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

Jonty Fisher: Bringing strategy back

Jonty Fisher, Bletchley Park

Jonty Fisher started Cape-based Bletchley Park with a workforce of three and no fixed address. His initial vision was to provide a fully integrated marketing solution for smaller clients but his ultimate goal was to become best known for bringing strategy back into executional marketing communications.

Have you always been entrepreneurial?

I grew up needing to make my own pocket money, so whether it was coaching sport or running a stand at the Greenmarket Square, I had ways and means in my early years. Myself and a business partner started an agency in my Honours year at the University of Cape Town (UCT), and we didn’t look back, so I guess that would qualify me as always having an entrepreneurial side. To be honest, I’ve never talked about myself as being entrepreneurial, I just took decisions at certain times that were the right ones for me at that stage.

What were you doing before starting your business?

I was studying Business Science at UCT and was never interested in the beauty parade rolled out with all the big marketing or consulting firms. Mark Shuttleworth gave a guest lecture in our business strategy class (before he sold Thawte) where he made the statement that South Africa was in a small window period where conditions were excellent for entrepreneurs. He said that if we had any consideration of doing something by ourselves, that now was the time to do it. That was my final nudge.

What kind of planning went into starting the venture?

To be honest, you learn the most by doing, especially when you’re starting from a young age with your own capital. When you’re older and wiser and certainly if you’re looking for external funding, then something like a business plan is critical, but when you’re young and just starting out, I’d certainly advocate planning a bit less and just being immensely action-orientated. That bias towards action and trying loads of different approaches (when you can take those risks) is a lot more valuable than a business plan on a piece of paper. Be clear on what outcomes you want, and what type of business you want – from enviroment to colleagues etc – but give yourself the freedom to explore. I know a lot of people that hide behind business plans of what they’re “going to do”. I’m more interested in those that don’t talk about it; they just go towards it and get started.

What was your start up capital?

Initially we had no capital and worked between my business partner’s flat and the Golden Spur in Newlands, depending on the time of day!

What was your big dream for this venture?

The focus when we started was on providing a fully integrated marketing solution for smaller budget clients. It was more client-side thinking focused than purely executionally focused. Our aim was to start at objectives and solve marketing problems in a one-stop-shop – thinking of broader objectives first, and then taking a channel neutral approach, rather than executing purely in terms of what channel specialty we offered. Our tagline was “On time. On budget. As agreed.” (Cringe!). The bigger dream was to become famous for bringing strategic thinking back to executional marketing communications.

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

Initially, we tapped a lot of known networks – family, friends, school contacts etc, which carried us through the first few months, and then referral was our big driver for the first few years as we made our way up the client scale. The profit came from ensuring that we sat so close to the client on their challenges, really walked the walk with them, that we became indispensable. That’s where the profit was drawn from. We weren’t suppliers, we were true partners.

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

I think there are two sides to it. Naturally you’re going to have a position or thought on what makes you different. You need to express that in various forms and then just get in front of clients and test it out. Don’t wait until it’s perfect, just go and try it. You’ll very quickly learn what is turning the lights on and what’s not. The other side is always try to get close to your customer so that you can learn what is relevant about what you think is valuable to them and what is not. There are always shortcuts. Ask people for advice. People right at the top of companies that you will look to pitch to. In our experience, people are incredibly willing to help young entrepreneurs trying to get started. We learned the most in areas we knew nothing about by just picking up the phone to marketing managers, sales directors and MDs and just asking them to help us out for 30 minutes. Almost all of them obliged.

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

Various industries can offer broad benchmarks for billing, but ultimately you have to let the market advise you. Start at a median and keep increasing your pricing until your losing at least 15% of your proposals for price reasons. Then you know where you’re sitting. Underquoting is one of the biggest traps enterpreneurs fall into when starting a business and it can hold you back for years. You have to put a value to your belief, and have the confidence to stick to it.

What was your most epic fail in the early days?

In our first year we were running the closing event for the House & Leisure Young Designer’s Awards in Cape Town, which was probably our biggest client at the time. It was a very flashy affair with loads of celebrities and journalists there. We had this beaten up old IBM ThinkPad that we were running this Flash presentation off on a big screen, which carried the announcements and introductions to the winners. Halfway through, while all the guests were glued to it, the old ThinkPad gave up - “there is not enough disk space to run this application” - and it crashed, leaving the guests looking at the desktop with a hundred client files on it! Not much we could do but laugh it off!

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

Undervaluing what they do and trying to do grow too fast. Cashflow is king.

How do you keep yourself motivated?

Family naturally plays a big role, but I’m a big believer in building an entrepreneurial network too. There are challenges that you face as a young business owner that are so different to corporate environments and it really helps to share knowledge, learnings and commiserations with fellow entrepreneurs. Personally, you have to remind yourself why you started in the first place. If you’re being true to that, then it will get better and tough times will pass. If you’re not, change it.

Did you have a mentor?

I’ve been lucky to have various great mentors over my career, in various different spheres of business focus. They’re incredibly valuable and can fast-track your journey. The single most valuable piece of advice I have ever received is to give myself the freedom in my work to be absolutely true to myself. It sounds immensely simple, but it is something that very few people do, and especially given the pressures of running your own business, you often feel like you have to compromise. I’ve learned that each time you compromise, and try to chameleon your way to a piece of work, or a client relationship, or whatever, you subconsciously chip away at your own confidence and focus. Always be true to yourself and your own dreams; do what you need and want to do, not what you think people expect you to do, or how they expect you to act. That freedom can truly build category-breaking businesses.

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

That’s a very difficult question to answer. I think it’s very diverese in different industries, at different ages, and naturally with different funding platforms, and I don’t think there’s a standard benchmark here. However, I’d say it’s time to shut up shop when you’re not feeling the love anymore, which goes without saying. Building a business is often a thankless, highly stressful and demanding journey, and you have to build an armour of love for the business to handle it. If you fall out of love, you’ll be burnt out quickly.

Which three character traits do all entrepreneurs possess?

Belief, tenacity and self-awareness.

Do you believe in internships for your business?

I do, for both talent scouting and more philosophical reasons too. I think we work in a business environment where “work experience” is seen as a non-negotiable, which can be a huge barrier to entry for young people. Internships can help them to bridge this divide. I also think internships are really important for young people to really find their meaning in their work – is this really what I want to do? We encourage interns to explore different areas and will give very honest feedback as to whether we think this is their game or not. If someone would like to intern at Bletchley Park, they just need to email: cv@bletchleypark.co.za

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

* Focus. Don’t try to be everything to everyone. The fastest growth comes from focus.

* Just try it. Don’t wait until you think something is perfect. Fail fast.

* Don’t be afraid of anyone, believe in yourself and back yourself. You’re good enough.

* Find mentors early

* Be true to yourself. Always.

Get in touch with Jonty Fisher from Bletchley Park via email:  jonty@bletchleypark.co.za, visit: www.bletchleypark.co.za, on Twitter: @jontyfisher and on LinkedIn.

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!

My Independence Day

If you'd have told me two years ago that I'd be sitting at a loaned computer in the spare room of my home, after having lost pretty much everything that "makes me who I am", I'd have tied you up, covered you in syrup and rolled you down a gravel pathway because I'm spiteful like that. But here I am: no job, single and nursing the fragments of an idea that I'd like to lovingly turn into a legacy project that I can be proud of -- and that turns a profit.

I left a job that I loved at the end of May 2012 -- I've been in the consumer magazine industry in South Africa for the last 18 years. It was a rash, instantaneous decision but the absolute perfect one for me: my independence day. So, I've spent the last month setting up a home office and trying to dream up a strategy that I can use to market my skills set and turn them into a viable business that pays the bills and allows me to live a comfortable lifestyle. Which is not as easy as it sounds.

I've limited capital and loads of confidence in my abilities in the print media and digital space; the only challenge is that I have absolutely no working knowledge of being an entrepreneur. And that's where this blog comes into its own. I hope to put my skills as a journalist and writer into play, and interview those amazing local business owners and entrepreneurs who have done all the hard work before me in setting up their companies. The practical, hands-on wisdom they share, I hope, will be worth far more than spending cash I don't have on courses and tutorials that could turn out to be a waste of time. I see it more as knowledge-sharing and paying it forward.

With the economy being in the sad state that it's in, I have three friends who are struggling entrepreneurs, who need to make some very serious decisions in the next few months on whether to abandon their own-business dreams or to seek out gainful (yet very junior) employment. They seem to think I have a magic business 8-ball on my desk that I can consult on their behalf, to give them ideas on how to breathe life into their own ventures. I don't. I don't even know what to do for my own struggling start-up, except trial and error. But that, for me, is not a very positive or proactive point to start from. So I'm going to do what I do best: interrogate the crap out of this "going on my own" lark in the hopes that it helps other people out there who are in a similar situation to turn their business dream into a reality. It'll be done in my own way and I hope you enjoy coming with me on this adventure into entrepreneurship!

And to the universe: thank you for this -- and something better!