CONVEYOR & SILICONE SUPPLIES 

BUSINESS CASE STUDY

Case Description

C&SS is a small manufacturing firm based in Boksburg. The business has been operating for almost twenty years and over time has acquired the occupancy of two industrial spaces.

Since inception, the business owners understood the importance of growing the business which would require ensuring a consistent regular monthly revenue and meeting customer demands. To this end, the business operates on sound financial principles and makes a reasonable profit.

Clients range from small to multi-national corporates and the business primarily concerns itself with the business-to-business environment. Profits are shared annually on a 49/51 ratio between the owners respectively.

Margins are set at an average of 50% and finances are managed against stringent budgets. Costs are kept to a minimum, thus ensuring a healthy cash flow in the business.

Although they would like to expand the business, expansion needs to be considered carefully and with have high cost demands. As such, the business has identified an opportunity with an existing multi-national client to expand.  

The Challenge 

The business owners are very conservative in their managerial methods and rely on dated systems and processes to govern and navigate the business operations. The perception is that this gives them a sense of control and lowered risk of a technological let-down, thus making them very effective but highly inefficient.

Although the business operations are slick, systems can be improved to reduce production time, particularly with regard to upgrading some of the equipment. A strategy is therefore in place to purchase new equipment in the first quarter of 2019, thus improving operational efficiencies.

Marketing traditionally was limited to subscribing to the yellow pages and a digital directory called Ezee-Dex. A first undertaking of the coaching was to develop a company website in support of future marketing initiatives.    

The Business Background

Conveyor and Silicone Supplies CC specialises in supplying conveyor belting. The belting is imported on rolls and manufactured according to client’s specifications and requirements at the company’s small factory in Boksburg. Belts are either delivered and installed for the customer at their premises or supplied only and fitted by the customer’s own technicians. 

Some of the industries the firm supplies include soap manufacturing, the food industry, beverage industry, asphalt, and top surface mining industry.  The business is co-owned by two owners who started the company in 2000, after the liquidation of a previous company where the two owners were employees.  

Daily operations are undertaken by the two very competent owners – Peter Rabeenanun and Arwin Jugamahon, who collectively have over 20 years’ experience in the industry. The firm employs four technicians who have been with the business since the start. They are responsible for splicing (making up) and fitment of the belts. The business owners each have their son’s working in the business, who together are responsible for sales and customer relations.

The Business, Before The Program

The general state of the business was fair at the start of the programme. Processes and systems were all in place and functional, although there was room for improvement especially through the use of technology and updated equipment. This would substantially improve and increase efficiencies in the business, thus increasing the capacity the business must take on in order to deliver more work. Traditional beliefs of good customer service and pricing, also the ability to deliver a same-day service/or a turnaround time of 24-hours, would distinguish them from their competitors. 

In September 2018 the business was also approached for an opportunity by one of its suppliers, whereby they would be able to acquire a takeover of their components supply division. This meant that the business would need to raise a substantial amount of capital and clearly understand the risk associated with such an acquisition over and above.  Significant work was conducted by Siyakha Capital Advisors in presenting a comprehensive, accurate but easy-to-understand brief on the financial implications should C&SS go ahead with the acquisition. Due to the risks involved, along with the implications illuminated by financial projections, the company decided not to go ahead with the acquisition.

Goal Focused Interventions

The business historically relied solely on word of mouth and repeat business from existing clients thus, having a clear marketing plan and budget was not deemed a priority. After understanding the risks of not marketing the business, the first intervention undertaken was developing a marketing plan. This included creating an online presence by designing a company website, setting the business up to attend expo’s, designing a company brochure and profile with an updated logo. 

Spending time with the sales team was also fundamental to ensuring that strategies to grow the client footprint was achieved. In addition, prepping the sales team to be equipped for attending trade expo’s as they have never been exposed to this method of business development. One of the bigger interventions over the coaching period though, was to assist the business with a due diligence exercise for an acquisition they were in discussions for.

The opportunity presented comes from a long-standing relationship with one of their existing suppliers. The opportunity presented meant the business would be exposed from a cashflow perspective, with limited to no returns for the first four years and no guarantees of exclusivity of supply. After a thorough interrogation of the numbers by a specialist team at Siyakha Capital, the business owners realised the enormity of the risk and none viability, thus withdrew from the opportunity.

Obstacles

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Business Owners lack of availability as the main participant

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Underestimating the demands of weekly engagements

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No weekly allocation of time dedicated to business growth

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Time management for implementation of strategies

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Lack of defined goals and outcomes

Solutions

Work according to clearly mapped and guided objectives

Set weekly routine engagements

Identify weekly goals and outcomes

Cultivate new business habits with time for growth

Set weekly goals with defined outcomes

Response to Program

Despite the fact that the business owner was in his mid-sixties, he was quite receptive to learning. More particularly, he was always open to an outsider’s view into the business and where the business could make improvements. As a result of his daily involvement in the operations of the business, he was unable to attend any of the training sessions scheduled by Siyakha. However, a representative of the firm was always available to attend where possible. Despite this, Peter was always keen to catch up on the key principles of the training and how this related to the business.  

Learning & Retention

Although the business owner was not able to attend the training sessions personally, the impact of the training on those who did attend was visible in their changed behaviour and the application of their learning. For him personally, the interventions if the coaching engagement sessions helped improve his understand around issues of compliance, labour relations and customer relations. 

Changed Behaviours

The business owner became more assertive in his approach as well as ensuring to ask the hard and uncomfortable questions. Holding people accountable, particularly the sales team for their targets, thus ensuring that the vision to grow the business is achieved. Being engaged in the entire business and more so from a proactive point of view is now important to him. Below summarises Peter’s view of the programme.

Prior to the programme I believed I had it all under control. But one is never too old to learn

Impact On The Business

The impact of the programme on the business has enabled the business owners to have better insight into the general management and operations of the business. More specifically, refining some of the HR processes by implementing job descriptions and introducing KPI’s, identifying operational inefficiencies and being able to make relevant changes, conducting structured monthly board meetings to discuss business performance and risks in the business, being open to the use of technology to market the business using a website and being more structured in managing the sales has added an immense amount of value. This is evident in the business’ performance measured over the programme period as follows:

Growth In Profit

Growth In Jobs

Growth in economic participation

Changed Behaviours

A key outcome to the Siyakha programme was the need to formulate and draw up a business plan. This process intensely involved the input and involvement of the business owner and relied on lots of information from the business owner, in order to successfully complete the business plan. On completion of the business plan, the management, goals and future direction of the business over the next six months is clear, providing guidance and measurable outputs. With the guidance and support derived from the process of compiling a business plan, the business owner has a clearer understanding of the value, importance and guidance a business plan can provide for the business in the future.     

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