Thank you to FNB Business for inviting me to share the Majozi Bros Story at eyadini lounge as part of Global entrepreneurship week. What an honour to Share a Stage with Siphiwe Ngcobo the founder of ilawu Group. What a pleasure to meet the man who’s rewriting the rules of the hospitality industry! #MajoziBros#BuildingDreams#gameChangers#TBE#RainMakers#PropertyDevelopers#BlueChipInTheMaking#BeastMode#BillionRandCompanyInTheMaking#EmpireStateOfMind#Black excellenceinBusiness#Not B.E.E#Hardwork#silentDominence
DESTINY MAN: How two KZN entrepreneurs defied the odds and kept their business going
November 13, 2017No comments
Just when Simphiwe Majozi and Sihle Ndlela were beginning to focus on their construction firm in building houses in different townships in KZN, their business abruptly dried up. However, the pair refused to give up.
The two young entrepreneurs had to be innovative in seeking ways to save their business. At the time, they retrenched some of their employees, sold some of their vehicles and concentrated on closing down their business. “Lots of clients dried up and we weren’t doing any work. We ended up cutting our staff complement and selling some of our vehicles,” said Ndlela.
The pair then discovered a plot of land in a Durban township that was selling for R15 000. “We only had R15 000, so we decided to buy the plot, build a house and sell it. We sold the house and realised that you actually make more money dealing with private clients,” he said.
They then decided to look for more plots and do the same thing, but they couldn’t find enough land for a proper business in the township. They then decided to venture into residential estates, as they discovered that there was a huge demand for houses in this sector.
This was due to the high rate of crime in KZN – most people wanted to stay in areas where they would feel safe. The problem Majozi Brothers Construction had was that the large plots needed for estates sold for R1 million upwards – far beyond the company budget.
The entrepreneurs had to seek and convince investors to help them improve their business. “Residential estates are a different ball game. We were two black guys in our mid-20s – we didn’t have a million lying around and didn’t have experience building similar houses,” he said.
Before convincing the investors that a job could be done, these entrepreneurs had to prove that they deserve funding in a business dominated by whites and Indians.
“Black contractors have a bad reputation. They have been unprofessional and produced shoddy workmanship and now we’ve all been painted with the same brush. We had to prove that we could deliver,” Ndlela said.
Although the two found a way to finance the plot, the estate wouldn’t let them build. It took them a while to convince clients and investors, as they had negligible industry experience.
“The first house was challenging because of teething issues, but afterwards, the estate started seeing that we deserved a chance,” he said.
They approached industry giant WBHO Construction to ask for assistance in terms of developing systems and controls for their business. WBHO was impressed and asked them to join its enterprise development programme. They are currently partners with the firm on the multi-million-rand upgrade of the Gateway shopping centre in Durban.
“WBHO believed in us when no-one else did. Our relationship is a catalyst for skills transfer and capacity-building so we can independently execute our own projects on the same scale someday,” he said.
“While at Gateway, we spotted a gap in the market involving the hiring of small tools. These tools are actually cheaper to buy and make for a quicker investment – we couldn’t keep up with the demand.”
Majozi Bros intensified its business relationship with Hire-It Natal – instead of buying one or two tools at the time, the pair sought a way to partner with the firm.
“We approached them and after a lengthy discussion, decided to buy a stake in their business. They formed a joint venture and retained a 51% stake in the company. We shifted the proportion and started to focus more on the commercial market,” he said.
Majozi Bros has diversified its business and focuses on different segments of the construction market. The challenges the duo encountered earlier in their business venture have taught them that one should never keep all one’s eggs in one basket. At the same time, diversification needs to be strategic and closely related to the core business.
“So it’s all about diversifying, but within the same industry. We no longer specialise in one segment of our industry, but we have used our brand in the market to diversifying our service range in order to mitigate our risks and our market exposure,” Ndlela said.
He said they were avoiding what almost happened to them when they were building houses in the township.
The company plans to expand within the construction sector and complete commercial developments like the Gateway expansion project.
“We are learning as much as we can from WBHO Construction so we can stand on our own feet and do our own jobs at some stage. Our ultimate goal is to become developers in our own right and build the biggest property group in Africa,” he said.
For now, Majozi Bros is focusing on KZN until it has the capacity and cash flow to compete with big companies in the country.