The glass and aluminium industry had just gone through a horrible contraction following the Soccer World Cup construction boom in 2010, and many of the industry’s retrenched tradespeople were starting up their own informal glass and aluminium installation operations to make ends meet.
Prashun, who was also retrenched from his senior management job at a large aluminium company at the age of 29, decided to try the same thing, but with one big difference: He was going to build a formal, compliant company, professional to its very core.
Having started in sales and worked himself up in corporate management, Prashun was determined to use his corporate experience to differentiate his business from the bakkie brigade. Just how serious he was is evident in the fact that he enrolled in business management degree at the same time as starting his business.
For the first four years he not only had to contend with the growing pains and long hours of starting up a business, but spent many nights and weekends studying towards his degree at the Durban University of Technology.
Prashun believes that his studies were a key ingredient of the success of his business, which today employs 30 permanent staff members and up to 12 temporary workers, and owns a 1000 square metre fabrication facility in Briardene, Durban.
“Although I majored in production management, the course was extremely varied and covered everything from strategic management, supply management, first-line management to directorship and it touched on everything from listing on the stock exchange down to conflict management and change management. It really prepared me for business.”
For all his corporate aspirations, Prashun was not spared any of the hardships of a bootstrapping start-up. With his retrenchment package of R30 000 he bought a junk-yard bakkie, and knocked tirelessly on doors to scrounge for his first contracts. At first he outsourced fabrication while focusing on the on-site installation with his bakkie-based team.
Bit by bit, he started fabricating the orders himself in his backyard, converting his garage into a 100-square-meter workshop.
While at first there seemed to be no difference between Aluminium Doctor and the rest of the bakkie brigade, Prashun was laying formal foundations, starting with professionally made marketing material, a website, formal email addresses and a fixed phone line. Vehicle branding had to wait until he could upgrade from the junkyard bakkie.
Every step of the way Prashun consulted with his lawyer and accountant to make sure that his foundations were sound.
Aluminium Doctor’s breakthrough came a year and a half into the business, when it won a substantial contract with the building of the Durban ice rink, and completed it with great success.
Prashun knew that it was time to formalise his business premises. He found a 1000 square metre factory in Brairdene and approached the banks with what he thought was three years of solid, sterling financials.
“Every single bank laughed us out of the door,” says Prashun, “including the bank that had our business account.”
It was clear from the financials that the company could afford to buy the building, but the banks were not sure whether Aluminium Doctor’s fast growth was sustainable. “The banks were just: ‘Sorry, but come back when you've got another good couple of years of solid financials,’” says Prashun.
Fortunately, he was introduced to Business Partners Limited (BUSINESS/PARTNERS), which decided to finance Prashun’s purchase of the building. Business Partners differs from traditional business finance institutions in that they place more emphasis on the potential of the business, and also on the capabilities of the entrepreneur rather than just on the balance sheet and age of the business.
Prashun believes that his management style and his commitment to studying business management were crucial to Business Partners’ approval of his loan.
Today, seven years since he started, Prashun’s careful attention to his business’s formal foundations is paying off. Just in the last twelve months, in an extremely challenging economy, Aluminium Doctor grew by 35%.
Even more importantly, Prashun has managed to break through difficult barrier for most business owners. He has managed to extract himself from the day-to-day operations of the business so that he can spend much more time on strategic, financial and risk management, and concentrate of developing new markets for Aluminium Doctor.
“It was emotionally difficult to let go (of the direct management of operations), but I took a conscious decision to employ the right people, and to trust them to do what needs to be done and manage them. I only just managed to get it right this year.”
Aluminium Doctor already has a presence in KwaZulu Natal, the Eastern Cape and Gauteng where it will soon establish a permanent sales office in an expansion that is only possible for a formal, well run organisation.