I am not sure how I always end up with the thought-provoking topics, but let me try my hand, or rather my ten fingers at it, and if I somehow miss the topic, forgive me. Maybe not bad timing with the recent Satsa conference in Port Elizabeth fresh in my mind.
In my first thoughts on this subject I cast my mind back to the beginning of the nucleus that now forms Tourvest in a different time and a very different country, a company called ‘Welcome Tours and Safaris’, founded by Heinz Enne in 1981, which I joined in November of 1987 as a guide and driver. It had 10 employees at the time, operating from a hotel bedroom and the cigarette shop (yes, smoking was still fashionable) at the Braamfontein Protea with two microbuses and a few sedans. At that time, the acronym SMME was not yet invented, but I am sure that today we would definitely have been called a SMME - the big dominant companies being Horizon Tours, Atlas Tours (now somehow part of the Cullinan Group), and let us not forget SA Railways with its huge fleets of ‘Silver Eagle’ and ‘MCI’ coaches.
So how did we become a sizeable business from our fledgling times as an SMME, which include many learnings for me personally over the last 31 years.
For starters, the strategy included finding new distribution mechanisms such as hotel concierges - Archie, Ronnie, Kewal to name a few – we aligned ourselves to the big companies of the time and became a supplier to them, we developed product that had minimum competitors and marketed the crap out of it (without fax, email, websites, WhatsApp, Skype, social media....yup we travelled the world for eight months of the year), we built a cohesive company culture and we took many bold decisions allowing us to grow rapidly... and then shrank brutally in 1991, but that is a different story for a different day.
After that we started again as an SMME, six of us in the meeting room of Wilson Collins (thank you for the space and guidance Renate), part of Micor Shipping and, again, based on above strategies started growing again, listed Tourvest in 1997 and the rest, as they say, is history.
Having spent some time at the Satsa conference last month, where SMME development and transformation was one of the key topics, I found the increasing separation between big business and SMMEs concerning, the frequent chirps towards the bigger companies - and yes, of course, tongue in cheek - more obvious than in the past, and to me most surprising. Having said that, there seems to be an overall atmosphere in the country that SMMEs are the future and big business is bad.
In my mind nothing is further from the truth, and no, not because I work for Tourvest, but because my journey of the last 31 years taught me that. Big business in our industry generates exposure of a destination, invests substantial capital, spends big marketing money, develops cost-efficient distribution systems, develops skills, drives learnerships, reduces unemployment, facilitates SMME mentorships and internal mentorships, extends bursaries, grows internships, transforms ownership, offers distribution channels, and all of it on a scale that benefits the destination as a whole and has the ability to underpin the overall vision of inclusive growth in our industry in a material fashion. Atlas and Horizon Tours were those big companies then, and we grew a big business in their shadow and with their support, bookings and sometimes cash.
So, to answer the question ‘SMME - Opportunity or challenge?’ to me is easy from my personal journey... huge opportunity! I worked for an SMME business twice and it became a big business twice - without even changing my employer. However the strategy has to be clear, well formulated and deeply researched.
Let me give you some of my key points:
- Make sure your product is not a commodity, transport, township tours, OSV game drives and many more are just that and price is the only differentiator
- Make sure you have distribution for your product and services, make the big businesses your friend, like we did when I still had dark hair
- Make sure you are not over-geared to the extent that a small slump in volumes kills you
- And above all have fun, be passionate, likeable and do tourism.
Upwards and onwards.