Formal systems, staff relations help resilient company bounce back
A few months ago, Tshepo Mekoa was worried at the speed with which his company Brima Logistics was growing – would the intricate systems and procedures that he had set up over the last decade and a half hold under the weight of his rapid expansion?
And then, literally overnight, he was hit by exactly the opposite problem as the Covid-19 lockdown froze the economy. Despite being classified as an essential service, Brima lost 80 percent of its revenue, and Tshepo had to draw on every ounce of his entrepreneurial experience to save his company and the 120 breadwinners who worked for it.
“We set up a war room,” says the 48-year-old Johannesburg-based entrepreneur. Tshepo and his executive committee, which consists of his operations, sales and financial managers, among others, went into emergency mode.
Costs had to be slashed, including a 50 percent cut in everyone’s salary. A frantic search for funding and support finance was launched, protective gear and sanitizers were sourced, and urgent negotiations were undertaken with creditors to extend their terms. Instead of meeting once a month, Tshepo and his management team reviewed their rescue strategy every two weeks. In what he describes as the most painful experience in his career as a business owner, Tshepo had to retrench 40 of his workers.
To make matters worse, Brima was just about to move into a brand new 3000 square meter warehouse near OR Tambo airport in Johannesburg when the lockdown was announced, and the company found itself stranded in between two rental properties. Much of the rescue energy went into moving the core of the company into the new premises under the most difficult circumstances.
One of the sources of support finance was an emergency loan from Business Partners Limited, which helped to cover Brima’s payroll. A grant component of the deal was used to buy personal protective equipment. “Without these support funds, Brima would not be here,” says Tshepo.
Today, Brima is still in survival mode, says Tshepo, but the rescue strategy seems to be working and the infrastructure inside the new warehouse is almost complete. Not only was Tshepo able to re-employ all the retrenched workers, but he has even started looking for more workers.
It is plausible that the success of Tshepo’s emergency plan has a lot to do with the way in which he had built his company, and the fact that it has been through perhaps an even worse crisis some years ago.
Tshepo’s introduction to business came early in his life. He was raised in Daveyton Township near Benoni by his grandfather, who owned a shebeen that was one of the foremost gathering places in the Daveyton community. Helping his grandfather in his business laid the foundation of Tshepo’s entrepreneurial drive, and today he pays tribute to his roots through his restaurant Brima Cafe in the heart of Daveyton. While his grandfather’s shebeen was not allowed to legalise or fomalise in terms of the old apartheid laws, however, Tshepo’s Brima Cafe is a formal, high-end establishment.
Tshepo built his main business, Brima Logistics, in the same way – by the book, compliant, and with sophisticated IT systems that connects the six branches of the business throughout South Africa.
Tshepo studied industrial psychology after school in the early 90s but landed his first job as a logistics clerk at a Johannesburg company. A manager at the firm gave the inquisitive young man a book to read called “Military Logistics”. From that moment on, says Tshepo, he knew that we wanted to do logistics for the rest of his life.
He rose steadily in the industry while studying towards a diploma in business logistics through Unisa, first as a logistics supervisor at MTN, and then as logistics manager at Cell C and later Vodacom. By the time he managed a division of two warehouses and 500 workers, he was itching to start his own company, but he had to think carefully about how to break into an industry dominated by established companies.
His strategy was to focus on a niche called reverse logistics, which is the collection of returned goods and obsolete items from companies. He identified it as an underserved market because established courier companies do not like handling unboxed goods.
“In 2005 you could still buy a truck with your payslip,” says Tshepo, which is what he did, and his wife Matsietsie acquired a bakkie for the venture. For a couple of months Tshepo ran it as a sideline, but it soon became clear that the enterprise would require a full-time commitment. Tshepo resigned, cashed in his pension fund and threw himself headlong into his business.
At first, he worked as a subcontractor for an established courier company and even tried some furniture deliveries until his hunch about reverse logistics paid off.
Standard Bank contracted Brima to collect their obsolete computers. Soon Brima started delivering packages as a traditional courier to branches where they were scheduled to pick up old equipment. Some of Brima’s growing number of customers started asking for warehousing of the items that they wanted delivered to customers, and, while they were at it, freight clearing and forwarding services for the items that they were asked to warehouse.
From the start, Tshepo built his business with formal systems and full compliance, which made it remarkably resilient in the face of setbacks such as hijackings (most of Brima’s freight are high-value items). But it is his formal approach to employment and staff relations that is the core strength of Brima, whose workers own 10 percent of the company and earn corporate-like benefits and perks.
In 2016, Tshepo was involved in a near-fatal motorcycle accident. He spent a month in a coma, four months in ICU and a year at home before he could return to his business. Just two months before the accident, Tshepo had completed a formal standard operating procedure for the business, and while he was recuperating in hospital, his staff pulled together around the operating manual. Not only did they keep Brima afloat, but they grew the business by 45 percent.
For the foreseeable future, says Tshepo, the main target for Brima Logistics is just to remain afloat. The disruption of the Covid-19 crisis has been too traumatic for the economy to set any substantial growth strategies for now, although Tshepo is certain that it will create opportunities, especially in the field of e-commerce logistics. And if Brima’s response to previous crises is anything to go by, there will be plenty of growth ahead.