurial thinking. 

What were you doing before starting your business?

I had begun the process of cutting the apron-strings by moving from corporate to a mid-sized advertising agency. Then when things were tough and the agency restructured, it provided the impetus I needed to go on my own.

What kind of planning went into starting the venture?

I don’t think an elaborate document is essential, but a plan certainly is. However, before I’d even started thinking about writing a business strategy, my start-up plan was instigated by a client when I mentioned I might start an ad agency.  He committed to giving me his business if I started on my own, giving me the freedom to make the decision based on what I wanted to do, rather than a fear that it might be a while before I established a client base.

What was your big dream for this venture?

The good old-fashioned ideal of being a true business partner to my clients – learning their business and making a real strategic contribution: translating their marketing strategy into clear, relevant messages that reach their target markets.

How does a new entrepreneur find business leads and profit from them?

Not every entrepreneur is a born salesman. But we have to use what we have at our disposal – from working our existing networks and developing new ones, to the dreaded cold-calling. I recommend that new entrepreneurs join business groups, scan the employment section in the Sunday papers and see when new decision makers are being appointed, and call them up. And that they ask clients for referrals after every single sale, be it a product or a service.

How does a new entrepreneur figure out what makes them unique and leverage that difference?

Sometimes what makes you unique isn’t unique at all. All margarine is cholesterol-free, but Flora made this their point of difference, while others were talking about taste. So decide what your niche is and make your unique claim. Evaluating your target market and what they might need is a good place to start. What are their key stressors? Can you address that? What are the frustrations that people think they have to live with? Can you change that? Is it your hours of service? Is it a standard call-out fee? Is it a guarantee that is credible?

How does a new entrepreneur figure out what to charge for their service/product?

Pricing should reflect your value. Don’t assume that being the cheapest will get you more business – you might just look suspiciously cheap. Establish what your costs are and evaluate your competitors’ pricing, and take a view on what your market can stand. Then decide where you want to position your offering relative to these factors. You may want to be viewed as a luxury item, or you may want to be seen as accessible to all. You may need volumes for production economies of scale or you may prefer to limit volumes and earn a greater profit per item.

What was your most epic fail in the early days?

I was away and relied on a colleague to proofread an ad before it went to print. There was a typo in the headline. Bad enough for any client, but particularly so when the client is a university and it looks like they can’t spell! I discovered it too late to stop it going to print and there was nothing I could do. I phoned the client and told them before they found out elsewhere. Abject apologies and loads of humble-pie – and a relationship of trust and respect – got me past this.

What are the two biggest/most common mistakes that new entrepreneurs make?

Spending money they don’t yet have and focusing on an image of success instead of the work they produce.

How do you keep yourself motivated?

Get dressed and go to work. If you aren’t busy producing work for paying clients, you should be developing your marketing.

Do you have a mentor?

I never really had a mentor, but the single best piece of advice I was given was: When you don’t know where to start, just start. It’s funny how that questions that you need to ask and the research you need do become evident as you begin to structure your project.

How long does it take for a venture to get off the ground, in your experience?

I’m sure this varies by environment. In an area like advertising and graphic design, you are asking a client to trust you with his company image and reputation as well as his money, so it can take a lot longer to build a business than if you are selling low-price, low risk products, where if your product doesn’t live up to expectations they simply don’t have to re-order. You need to build a suitable time-frame into your plan.

What’s your life motto?

Life is too short to do a job you don’t love. 

If you could give yourself any advice back then, what are your top 5 wisdoms?

* Apologise when you mess up. And you will! Don’t make excuses.

* Don’t work with clients you don’t respect.

* Don’t work with clients who don’t respect you.

* Know where the money is.

* Don’t be embarrassed to chase clients who owe you money – they’re the ones who should be embarrassed.

Get in touch with Ann Druce from Octarine Communications via: www.octarine.co.za, on LinkedIn and on Twitter: @AnnDruce

Regine le Roux: Partnerships and accountability

Regine le Roux, Reputation Matters

For Regine le Roux, 2005 was a turning point in her career – she turned her apartment living room into an office and started Reputation Matters, one of South Africa’s first reputation management consultancies. Her business provides strategic business insight centred around the communication to stakeholders that has a positive impact on the overall reputation of an organisation.   

Have you always been entrepreneurial?

From a young age I was always thinking of ways to make extra pocket money and the entrepreneurial spirit has definitely grown more over time.

What were you doing before starting your business?

I did my MCOM in Communication Management, specialising in reputation management at the University of Pretoria. To get my foot in the “working world” door, I joined a management consulting firm as a research analyst. This was an interesting time and I learnt a lot, but statistics was not my career of choice; I wanted to get more involved with something a lot more creative, which was more in line with what I studied such as communication management, public relations (PR) or event management projects, so I joined a promotions agency. But, during my time at the agency, I realised that there weren’t many companies that managed reputations, so I grabbed the opportunity!

What kind of planning went into starting the venture?

A lot of people do their jobs extremely well and then think that they can start their own business with their expert skills. This is true to some extent and I also fell into this trap, but when starting a business you need to realise that you’re going to have to manage a business, not a job. I personally never wrote a formal business plan, but I had a very clear idea in my head of what I wanted the business to look like and how it should function. I worked with many lists of absolutely everything that I could think of that my ideal business needed, and then systematically started to tick things off. I think a business provides guidance to get you started, if you’ve no idea where to start, but I don’t think it is essential.

Where did your start up capital come from and what was your vision?

When I decided that Reputation Matters would be my future, I played open cards with my employer who was incredibly understanding and supportive, and allowed me to continue working on a half-day basis to supplement my income. I didn’t want my company to be seen as “just another PR agency”. Often, when people think of PR agencies, “gin and tonic girls” or “bunnies and balloons” spring to mind, so it was important for me to position the business as being so much more than just PR and event management.

How does a new entrepreneur find business leads and profit from them?

Networking, networking, networking! It may not be everyone’s cup of tea, but you need to speak to people and let them know what you have to offer and, most importantly, make them want what you have to offer.

How does a new entrepreneur figure out what makes them unique from everyone else in their market and how do they leverage that difference?

You get to a point when you realise that you’re an expert in your specific field and you start wondering why you’re working for someone else when you could be working for yourself. From an entrepreneurial point of view, it’s important to make the distinction between realising that you’ll be running a business opposed to just doing the expert job that you do so well on a daily basis. Running your own business is totally different. Once you know this, your communication and marketing strategy will play a key role in getting messages out there that will leverage you in the market.

How does a new entrepreneur figure out what to charge for their service/product?

Firstly, find out the market value of similar products and services; this will provide a base to work from. For many years I used the “gut-feel” approach, which is definitely not recommended. I’ve never liked accounting, but an important lesson that I’ve learnt is to make sure that I understand my monthly financial statements, and to plan accordingly when it comes to expenses versus income.

What was your most epic fail in the early days?

I don’t like to see it as an “epic fail” per se, but there were many challenges thrown my way which taught me two very valuable lessons: SARS needs to be paid, full-stop. They are supportive of small businesses, but ultimately still need the monies owed to be paid, with interest. And beware of partnerships – it may seem great to have someone to share growing pains with when starting a business, but be very careful of who embarks on the voyage with you. Make sure that you have a formally drawn-up contract right from the start outlining everyone’s responsibilities, shares, contributions etc. It doesn’t matter how much you trust each other, there are no guarantees, and you don’t want to be caught out.

How long does it take for a venture to get off the ground, in your experience?

I think the first three years are definitely some of the most challenging you’ll face. If business isn’t picking up, it may also be worth investing in a business coach who is able to provide insight and be a sounding board to see how best an offering can be tweaked.

Is it ever alright to give up on a dream?

If, for whatever reason, your business is not working out, don’t see it as giving up, perhaps it just means that you’re not ready for that specific area in your life yet. Gain some more experience, learn a few more lessons and then re-try later. Don’t give up on something that you believe in.

What’s your life motto?

I have two: “Plan for the future, but live and experience the now, as it’s all we have”, and “Always tell the truth; you can’t remember a lie”.

Do you believe in internships for your business?

Yes, internship is great – it gives the candidate an opportunity to experience the world of communication management so they can see whether it’s a profession that they’d like to pursue further or not. If someone would like to intern at Reputation Mattes, they can send me an email motivating why they should be considered to: info@reputationmatters.co.za.

If you could give yourself any advice back then, what are your top 5 wisdoms?

* Always pay SARS on time!

* Be very careful who you go into partnership with.

* Quality – and not the quantity – of employees is very important.

* Accountants are vital; select them with care.

* Invest in experts, e.g. labour management firms have years of HR knowledge, same goes for accountants; leverage on this expertise.

Get in touch with Regine le Roux from Reputation Matters via email: regine@reputationmatters.co.za, visit: http://www.reputationmatters.co.za, on Facebook, on Twitter: @reputationiskey and on LinkedIn.

David Kokong: Know people

David Kokong, entrepreneur

Mtsamai David Kokong became his own boss in 2000. He made a R10 investment in a training manual and went on to excel as an independent field advertiser (IFA) for life insurance/assurance giant Clientèle Life. And with more than 7 500 people in his network and an unwavering belief in himself, business success was sure to follow!

Have you always been entrepreneurial?

Always! I can specifically recall being seven years old, lining my friends up to catch fish in the river and then selling it for pocket money. At nine, I discovered that people were always hungry at township funerals because they’re so long, so I improvised and started selling cooked mielies and fish cakes to the attendees – even the pastors bought from me!  

What provided the push you needed to go on your own?

I was a correctional officer for 20 years, which landed me the position as the head of the Goodwood Prison in Cape Town, as well as doing IFA part-time. It dawned on me one day, while comparing my salary advice slip to my IFA commission statement, that I was earning more money with IFA, with a quarter of the stress associated with running prison. My fear of sustaining my lifestyle past retirement age gave me the push to go into IFA full-time – I couldn’t see myself getting a job just to make ends meet after the age of 60, which also meant that I wouldn’t be able to be in the ministry full-time either.

IFA is founded on the principles of “ubuntu” meaning daring, caring and sharing, so through IFA, Clientèle Life is bridging the gap between the haves and the have not’s in order to eradicate poverty. That really appealed to me as a black entrepreneur – as part of IFA, the necessary mechanisms are in place to help you succeed. They’ve simplified the business plan and incorporated it into a living programme to ensure the success and sustainability of the business. I worked from anywhere and everywhere and, as long there are people, my business thrives simply because I’m a networker.

What’s your big dream for this venture?

Apart from building the brand and being a good example to others, my late father, Pastor M. Z. Kokong of Apostelic Faith Mission (AFM) instilled in me that every person has the potential to be someone and that we’re not to judge anyone. In my quest to be in ministry, I soon realised that in order for me to bless others, I have to be blessed. My involvement in IFA equips me to be financially free and to guide and empower others to financial freedom. Consequently, I have a vision that through IFA we can touch so many people’s lives, provide them with the opportunity to rekindle their hopes, instil self-worth and, most importantly, to be able to provide for their families without being dependent on government handouts.

What was your most epic fail in the early days and what did you learn from it?

My business suffered a bad blow during the recession when a lot of people lost their jobs and couldn’t afford to pay their premiums. But I stayed focussed and motivated my team to see the bigger picture, changing my strategy to use the dip of the recession to secure new business.

What are the two biggest/most common mistakes entrepreneurs make?

They put all their eggs in one basket and give up too easily. Only the strong and toughest will survive. As the saying goes, Rome wasn't built in a day; good quality things take time.

Is it ever alright to give up on a dream?

No, never ever give up! Believe in yourself and your dreams; once others see your passion they will believe as well.

What’s your life motto?

Work like a slave today to live like a king tomorrow.

What three character traits do all entrepreneurs possess?

The foresight to identify money-making opportunities in places or instances where others do not, the ability not to give up; to persevere and innovation.

If you could give yourself any advice back then, what are your top 5 wisdoms?

* Patience

* Commitment

* Perseverance

* Focus

* Faith – believe in yourself even when nobody else does.

Get in touch with David Kokong via email: david@dkokong.co.za or visit: http://www.dkokong.co.za. 

Top 5 new business basics

Success and/or failure is a two-way street

This week we’ve met Peter Unsworth, Kendel Falkson and Styli Charalambous, all South African entrepreneurs in the media space. But the experiences and information they’ve shared can be applied to any start-up, no matter what industry. The common threads in their working knowledge are:

1. You don’t always need a formal business plan

Many new entrepreneurs get so freaked out by the thought of writing a massive, formal business plan, they simply don't bother. But if you're a small business person who is looking to secure funding to get your venture started, you definitely will. Business plans are there to assure the people you're looking to loan money from – be it a bank, angel investor, venture capitalist, friend or family member – that your venture is viable, has a future and will provide the income to pay their investment back over a set number of years. So, if you’re applying for funding, some admin time will be required – do your sums, make those projections and get that plan down on paper to prove to potential investors that your idea/product/service is worth the cash-injection that will give them payback at set points down the line. You’ll find some great example plans and more advice here, here and here.

Just one thing to remember about getting a second person on-board as “the money” – there needs to be a rock solid, yet reasonable contract in place, crafted by a lawyer (expensive, but worth it in the end). As part of their expectation, the funder may ask you to hand over a percentage of ownership in the business and you need to be comfortable with that; if you’re not and want to retain sole ownership, you may need to relook where the money’s coming from. The contract also needs to handle the “what ifs”… like exit strategies for you and/or your partners, loan payback terms, share buyouts, restraints of trade and non-disclosure agreements (NDAs).

2. Strategise, be confident and over-deliver

You may not need a formal business plan to get your venture going, but you must take a day or two to sit down and figure out a strategy on how you plan to attack every aspect of the business. From setting up an office and filing, to setting your billing cycles, branding your stationery and what you’re going to say to people when they ask you what your business does. You have to know what you do, the services you offer and the value you can add to potential clients’ lives better than anything in the world. That certainty breeds confidence, and if you’re 10 000% sure about what you do and how you do it, people will be more likely to buy into using your company over a competitor.

In learning about your new business you may want to get some “rules” or have systems in place before you start. Like setting yourself the goal of responding to correspondence within 24 hours, especially if you’re making great service one of your key deliverables.

3. Manage that cashflow

All three of our featured entrepreneurs say mismanaging cashflow is the biggest mistake a newbie makes once the money starts coming in. It’s great having all this cash to wave around and it can make a huge difference in your life – but only if you look after it.

Business – especially new business – comes in ebbs and flows, so until you’ve established yourself a solid reputation in the market, you’ve got to be prepared for those quiet times. Immediate cash relief is great: it will get you out of a debt hole quickly, but there will still be overheads to pay to keep that cash cow grazing. Pay all the bills, salaries and taxes relevant to you and your business in time and honestly, and resist the urge to run out and buy the trappings of a luxury lifestyle. How you spend your profit should be strategised, too! Plan for that “rainy day” wisely.

4. Want new business? Go out and get it!

We live in a connection economy, so the more people you know professionally is a massive plus. All our entrepreneurs agree that if you want to generate leads for your new venture or to seal the deal on new business, you’ve got to leave your house – and your comfort zone!

Whether it means cold calling potential clients, or following up recommendations and referrals from friends and family, no-one sells yourself better than you can – especially if you don’t have an advertising budget. Relying on email shots and phone calls is simply not enough – you need to connect, in person, with as many new contacts as you can. The most important thing to remember is that potential new clients only need to know two things: how your product or service is going to add value to, or simplify, their lives and how much it will cost. Know this information by heart, be confident, show genuine interest in them and keep your promises! Follow up regularly, stay top of mind, but abandon needy and creepy.

5. Passion pays off

Above all else, if you’re not passionate about your business, no-one else will be. Doing something you don’t love it just not worth it – and people can pick up on it. It’s easy to become discouraged when things are slow and aren’t going well. And, judging by our entrepreneurs’ comments, this is exactly the time to “fake it till you make it”! But that doesn’t mean hiding your emotions. If you’re having an off day and you can afford to, take a step back from the business, do some things that you enjoy and reconnect with the reasons why you started the venture in the first place. And lean on that support system – brainstorm new offerings, strategies and business leads. Who knows where the ideas may take you.

But if the cycle of bad days outweigh the good ones, our entrepreneurs agree that there comes a time when you have to assess whether continuing the venture is viable or not. It's a hard decision, but there's no shame in closing doors if something's just not working. Finally, be grateful for what you do have and take the time to say “thank you” in a way that suits you best.

And from me, to the universe, thank you for this -- and something better!

Styli Charalambous: Selling the idea

Styli Charalambous, Daily Maverick

In October 2009, Styli Charalambous and his team of seven launched the Daily Maverick; a digital “newspaper” that provides South Africans with daily news, insights, analysis and opinions. Charalambous’ abandoned a career in investment banking to embrace SA’s growing digital media industry – and it’s paying off!

Have you always been entrepreneurial?
Yes, I spent most of my misguided holidays working for my dad, so I guess I never really had a choice but to get involved in ventures outside of the corporate world.

What were you doing before starting your business?
I trained as a chartered accountant at Deloitte in Johannesburg and then spent about four years in London, wandering the halls of investment banks. But my passion for South Africa and getting involved in start-ups brought me back. Thankfully!

What was your big dream for this venture?
It was really my editor, Branko Brkic’s dream that I got caught up in, but it’s something we’re both passionate about: changing the media landscape in South Africa and influencing the influencers with smart commentary and debate.

How does an entrepreneur find business leads and profit from them?
Networking. The best leads come from introductions via people you know and trust. A lot of time you get unsolicited rubbish but, being in the media, it’s our job to know as many people as possible, which helps. I read a lot, and am lucky enough to have close friends who are very enterprising and broad thinking, so I bounce a lot of ideas off them and my editor, and I lean on each one for advice and guidance.

How do you figure out what makes you unique from everyone else in the market and how do you leverage that difference?
I don’t think you necessarily have to be unique in every respect. Sometimes, just doing something better, faster, more reliably than anyone else is good enough. I sometimes joke with my mates that in Africa, service is a unique selling point. Budding entrepreneurs think they need to reinvent the wheel to make it happen, but I can guarantee you that in SA, it's harder than you think. I’m pretty sure that if Mark Zuckerberg had started Facebook in South Africa, it would have been tossed on the scrapheap ages ago, or would have had to leave the country to make it work. South Africa is a tough, harsh environment for dreamers who live on the cutting edge, especially when it comes to technology. We’re a conservative nation with poor Internet penetration, so your lead time to meaningful traction is longer than it would be in developed countries, and even some African countries.

How did you come up with your pricing model?
It depends on the product/service and the industry you operate in. In media, and digital media especially, we have this conundrum where people expect everything in a digital format to be free, but it costs us a huge amount to produce. So pricing a digital media offering is tricky and your product has to be of the highest quality if you expect people to pay for it.

What was your most epic fail in the early days and how did you solve it?
Not understanding how the infant digital media industry operates, how small it is compared to traditional media and not dedicating enough resources to sales and marketing.

What are the two biggest/most common mistakes that new entrepreneurs make in their first three years of business?
I’ve heard many people talk about this massive market (millions of people) and how they only need to capture “just 10%” of that to make gazilllions. Well, I have news, 10% is a massive number and very difficult and expensive to capture. Don’t kid yourself with your projections. The other thing that entrepreneurs fail to do is managing cash flow adequately; there's nothing scarier than having a payroll to sort out, two days to go and a bare bank account.

How do you keep yourself motivated?
Passion. Without passion for what you do, you will break down and succumb to the pressure of being an entrepreneur. The other extreme is irrational passion, when an entrepreneur is flogging a dead horse or doesn’t exit because he is too emotionally attached to his venture. Sometimes you need to take a step back and make some hard, objective decisions.

How long does it take for a venture to get off the ground, in your experience?
It depends on the scale of the venture, the bigger the scale the longer it will take. But if you’re going to leave the comfort of corporate, make sure it’s worth your while. As a rule of thumb, I’d say don’t expect any miracles in the first three years. It’s ok to abandon your dream, but only if you’ve given as much as you possibly could. Sometimes you can be too early (bleeding edge) especially in South Africa, where the timing just isn’t right and you end up hurting yourself and others. It’s the most difficult call to make when you get to that position because you’ve invested so much time and energy into it. You will have learnt so much and grown so much, which is why round two or three is usually where most entrepreneurs make it.

If you could give yourself any advice back then, what are your top 5 wisdoms?
* This is going to be the hardest thing you have ever done, but the most rewarding!
* You will need more money than you think to become profitable.
* You will need more time than you think to become profitable.
* Sales! Sales! Sales! Sales! Everything else is just admin.
* No-one cares about your business as much as you do, so make sure you do everything you can to make things happen.

Get hold of Styli Charalambous at the Daily Maverick via email: styli@thedailymaverick.co.za or visit: http://www.dailymaverick.co.za, check out his LinkedIn profile: Styli Charalambous or follow him on Twitter: @stylichara.