Expanding your business without spending a lot of capital is important as too many fixed assets can cripple an otherwise healthy business.
This was the advice given to Norman Legoale by seasoned entrepreneurs on this week’s episode of It’s My Biz, a weekly show on e.tv sponsored by Nedbank.
Legoale is a co-founder of fast-moving consumer goods company Tomoso, which supplies rural and township firms. He said he hoped to grow the product range and footprint of the business, although he found warehousing problematic.
Dave Evans, the chief executive of ice tea producer BOS Brands, pointed out that owning a warehouse could be complex and only serve to distract him from his core business.
He suggested renting a site instead, which would allow the business to expand in an “asset-light” manner.
Ndaba Ntsele, the chief executive of Pamodzi Investment Holdings, urged him to consolidate by operating in a few centres of economic activity, such as Johannesburg, Cape Town and Durban.
Tomoso operates in eight of the nine provinces.
Ntsele advised Legoale to move out of the warehouses of his former employer as it was limiting the type of stock he could keep on hand.
He added that there were opportunities to engage with the Department of Trade and Industries to make use of old and unused warehouses in various places, including Kwazulu-Natal.
Tom Boardman, a director of companies including Nedbank and Woolworths and the founder of homeware store Boardmans, said Legoale must be vision-led and value-driven in his approach to expanding his business.
It was important that Legoale’s strategic approach to his business be informed by vision and value.
The show, which airs on e.tv at 5.30pm on Thursdays, profiles entrepreneurs who are looking to take their business to the next level.
- Business Report is the media partner for the show.