Worse, Denyssen was in a vicious circle. His refractory business Uniref, which works with the linings of metal furnaces, was so strained that he struggled to concentrate even on what he was good at, let alone on miraculously learning the art of business rescue.
Just as his business was going down in flames, Business Partners Limited (BUSINESS/PARTNERS) intervened with something that propelled him to a whole new level. Today, Donovan’s Uniref is thriving, with a turnover about to expand by tens of millions of rands.
The one facet of BUSINESS/PARTNERS’ intervention was straightforward enough – a loan to clear the debt, get the tax certificate and land the next contract to survive. But the thing that put Uniref on a whole new growth trajectory was a mentor, in the person of Reinhardt Lohbauer, an experienced entrepreneur, consultant and business advisor who has been mentoring BUSINESS/PARTNERS clients for the past ten years.
How can one outsider, who spends no more than a few hours per month with Denyssen and his team, make such an enormous difference? By imparting some essential financial and project-management skills to complement Denyssen’s world-class furnace and refractory engineering expertise.
“I have never had any business training,” says Denyssen, who first started as a lab assistant in the steel trade in the eighties, and became an expert in the electronics, the mechanics and metallurgy of steel furnaces, including refractory materials. He cemented his reputation as a top expert at Saldanha Steel, where he worked for ten years until 2005.
Ready to embark on a new chapter in his life, he left Saldanha Steel to work for himself, at first as partner in an agency for certain international suppliers to the steel industry. The partnership did not last, and the break-up left him with a lot of debt, which, together with his lack of financial and project-management skills, led to an almighty cash crunch when he started growing.
“With a small team and just one or two projects, you can do it all in your head. But when the projects start increasing, you need systems to manage them all. I didn’t have those,” says Denyssen.
Given the dramatic turnaround in Uniref’s fortunes, Lohbauer’s description of his intervention sounds surprisingly low-key: An initial assessment, followed by a series of consultations that focused mainly on information flow in the organisation so that the Denyssen’s monthly management meeting has an accurate picture of where the company was at.
“I basically came in and asked the right questions: ‘What does this statistic mean? Where does it fit into the reporting process?,” says Lohbauer, whose experience includes years of corporate management in mining, textiles and heavy engineering, an MBA, and running his own consultancy over the past twenty years, interspersed with periods in which he built businesses of his own.
Denyssen describes his initial discomfort of having to accept mentorship as a condition of BUSINESS/PARTNERS’ loan. “In the beginning I thought of him as ‘that policeman from BUSINESS/PARTNERS coming to tell me how to run my business’.”
It did not take long for trust to build between the two, and when Lohbauer’s six-month intervention ran its course, Denyssen approached BUSINESS/PARTNERS to extend it.
Lohbauer says it is normal for business owners to be apprehensive at first, and to try to control the mentor’s access to information in the business. But as soon as trust is established, the suspicion usually disappears and the business owner ends up facilitating the mentor’s access to the company’s information. In this regard, it is important that the business owner presents the mentor to the rest of the staff as his confidant, and not merely as another employee, says Lohbauer.
Denyssen says Lohbauer’s involvement went beyond merely suggesting new systems. He also played an important role in the appointment of a new financial manager for the company.
It’s been about a year since Lohbauer found Denyssen staring into the abyss of bankruptcy. Today, Denyssen has his gaze firmly fixed on a horizon of growth. Lohbauer is still helping Uniref to complete a business plan for a new recycling project, and will remain involved until Uniref’s systems are stable enough to handle a turnover of ten times more.