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

Michael Gullan: Don't underestimate good PR

Michael Gullan, Gullan&Gullan Advertising

In 2004, Michael Gullan made the leap into entrepreneurship by starting his own advertising agency, Gullan&Gullan Advertising (Pty) Ltd with a business partner. Their start-up capital was R100 000 and the pair were based out of Seattle Coffee Shop in Hyde Park Corner Shopping Centre in Johannesburg until they won their first client – Vespa – who they still have as a client today.

Have you always been entrepreneurial or is it something that’s grown over time?
My father is a successful entrepreneur and one of his ventures was an advertising and public relations company. As a child, I used to spend time playing in the studio of his agency. I knew then that I wanted to own my own agency. 

What kind of planning went into starting your venture?

When we started our agency we had no formal business plan. We formalised things a few years into the business. We started with a clear vision and mission of the kind of clients and work we wanted to attract and then went out and found it. That said, for a business-to-business service industry, I can’t see how too much of a technical business plan is relevant or helpful to charting the way forward. What is important is understanding your core offering and point of difference, positioning against competitors and mapping out your financial goals, and then making sure they are met. 

What was your big dream for your venture? 

We originally started the business as Guerrilla Marketing and our niche was to offer clients smart guerrilla marketing tactics and strikes that would have a maximum impact with tighter budgets. This positioning was limiting in that the bigger corporate brands were not interested in guerrilla tactics and so we struggled to make inroads for our full services agency. This is when we made the decision to rebrand Guerrilla Marketing as Gullan&Gullan and developed our proprietary brand-centricTM methodology. 

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

Identify sectors that you have some background experience in, as you will be able to add value and have an intelligent conversation when pitching your services. Target these sectors first by calling key decision-makers. Be sure you have smart and good quality supporting sales and marketing brochures, emails, business cards and website in place so you can communicate with them from multiple angles. What I always recommend is PR; there is nothing more effective for brands and businesses than some good ink, even more so than traditional awareness marketing. It comes with the journalist and media endorsement, and has much more gravitas. 

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

A SWOT analysis would be the obvious answer. But for a start up it’s prudent and important to know what you’re good at and amplify that. Be sure to interrogate your competitors and focus on being strong where they are weak. Also, without sounding too idealist – if you can do what you enjoy and are passionate about, you’re more likely to excel at it. 

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

Pricing your product or service is one of the most important considerations. You need to research understand what your main competitors are doing. And have a clear set of objectives. Do you want to drive volume? If yes, then you should be priced competitively. Do you want a quality positioning? Then you should be charging a slight premium. Are you providing a luxury service; then you should be charging substantially more. Remember the general rule of thumb: The more expensive the more you have to invest in marketing.

What was your most epic fail in the early days? 

Positioning ourselves as a guerrilla marketing agency for clients with small budgets – our own growth potential was limited. The rebranding to Gullan&Gullan was the best solution, we moved offices, rebranded, developed our brand-centricTM methodology and got a bunch of PR and we never looked back. 

What are the two most common mistakes that new entrepreneurs make in their first three years of business?

Choosing the wrong business partners out of financial necessity – it is so difficult to get out of an ailing business partnership so rather don’t have partners or go, instead, into a partnership where the skills are complementary. Hiring cheap staff is also fraught – pay peanuts and get monkeys – so be prepared to pay the price for experience and expertise in key-areas of your business. 

How do you keep yourself motivated? 

I am a member of the Entrepreneurs Organisation (EO) and can always pick up the phone to any one of my fellow members and ask for advice or just a coffee to download some of my frustrations in a safe space. 

Do you have a mentor? 

A mentor is one of the most important assets an entrepreneur can have. I have my father who has successfully built a number of businesses, but he travels for half the year so is not always accessible day to day. Mostly, I draw on his grace, wisdom and in challenging times think, “What would my dad do?” My partner, Desiree, is also a mentor and helps me see and understand things from a viewpoint I don’t always see. 

How long does it take for a venture to get off the ground? 

In my experience there are no overnight successes. Even when you hear about a business that became an instant success, I can guarantee that there was at least five to 10 years of history of plugging away. So give yourself at least three years to turn a small profit and at least five to 10 years to achieve your success goals. You should always be looking at ways to improve your offering. People, behaviours and business changes too rapidly for any company to stagnate. The old adage “adapt or die” is too true! 

Is it ever alright to give up on a dream? 

Yes, when your dream becomes a nightmare, you need to wake up and smell the coffee. Then take a deep, honest look within and if need be let go of your dream and cut your losses quickly. Then take the time to learn from your mistakes and apply your learnings to your next dream. 

What’s your life motto? 

Family first. Everything else second. So whatever decision I make, I ask “Is this to the benefit of my family now and in the future?” 

Which three character traits do all entrepreneurs possess? 

A healthy appetite to take risks. The ability to function on little sleep. Being ok with making mistakes. 

If you could give yourself any advice when starting out, what would your top 5 wisdoms be? 

* Hire people smarter than you. 

* Be sure you have enough start-up capital. 

* Be clear about your positioning in the market. 

* Set realistic goals, write them down and have an action plan to achieve them. 

* Embrace change. Business is dynamic and the ability to adapt and change with the business is key to success. 

Get in touch with Michael Gullan from Gullan&Gullan via email: michael@gullanandgullan.com, visit: www.gullanandgullan.com, find him on Facebook and on LinkedIn. 

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.

Denvor Phokaners: Know your stuff!

Denvor Phokaners, Enterprise Development Essentials

Denvor Phokaners has entrepreneurship in his blood, having owned successful businesses since 1997. His latest venture is a company called Enterprise Development Essentials, which he started in 2010 with his last paycheque and a virtual office. His focus? Helping corporations increase their profitability through supplier and enterprise development, while creating jobs in South Africa.

Have you always been entrepreneurial and did you have a business plan?

I’ve always had an interest in working for myself and have been relatively good at selling and promoting my ideas, which are fundamental traits in any entrepreneur. I started my first business in 1997 as an insurance broker for Fedsure and Momentum Life, which I ran successfully for five years, but then went back into full-time employment. I stepped back into entrepreneurship in 2010 with a basic outline of what I wanted to do – I regret not having a tighter plan, but I was trusting in my own abilities, which can land you in very hot water! Successful entrepreneurs learn to go with their gut and I guess that’s what I did.

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

If you don’t network with potential clients or market your products, you don’t exist. You need to first find out who your clients are and where they’re located, then what their needs are, before you venture into your business. Your product and service offering will dictate who and where you’ll find your clients or customers.

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

You need to know what your competitors are doing and, most importantly, what they’re NOT doing. You can build a strong business around that key difference. When it comes to costing your offering, people don’t buy on price, they buy on value. They will buy anything – even pay anything – for something they find personally valuable.

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

They believe that they know everything and become complacent after a few big deals. Then they take their eye off their finances!

What three character traits do all successful entrepreneurs possess?

Tolerance for pain, commitment and creativity.

What’s the motto you live by?

If you can’t sell, you don’t have a business. If you’re not networking, you don’t exist. And if you don’t know your numbers, you don’t know your business!

Do you believe in internships for your business?

Yes, internships can work, provided you know what you’re getting yourself into. You need to know your intern’s strengths and weaknesses and why you’re taking them on in the first place, so you need to have a clear strategy on what their value-add will be. Then, ensure you’ve done comprehensive reference checks. An internship is very much a “you scratch my back and I’ll scratch yours” relationship. They need the experience; you need the resource but can’t afford the full salary, so never take advantage of an intern and make sure you’re not just giving them something to do – rather groom them for their future career.

If you could give yourself any advice when you started out, what are your top 5 wisdoms?

* Be careful who you make your partner. S/he could potentially ruin your business and reputation.

* If you can’t sell, you don’t have a business. If you’re not networking, you don’t exist. And if you don’t know your numbers, you don’t know your business!

* Service is EVERYTHING.

* Know everything about your business.

* Employ smarter people than yourself.

Get in touch with Denvor Phokaners from Enterprise Development Essentials via email: denvor@edeonline.co.za, visit: http://www.edeonline.co.za, find him on Facebook, on Twitter: @followede and on LinkedIn: Denvor Phokaners.