Friday, January 16, 2009

Why now is a great time to start a business

South Africans everywhere are utilizing their entrepreneurial spirit and starting new businesses that work. In a recent interview, Leon Stolz, now residing in the US and founder of the upmarket potato chips brand, Potato Finger had the following to say:

Q: So this is the best time to start a business?

A: You know what I sense? It’s like when South Africa changed regimes and [Nelson] Mandela took over and businesses started being open to everybody. I would go into coffee shops and at every single little table, people would be sitting there trying to make things work. I get so excited because I feel all this vibrant energy — from people who get it — that this is the best time to do this. I had a meeting yesterday with two aspiring entrepreneurs who get it — that they can do a lot even in the direst of times.

Q: What about existing small businesses? Aren’t a lot of them hurting right now?

A: Businesses fail for many different reasons. I don’t think many small businesses have really felt the pain yet. However, we’re really afraid of what’s going to happen, so we all work harder and we work longer hours and we’re more creative. I’m not discounting all those people who have lost their jobs, but even for them, it’s a great time to go and start a business and help the economy. You can only trust yourself.

Q: What are some successful strategies for small businesses in times like this?

A: It’s great to have a small business. Things can get very tough, and that’s one of the biggest reasons you have to surround yourself with a support group, to give you advice and people who can cheer you on. Also help people when they are growing their businesses. Then, where are they going to go when they need another project done or another module done? They’re not going to go to someone else. They’re going to go to the people who got them started.

Q: And that’s the idea behind Idea Ocean, isn’t it? Entrepreneurs helping other entrepreneurs, for a fee?

A: I pull in everybody that’s necessary to make a product work. We basically cover our administrative costs. Idea Ocean is there to help, not build wealth. Sometimes we take an interest in the company, but we don’t do that on a regular basis.

Q: Can you give me an example of what you mean?

A: There’s this product called Hot Squeeze. Sue Sullivan came to us with this idea. She said, “I’m a caterer. I make this sauce. People love it. They always ask me to bottle it.” So we went from sort of a concept through packaging. Helping to set up her business with a strong foundation. …. We helped her with the sales channels, marketing, distribution. This is just making those connections and giving her the support so that she can create the strong base to take her product to market. For me, business is probably 100 percent relationship-based. I hardly ever do business with people I don’t know on a personal level.

Q: How did you learn this skill of relationship-building and getting people to help others?

A: My mom. She told me just to be a good person. Also, Mary Propes [a business consultant and candle company founder] is one of our advisers, and I give her so much credit for helping me navigate the business world pretty much as an outsider. She is just an incredible connector. Everyone on my advisory board is like that. They will do things with no self-interest. On the flip side, when people are so generous to you, you can’t help but try to help them back. I can’t stress it enough. Small business has to stand together and help each other.

Q: Five years along, how is Potato Finger doing? Are high-end potato chips a recession-proof product?

A: As far as numbers now, I cannot tell you anything. We are privately held, and I love it. I can say that more brokers and distributors are working for us now than we have ever had, even with the tough times. We get more distribution every day. If you go to Vegas, you’ll find us there in I don’t know how many hotels. This is the third year we are the Rachel Ray product or snack of the day. We were just featured in Bon Apetit. We recently started advertising with Citadel Broadcasting — the first time we’ve done an ad on the radio — and we sold out in many of our stores after the ads ran. Citadel has done a fabulous job in helping us … and they are an example of how you can be creative in structuring a deal. We got really creative. There’s no way I could just go in there and buy $80,000 worth of advertising in one shot. Yes, pay the standard rate but be very creative about the relationship.

Q: You have another business you’re launching, a Web site called Wazzok. What’s the concept behind that site?

A: I had an issue with American Express, and as a consumer, I couldn’t do anything with it. I couldn’t get a resolution, so I took eight months and built this software package. We bill it as the place where David rates Goliath, making sure consumers get good service. When credit cards change rates on you and you don’t know it, you have one central place where you can say, “I don’t like this.” And we offer alternatives. Our focus is going to be helping smaller businesses get exposure.


If you have a good idea of your own and wondering if it is the right time to start, then why not give it a go? There is only one way to find out if you have what it takes.


Saturday, January 10, 2009

Support for Small Business: Corporate Giants Join in

A recent initiative by corporate giants such as Revlon; First National Bank; the Small Enterprise Development Agency and Microsoft in association with Business Times; Spier Green Capital; Postnet; Gauteng Enterprise Propeller; Free State Development Corporation and Khula Enterprise Finance, saw a number of South African Entrepreneurs walk away with the funding they needed to realise their entrepreneurial dreams.

More than 6 000 business plans were submitted by entrepreneurs from all corners of the country; the competition was themed "Changing lives, Empowering enterprises" and comprised a R50-million price purse.

The Enablis FNB LaunchPad2008 Business Plan Competition required Small Medium and Micro Enterprises from around South Africa to submit groundbreaking business proposals for assessment under 11 categories, including agriculture; business and personal services; construction; information and communications technology (ICT); media and marketing; tourism and transport, among others.

Most entrepreneurs who entered the competition had little chances of growing their businesses into larger scale firms, accessing bank finance or becoming internationally competitive. This was largely due to the lack of basic skills, basic banking, funding, markets and financial services, said David Milligan, the head of growth and new markets for FNB Commercial.

His entity got involved in the competition because, "entrepreneurs of today are the 'big businesses' of tomorrow; supporting them in the present would have a positive impact on the future sustainability of the South African economy".


For news on the 2009 business plan competition, watch this space.