It turned out to be the opposite of the usual mid-life-crisis folly. After a difficult first year and a half, Naude managed to stabilise the two Total garages on either side of Queenstown in the Eastern Cape and he has never looked back since.
Best of all, he achieved what he set out to do when he decided to sell the financial brokerage which he started in the late 1970s in Queenstown. “I was 54, and no longer interested in doing the same thing every day. I wanted to do something different, and I wanted to put into practice some of the advice I had been giving business people all along.”
Naude says as a man of faith he somehow always knew that he would one day own the service stations that he had been using as a customer for the best part of 25 years. “As the time drew closer I asked the then owner if he wished to sell. He was adamant that they were not for sale. A week later he called to say he wanted to sell.”
Naude’s success at turning the two filling stations around showed that the business wisdom that he had been dispensing all those years was sound. But has he learnt anything new in the process that changed the way in which he would advise business owners today?
Yes, says Naude, there had been subtle changes to his perspective. For example, he had never been a fan of keeping too much cash in a business, and he used to advise his business-owner clients on ways to squirrel as much of it away as soon as possible.
Today, he still believes in the principle, but his idea of what constitutes too much cash in a business has changed. He realises now that what a financial advisor might view as cash lying unused in a business account, an entrepreneur sees as a crucial buffer against the waves of misfortune that can strike at any moment.
In the case of a garage, setbacks can come in the form of a municipal decision to set up road works right in front of the business, or a sudden instruction from the franchisor that it is your turn for a revamp of the forecourt.
Naude has also had to adjust his views about franchising somewhat. In theory, the franchisor and franchisee work in tandem, with both making more money from the synergy. In practice, however, decisions tend to be more one-sided, with a disconnect between the thinking at the corporate head office and what happens on the ground at the level of the franchisee’s outlet. Naude says this goes for all franchises, not just the group into which he bought.
The greatest adjustment that he has had to make, however, was dealing with a much bigger work force. At his brokerage he managed four staff members. At the two filling stations, he has 74.
Things were difficult in the beginning for Naude, because the previous owner had relaxed some of the controls over the staff members in the months before the change of ownership. Within the first four months of his ownership, the number of misdemeanours by staff members fell by 70 percent as Naude reasserted control.
In the process, he learned the importance of ongoing staff motivation. “I used to think all you need to do was to give a guy one pep-talk and he was good to go. I didn’t realise the extent to which you have to motivate them daily,” he says.
After selling his brokerage, Naude was a third short of the money that he needed to buy the business. He did not want to liquidate any of his investments, so he had to raise the finance.
Because of his extensive knowledge of the financial industry, Naude decided to sidestep the banks completely, and went straight for Business Partners Limited (BUSINESS/PARTNERS).
“The banks view a business with blinkers on,” says Naude. A bank loan is almost an abstract paper exercise disconnected from the real world.
In contrast, says Naude, BUSINESS/PARTNERS may be a bit more expensive, “but what you get is a business partner. They send you a specialist every now and then to come and help you, and they bring you advice about what other garages are doing.”
Naude managed to pay back his five-year loan in three years.
Today, both garages are thriving. Naude shares the management of the enterprise with his wife Elise, who apart from directly managing one of the garages, does the administration of both. Naude himself concentrates on the other garage, and manages the finances of both.
In a regulated industry such as fuel retail franchising it is difficult to plan wider than the next revamp and the next industry strike, both of which is due in the coming year. But with his years of business wisdom, enriched by his steep industry learning curve, Naude is ready for them.
Naude views his ownership of the business as a form of stewardship. “Nothing really belongs to us. We are only granted an opportunity to manage and care for things and we had better do it well because one day we will all give account for what we have done with what we had been given. It’s not just about the money,” he says.
So how about that red sports car? “Not yet,” laughs Naude, “Perhaps when I’m closer to eighty and hit a late mid-life crisis.”<