For Tshepo Phakathi, entrepreneurship is about more than just making money, it’s about changing lives.
This is the mission that Phakathi has spent the better part of his working life focusing on.
Phakathi is a serial entrepreneur, and a development specialist whose enthusiasm for entrepreneurship borders on obsession.
He mentors thousands of young aspirant entrepreneurs and has coached more than 2 000 startup founders, some through his initiative, KAELLO, a business mentorship hub he founded, offering advice and mentorship to entrepreneurs.
Phakathi, however, understands that entrepreneurship can only help to solve South Africa’s unemployment and economic woes if South Africans start building businesses that can actually survive and eventually scale. That is why he is eager to share what he has learnt in his many decades as an entrepreneur.
Currently, Phakathi is group CEO of Phakathi Holdings, an investment holding company with interests in privately owned companies in various sectors ranging from transport to education, finance and IT. He is also the founder of Phakathi Capital, a corporate finance advisory company which he launched in 2001 at the age of 17.
Phakathi shares 7 big business lessons that he has learnt successfully running businesses, and what he wishes more South African entrepreneurs knew about the reality of running a successful business.
1. FOCUS
I have learnt that I must build a trade and then spend time perfecting it. If you dabble, your competitors will take you out. The level of competitiveness you must achieve just to survive, let alone thrive, in business requires that you become among the best at what you do, this infers that you must focus. In any event, if you can’t make money in your own trade you’re even less likely to make money in a different one.
“It is far more profitable to concern yourself with customer retention
than customer acquisition “
2. UP-SKILL
The world has become far more complex and consumers much more discerning. The moment you think that things are set-in is the moment they change. This rapidly changing environment, supposes that entrepreneurs must change even faster. This requires a constant update and refreshment of my skills together with those of my team. If I keep getting better, then all things keep getting better.
3. STRATEGY
Decide who you are, what you want to do, where you want to play and how you are going to win. Then discard everything else. I have learnt that things will always take longer than I think to materialize and as such I must stick to my strategy long enough to see it to fruition. The strategy must itself be based on sound analysis of both the internal and external environment to the business.
4. BUILD DYNAMIC CAPABILITIES
Our ability to execute on a strategy depends on our capabilities. However, because the market is in a constant state of flux, we need to keep reconfiguring our capabilities to adapt to the changes around us. I’ve learnt that we must do this by keeping an eye not only on our human and financial capital, but also on governance and social capital.
5. HIRE RIGHT
I have learnt that hiring the wrong people carries a cost far greater than that of hiring much pricier but more suitable people. This requires a balance between qualification, experience, personalities and values. The starting point is to define the job and required skills for it well. Then to couple this with a clear and measurable performance agreement.
6. CONSISTENT DILIGENCE
Most people don’t have a problem working hard in short bursts. My experience has been that to succeed at a high level requires a diligence that is enduring over a long period of time. Even after 16 years in business I still find that nothing can replace working hard and that you can almost always outwork even those whom you cannot outsmart.
7. NEVER FORGET WHO IS KING
There is much wisdom in the premise that the customer is king. It is far more profitable to concern yourself with customer retention (retention cost) than customer acquisition (acquisition cost). I’ve learn that the sure way to set yourself back in business is to allow it to lose customers, particularly when you lose customer due to under performance, as you are unlikely to get them back. Treat every customer as if they were your only one.
Catch Tshepo Phakathi at the upcoming Small Business Expo and #BuyaBusiness Expo in Johannesburg 8 – 10 September.
