Renate Klass: Cash is king!

Renate Klass, ExecuTrain and Futurethis 

Renate Klass admits she’s never been good at working for people, so it’s no surprise that this powerhouse is a serial entrepreneur. She started an executive training company, ExecuTrain, in February 2001 with 12 staff. Then, eight years later founded Futurethis Consultancy (Pty) Ltd, with a team of five, distributing high-end medicosmetics.

Have you always been entrepreneurial?

When I started my first company, ExecuTrain, I had a business partner to share the stress so really enjoyed myself. When a venture is yours from the ground up, you fight harder, you don’t give up, negative words drive you crazy – you just keep on pushing that elephant up the hill, regardless.

What were you doing before starting your business?

Before starting Futurethis I was running ExecuTrain together with business partner Anne Copland.  We definitely needed a push for us to go on our own. Futurethis was also the result of a push. I couldn’t get my QMS Medicosmetics anywhere in South Africa, so made a plan to get the agency for South Africa and started a new company. Then I needed staff and marketing, and suddenly you’re a going concern.

What kind of planning went into starting the venture?

Someone gave me a wonderful business plan that asks questions, I still use this same system to this day and update my business plans regularly – it gives me perspective and reminds me of my competition and where I stand – a good reality check. I think that too much is put into business plans for other people to read, when it’s really for you to know where you’re going and what you’re doing.  If an investor wants one, I believe it’s mostly for them to know that you have a plan – but investors don’t want the fluff they just want the bottom line, and when I started out I could barely say income statement let alone figure one out... I can now!

What was your start up capital?

My business partner in ExecuTrain managed to get a good friend of hers – a lawyer and his partners – to finance us around R600 000; I can’t remember the exact amount. My latest company is a different story as I can finance this myself, but with experience I learnt to make 100% sure that our debtors are always up to date. Anyone owing money is handled immediately and I will contact a lawyer if need be.

What was your big dream for this venture?

ExecuTrain’s big dream was to keep the business at a high standard and to be the clear market leader in training. We are. From a Futurethis perspective, I want the products that I distribute to be recognised as trustworthy and honest, with the bottom line that they work!

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

Some people are excellent at networking, I am not. A new entrepreneur should find a PR team that they can work with – PR is a tricky subject and it needs to be worked. But, I must point out that you need to keep connected with your PR as it’s your business, your business ideas and no-one will understand it or be able to promote it as well as you can – so never leave things like this 100% in the hands of others. A good PR person will allow you to keep control.

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

It’s about passion and belief. If you believe, then others believe you. Never doubt yourself. It’s about perception. Market your idea!

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

Firstly, find out where you want to be in the market and look at comparative prices, then see if you can justify selling your product at those prices. Then you look at what it will cost you to make/produce/import (including duties, exchange rate, all costs to get the product to the shelf) and work in a mark-up percentage on cost to retail – if you’re going to sell wholesale, then you need to make sure that you’re covered to wholesale and that the retailer makes enough to justify them selling your product. You get to spend a lot of time on Excel!

What was your most epic fail in the early days?

Cashflow wasn’t good enough to pay myself and my partner a salary for the first four months, so we closed in on collections and monitored sales more closely. You must always look ahead and anticipate with regards to your cashflow – you might look good on paper, but cash is king. This lesson is to be highlighted and remembered!

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

Something that I’ve seen a few times when new entrepreneurs bring their business plans to us is that they allow for a very big salary for themselves with little thought as to how much hard work is going to be needed to pay that salary.  It seems that they think that a financier is responsible for the salary. Financiers are a tough breed and have no emotional attachments to a business, so will close the money door as easily as they open it.

How do you keep yourself motivated? 

As mentioned earlier, it is tough but you have to keep on pushing that elephant. If you let go, it runs you over. I read business books continuously as the information inspires and motivates, and always teaches me a new something that I didn’t know before. I’m lucky in that I’m an optimist and can see the sun on the darkest of days.

Did you have a mentor?

My dad was an astute businessman but he died before I had started out on my own – one thing that he couldn’t stress enough is that you don’t have to answer everyone immediately. His advice was to write your answer down on a piece of paper and put it in a drawer for three days. Then read it again and if you still want to send it, do. This was before email and the Internet, but it’s profound and I wish that I obeyed this wisdom more often!

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

This depends on your marketing, your backing and your product. Business isn’t easy and starting now in a more depressed economy means you must be tougher – even five years is early to say, “Yay! I made it.”  You should always be tweaking your offerings as some things work and some don’t. Keep what works and drop what doesn’t immediately. If you love your business and it’s not doing well, you can cut back on the heavier expenses and keep it going as a passion. As long as you have a plan, it will turn around. 

Is it ever alright to give up on a dream? 

No never give up on a dream – all we have is dreams. That’s why I stress you should believe in yourself – but a dream should also have a plan and goals and targets. So don’t just dream; you must walk the dream, too.

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

* Believe in myself more.

* Work harder.

* Get out and sell!

* Be smarter with the employment of staff.

* Spend little or no time thinking about the negatives, why something went wrong – it’s the past – move forward all the time.

Get in touch with Renate Klass from ExecuTrain and Futurethis via email: renate@futurethis.co.za, visit the ExecuTrain website and the Futurethis website, on Facebook here and here, and on Twitter: @futurethisqms

Jules Newton: No need to be unique; be the best!

Jules Newton, Avocado Vision

The CEO of Avocado Vision, Jules Newton, found herself in a tricky spot: managing the training of a team in a corporate environment and going through a divorce. Her then husband was working on the same team and it became a case of get another job or go into the self-employment space. That was in 1996 and Newton’s since been running a successful company that creates opportunities for the people of South Africa, to empower themselves through small business-creation and related skills.

What kind of planning went into starting the venture?

I have never written a business plan – it has grown in my head over time, as my capability and business acumen has grown. I think business plans may be useful when one is moving into a funding or venture capital stage, but I’ve never had any use for one.

What was your start in business?

I quit my job, signed my bond and my car finance deal, got divorced and started my company all in the same month. I didn’t have a penny. I did have a 3-year old child! All I had was a customer and a telephone. I worked from home and sold my heart out. Failure meant my child wouldn’t eat, so it wasn’t an option for me!

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

Building relationships with prospective customers and creating a proposition that adds value to those people. Making sure what you charge is always just a little less than the value you create for them. And talk to lots of prospective customers.

How does a new entrepreneur figure out what makes them unique?

It’s about understanding the industry you occupy very, very well.  The more you know about your industry, the more you’ll be able to understand how you can differentiate yourself. But people can be successful entrepreneurs even if they’re not unique. Doing a great job, pricing well, and being in your customers face when they need what you’re selling can be enough.

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

Market research and talking to clients are important factors. Beware underpricing, though. There is a psychological “value perception” factor that comes in. If you try to significantly underprice your competitors, clients may perceive you to be “cheap and nasty”, or suspect you may eventually go out of business, by naively pricing your product in an unsustainable way.

What was your most epic fail in the early days?

I used VAT and tax money to pay salaries when I ran out of cash. Then I even ran out of cash to pay salaries again. I had made a very serious pricing mistake, and was running my company into insolvency without really seeing it. Changing my pricing strategy and focussing on getting more clients saved the day. Working closely with my team during that time saved all our jobs.

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

Spending cash in the business on personal luxuries, and expecting growth to happen much more quickly than it does, and risking costs in anticipation of that growth.

Did you have a mentor?

I have had many mentors over the years. All of them helped me reframe my picture of my business and gave me practical insights. And courage to carry on!

Is it ever alright to give up on a dream? 

Many people do. I haven’t. It’s nearly killed me, but I’m still in the game. I have no idea whether it’s alright or not? I suppose we all have a limit as to what costs and sacrifices we are prepared to risk and endure.

What’s your life motto? 

“Get up again.”

Which three character traits do all entrepreneurs possess?

Resilience. Vision. Conviction.

In an entrepreneurial arm-wrestle, who would you back: Steve Jobs or Sir Richard Branson?

Richard Branson. I believe Steve was a brilliant man, but I wonder how long Apple will last in its specialness now that he’s gone? I think he kept Apple going through sheer force of his will. Richard seems to be able to build powerful people around him and then let go. Virgin will survive Richard, I think.

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

* There are very few shortcuts. You won’t get rich fast. Starting your business is a long and risky road, and you have to be able to stay the distance.

* Apply for a credit card and DON’T use it until you have a cashflow issue and you need to pay salaries before you get paid by your client.  Pay it all back as soon as the client deposits.

* Don’t employ staff until you absolutely need them. You can save costs and do a lot yourself before you saddle yourself with overheads.

* Get a business mentor: someone who has walked the same road you are starting on.

* Read Allon Raiz’s book: What To Do When You Want To Give Up. It has a lot of simple and practical steps to give you a road map around “what’s next”.

Get in touch with Jules Newton from Avocado Vision via email: jules.newton@avovision.co.za, visit: http://www.avovision.co.za or follow her on Twitter: @Avojules.