Read this thought-provoking and inspiring story by Nomphelo “Lelo” Ndzimela.
Nothing sets your soul on fire and at the same time makes you break into a cold sweat than the prospect of throwing all caution to the wind and starting your business venture.
By 2015, the first business that I started working on full-time in 2014 which is in Public Relations and Events was taking off. Business was good, I had a steady income stream and I was working with exciting brands. It was at this point that I started thinking about how to make my money work for me for a change and not the other way around.
A friend of mine (at the time) had been retrenched for well over a year and was looking at ways to invest her savings into a venture that could secure hers and her son’s future. During a casual visit, the conversation steered to our combined desire to invest in a business venture. My initial thoughts were to invest in a restaurant, or in my favorite pizza franchise. Even a quaint coffee shop as I have always fancied myself as a closet foodie.
Fast forward a couple of weeks later and she had convinced me to invest a heavy sum of money into a new fast-food franchise. At the time this franchise was the talk of the town. Like all franchises, this required a hefty investment and it left me with an uncomfortable feeling in my gut which I interpreted as fear. To me this was normal due to the magnitude of the leap I was about to take. I am the type of person that likes to consult a variety of people on big decisions, and so as per normal, I consulted my mother. She seemed skeptical but gave me her blessing.
I also consulted an acquaintance who is a business owner and lawyer who point blank told me not to do it. This caused a rift in our relationship as I questioned his intentions and attributed them to him always seeing me as a child chasing yet another pipe dream. He is the type of person that never took my aspirations to be a businesswoman seriously. He always saw it as a “hobby”, and I had no business trying to work with men as all they would see when they saw me is “strings attached” to every deal I tried to secure. I will not lie this has happened a few occasions and I have walked out of many meetings as soon as they turned to personal advances.
Nonetheless, I chose to proceed with the purchase and invested more than 90% into the franchise. Throughout the process of getting the paperwork done and countless meetings with the franchiser that uncomfortable feeling in my gut was always present like a shadow. Still, I continued to ignore it.
A year later, we were forced to shut down by the landlord as we were no longer able to pay rent and nine people lost their jobs a mere two weeks before Christmas.
Three years later, I am still liable for my ex-business partner and friend’s debt for the failed venture. Even though I have settled my share I am liable because of contracts that jointly bound us to the business and its debt regardless of the fact that I am no longer a shareholder in the entity. During this entire process and having gone through lawyers, being blacklisted and being threatened with legal action, I lost just under a Million Rands from one bad business decision. Money that I had earned through many sleepless nights, time away from my family and a host of other personal sacrifices.
A lot happened in-between to get to the closure from theft by staff, a failed business model by the franchiser who turned out to have a seedy past to my ex-business partner misusing company funds.
It was a very expensive lesson financially, emotionally and health-wise.
At that time, I was in my early thirties, 165 cm tall and weighed a ghastly 50 kg from a voluptuous and healthy 60 kg. That year when I finally went home (and typical of black families), every family member at every gathering that December pulled me aside and asked me in shock, “Yhu, uziva ka kuhle sisi?” (Are you okay”?) which we all know is code for have you contracted “the disease”. Weeks later, I remember my mom joked that she was amazed I never got committed after all that I went through in a space of 12 months.
The Lessons I Learnt
- Always listen to and follow your gut – that uncomfortable feeling is there for a reason. It will never steer you wrong. Differentiate fear from your gut warning you of a wrong decision. Do not mistake the two. There is a BIG difference!
- Never, I repeat Never go into business with a person that has less to lose than you. This precious gem was given to me by my lawyer and I use it constantly.
- Always do your research – do not be blinded by the prospect of making money and early retirement in a lavish villa in Italy. Take your time and research every new venture not just its profitability but every minute detail, down to the people you will work with.
- Try to keep away from going into business with friends and family especially if; your gut tells you not to, if you do not share the same values and if they have less to lose than you.
- Be clear about roles, responsibilities and expectations – before going into business with a partner, understand what will be required from the both of you in order to make the venture a success and firmly hold each other accountable. Go as far as putting this into a legal document.
- Never sign any contract without having it thoroughly explained to you by your legal representative.
- Go into business objectively – if you operate from a place of subjectivity you will fail every. single. time. Never run a business using your heart, this will cloud your judgement to the point that you will let too many things slide and eventually run your business to the ground.
- Know when to pull the plug – keep a close eye on daily operations especially at its infancy stage. If you have exhausted all avenues to keep it afloat and you are continuing to run at a loss month after month, be objective enough to know when to cut your losses before you incur further debt that you might not be able to recover from. If it survives for at least three years with a healthy income flow, congratulations, you have a winning formula!