Lebo Madiba: Business is about making money, and if you are not, you are just collecting rent.

9/09/2016


Lebo Madiba is a communications expert with nearly 20 years’ experience in the field. She is founder and Managing Director of strategic communications agency PR Powerhouse. She founded the company in 2011. She is also a graduate of the GIBS Goldman Sachs 10 000 Women Entrepreneurs programme. She shares lessons she's learned along the way in her entrepreneurial journey.

Tell us a bit about your business and what motivated you to start?

I own and manage communications and public relations agency, PR Powerhouse. We are a full service agency offering corporate communications, stakeholder relations, media relations, crisis communications, reputation management, social media and branding services to clients in the hospitality, pharmaceutical, technology, engineering and manufacturing sectors.

How did you raise your start up money?

I had no start-up capital. I opened the business bank account with R1000.00 and that’s all I had until my first invoice.

Did you write a business plan? Was it an effective tool for you?

My business plan only followed in the second year of the business. I needed to get my feet into the business and understand the nature of  the‘beast’ before writing the business plan. When I eventually wrote it, it was more of a five year plan, that focused on the growth that I wanted to achieve for the first  five years of the business. Now that we are on year five, I am re-looking the business plan and charting our next five years. The tool is effective if you write it yourself instead of making use of the services of a consultant and if it is practical, because only you know your own reality, and your ambitions for the business.

Who did you hire to help you with your business - bookkeeper, an accountant, lawyer …? Would you suggest others do the same?

 I advise that in the first few years of your business, it is essential to be you own accountant and bookkeeper as that gives you a very intimate knowledge of your finances. Lawyers are important to ensure that you are protected in the contracts that you enter into. I hired an accountant too soon and trusted them with my books, a situation that got me into heavy tax issues which took more than a year to iron out. It was a hard lesson to learn. I had to make sure that I knew the credentials of the next accountant I hired, and also ascertain their credibility to ensure that I do not end up in similar situations again. Although I do have the services of the accountant, I am very involved and am always on top of our books / finances.


Have you outsourced any portion of your business? And has that worked for your business?

The accounting service is outsourced. It did not make business sense to hire a full time accountant and or bookkeeper. We run on a very lean structure to ensure that we have good control of our overheads. We outsource some elements depending on project requirements.

What have you done that has been very effective in helping to grow the business?

I did not chase fast growth. I took my time to understand the space that I operate in, and spent the time also building our reputation in the market, and ensuring that we produce the kind of work that speaks for itself, and hence our growth has been driven by referrals.

How do you effectively manage the finances of your company?

Tightly. The business operates on structure and systems. We have a very effective financial report process and system that ensures that we bill our clients on time, we collect payments from clients, expenses are monitored constantly, etc.

Do you have rainy-day savings for your business?

This is essential! In the kinds of trade market that we operate in lately, it is important to safe guard the business for when the chips are down. We have enough to keep us going for a few months.

With the current economy slump, what cost saving tips would you share with new entrepreneurs?

Be careful of unnecessary expenditure. Continue to add value through the services or the products that you provide. Clients will pay for value even in an economic slump. The slump is also an opportunity to for entrepreneurs to be creative and innovative, as one of my client says ‘never waste a crisis’!

What advice can you offer female business owners on making sure they're being compensated fairly for their work?

I have never sold my business as a ‘female owned’ business. I am a business owner that is looking for fair trade, I sell myself on the strength of my capabilities, and the services offered by my business. So compensation for me is about value, not gender.

 Do you have business mentors, and if so, how have they helped you develop as an entrepreneur?

I have a mentor, who is a successful entrepreneur with businesses listed on the JSE and also happens to be one of our clients. I first started by emulating him and the way he does business before I walked myself into making him my mentor. He has helped me remove emotions from business, has inculcated in me that business is about making money, and if you are not, you are just collecting rent. I have also taken from him that businesses are about processes and systems, and about people i.e. surrounding yourself with good people, who will serve the business well if they are well looked after.

What have you learned from starting your company that might be useful to would-be entrepreneurs?

There is no template to being successful in business. It can be a really tough and lonely journey and needs people with perseverance and the will to succeed. You also have to be in it for the long haul because sometimes success is not overnight…as another client of mine has said most people don’t realise that an overnight success is 10 years in the making.

Follow Lebo on Twitter

Picture Credit - Jeremy Glyn

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