There are many elements to success in business. But some, like hard work, attention to clients’ needs and sheer drive, are universally applicable.
Ciko Thomas, one of four directors of the first 100% black-owned BMW dealership, attributes the success of their 18-month-old business to these and an extra ingredient — naïvety.
That’s right: naïvety. Thomas’s company, Joburg City Auto, is the same dealership that Business Report last week reported as having had a turnover in excess of R190-million for 2004.
“I don’t know where they got that figure from. Success for a new business is that in our first year we made a profit,” says Thomas who would not be drawn into discussing numbers.
Back to naïvety. It helped give a different view of their downtown Johannesburg neighbourhood. “Naivety helps,” he says, “When people tell me that Jo’burg used to rock, I look outside the window and find that the biggest bank in South Africa, Absa, is right on my doorstep. I see South African Revenue Services here. The Gauteng government is here, FNB is here, BHP Billiton and Anglo are down the road and I say ‘wow’. What I see now says this place rocks.”
But before the MBA curriculum is revised to include naïvety, Thomas adds another time-honoured business component: opportunity. “We noticed that there was not one BMW dealership [in central Johannesburg] and saw this as an opportunity.”
All that was before December 2003 when the Joburg City Auto opened its doors. Today Thomas and his partners, Litha Nkombisa, Mzwandile Mayekiso and Mncedisi Mayekiso, are examples of how black economic empowerment (BEE) can work. Nkombisa and Thomas are hands-on executives at the dealership.
As with many new businesses, they struggled to get financing. Thomas is uncertain about what convinced the bank that financed them, FNB, to back their deal.
Three of the four partners were bankers or had worked for a bank, but still it was hard to convince FNB that theirs was a winning ticket. “I remember Tiennie Lategaan, FNB corporate managing director, saying ‘we believe in the jockey, we are going to back the jockey not the horse.
“Maybe one of the things that appealed to them [FNB] was that two of us were going to quit our high-profile jobs. We had something to lose, our livelihood was at stake. We know that arms’ length does not work. We were prepared to put our heads on the block,” Thomas says.
Once funding had been secured, the next task was to sell credibility. This proved to be an easier task.
“There are two things that brought us credibility. Firstly, we are operational,” he says. “The second thing is that we put up our homes as security. I sometimes tell people that I don’t cut my hair because I am bonded from my shoes to my hair. Not a lot of businesses can say that. That buys you a lot of credibility,” says Thomas.
“Black businesses like ours need to succeed for BEE to succeed. The biggest threat to BEE is when we accept that it is about buying a stake [in a white entity]. Our BEE philosophy embraces the notion that black people have to do it themselves, sacrifice something, stand to lose something.”
Which is not to diss the BEE pioneers such as Saki Macozoma, Cyril Ramaphosa and Dr Nthato Motlana, who made their wealth buying stakes in white companies.
“What they are doing is the right thing. Leave them alone. It is not the owners of capital who need to tell us how else we can do this [empowerment deals], it is us [black business people],” Thomas says.
According to Thomas, these businessmen have provided his young company with valuable insights. “I think they are unfairly labeled as hoggers who do not pass knowledge on.”
Joburg City Auto, and all that it means to empowerment, may be a success, but Thomas is under no illusion that the businessmen’s last deal has been closed. With Information Technology Enterprise Connection, founded nine months before Joburg City Auto, already under their belt, Thomas says they will be looking at taking opportunities wherever they arise.
“We don’t own the staples of our existence — maize meal. It is a disgrace,” he says of black people. “We don’t own anything in the value chain from the farm that produces the maize to the miller to the retailer. We do not own the paper the maize is packaged in or the ink used to print the packet.
“Papa Motlana always says that we are busy calling ourselves successes when we [black business] own less than 5% of the JSE Securities Exchange. If we still own just 5% of the bourse, how can we say we have achieved anything?”