Mzukisi Nginingini says he prayed all the way to the meeting which he saw as his last hope to remain in business: “Oh please God, help me, I need to pay my employees.” It is a prayer familiar to many business owners, including those normally not spiritually inclined.
Nginingini’s problem was that he had won his first major contract, a street-cleaning job with the Cape Town municipality, but could not raise the finance to pay the teams of labourers their weekly wages in the three weeks between the start of the contract and the date of his first payment.
He had tried everything to get the R300 000 he needed. The banks wouldn’t touch him because a credit card went bad while he was recuperating in hospital from having lost his leg as the victim of an armed robbery. Besides, he didn’t have collateral.
He phoned every friend and acquaintance he could think of. He went to his main investor, the labour broking firm ASE, where he had worked before he was shot, but “they were also running their payroll that week”.
It was a Thursday — the day before pay day — when a small business development worker gave him the cellphone number of George Watson, the owner of New Business Finance, a small company that lends money to emerging businesses.
“We sat down and I explained to them who I am, what I do and I also gave them a background of ASE so that at least I could start building trust immediately — that I wouldn’t run away with their money. They looked at the project I had, they looked at the requirement of the business and, you know, it was just so perfect. They gave me the money the same day.”
Of New Business Finance’s high interest rate — they charge up to 44,2% depending on the risk — Nginingini says: “They are in business to make money. They are not running a charity organisation. So you go there with a clear mind — that you will pay interest. I can live with that because I didn’t have a choice. If it wasn’t for him, I would have been out of business. Within 20 minutes, a decision was made.”
He contrasts the experience with his three-month-long frustration to raise finance at two banks. “Time wasted, meeting people for nothing, meeting all these consultants from the bank asking you 150 questions and, at the end of the day, you don’t get what you wanted.”
Months afterwards a bank agreed to an overdraft, but only after Nginingini saved some money which served as collateral.
Today his business still uses New Business Finance from time to time. “Sometimes, when I’m given extra work by the City of Cape Town, I would pick up the phone and say ‘George, I need money’. And he would say ‘let’s sit down and talk’. Between me and him it’s a question of one phone call away, because I’ve built the trust. I’ve never let him down.”
Today Nginingini’s Z&M Recruitment and Labour Brokers is doing business as far afield as KwaZulu-Natal. He and his business partner, Zukiswa Lobola, employ 14 staff members and recruit professionals, artisans and unskilled labourers for the likes of Caltex, Group Five, Sanlam and Petro SA.
Z&M’s story is one where South Africa’s small business development effort seemed to have fired on all cylinders, with entrepreneurial attitude, training, mentorship, BEE and financial support coming together in the right quantities.
While gathering skills in the HR departments of various corporates, including Saldanha Steel, Nginingini did a course in new business management at Muizenberg College.
His brother supported him financially during his convalescence and his last boss, William Rix of ASE, decided to take a 49% stake in Z&M and nurture the company to independence. Such “business angel” investment went largely unacknowledged then, but today Rix would have been able to score BEE points for enterprise development. Government is also introducing a tax break which, had it existed then, would have allowed Rix a deduction of R500Â 000 from his taxable income.
Under Rix’s mentorship, Z&M built up a sizeable database of artisans, professionals and labourers.
The Cape Town municipality took Z&M on as part of its preferential procurement programme.
A business development NGO based at the Cape Technikon provided business advice and referred Nginingini to New Business Finance in his hour of need.
Then there are Nginingini and Lobola themselves, who, as talented middle managers, could have carved out comfortable careers for themselves at virtually any corporate. Instead they chose the difficult route of business ownership.
The life of a business owner is such, says Watson, that someone thinking of starting a venture on his or her own should ask himself: “Can you wake up every night at three in the morning sweating because you’ve got to pay wages and you can’t get money from your debtors. Can you handle it?”