Thursday, October 28, 2021

Some SMEs that have stood the test of time

SUNDAY STANDARD reporter TLOTLO LEMMENYANE recently joined other business reporters in a media site visit of Small to Medium Enterprises (SMEs) that have previously received assistance from the Local Entrepreneurial Authority (LEA). She profiles some of the central district-based entities. 

LALLA VILLA GUEST HOUSE 

It is worth P1.8 million. This is a figure far-fetched to many bank accounts but this is the hard-earned money that started the building blocks of a guest house dream. 

The money carries pockets of enduring stories whose beginnings stretch to the days when Gladys Mothei used to sell second hand clothes under a tree. This is one of the string of wares that Mothei sold to make an honest living while her husband did the same in the mine. 

Little was known then that the livelihood of selling wares of numerous kinds will one day unlock opportunities for bigger entrepreneurial exploits. The family also loaned money on the streets of Orapa until a cash loan was formally registered when the era of the Non-Bank Financial Institutions Regulation Authority dawned, which demanded that cash loan businesses have formal structures. The business still exists today. 

The family later settled in Letlhakane where the building of a guest house was spurred. In addition to the self-financing funds the family’s request of P1.4 million was approved by CEDA. Building started in November 2016 and a month later the CEDA funds kicked in. Out of this money the family has so far spent P560 000 of it. The construction is expected to be completed by July. 

Ronald Lephodisa, their son, quit his job to take on the role of managing the family empire. His plans are to later turn the guest house into a hotel and provide more than just accommodation but tie into this hospitality the experience of venturing into the mining town so that their guests can learn the nuggets of history that the town and its surrounding areas possess. 

The exorbitant costs of locally procured building materials and the original architectural design flaws did not deter this family from staying on course with their beloved dream. 

RAPHA MEDICAL CENTRE

Rapha, the name derives its meaning from the Bible, it means God the Healer. At one point in the beginning it didn’t seem like Dr. Karabo Modise and Dr. Remotsaletswe Boithamako would use that blessing to heal when the clinic experienced a three-week stretch without patients walking in through the door. 

Boithamako described this as a trying time, a ripe opportunity for fears and doubts to validate immediate closure. Modise’s unwavering faith, said Boithamako, provided a light to the darkness. 

He also emphasised that their partnership gives the clinic a strong foundation as each gives an equal output to its running. On the day of the media tour the number of patients in the waiting area sharply contrasted the rough start, in fact the media was advised to keep the interactions as short as possible so the doctors can return to the attending the patients. A typical day has between 10 to 15 patients walking in through the door. The two doctors are also assisted by a visiting dentist. 

The doctors self-financed the initial building blocks of the clinic through personal and family loans, a figure Modise estimated to P90 000. Later they applied for a loan from CEDA and although they did not get the requested P500 000, P125 000 of it was released by the development agency. 

“Private clinic doesn’t really make money,” said Boithamako on the backdrop of losses incurred since 2015. The losses are a result of reinvestment into the clinic of advanced machinery to cater to the growing needs of the mining town. 

Despite the financial hurdles, the two doctors vow that an exit is an option as the plan is to have established a mini hospital five years from now. 

MULTI-RESIDENTIAL APARTMENTS 

To ordinary folks the monthly rental of P4 500 that this multi-residential, owned by Mishingo Dabutha and his wife, seeks to fetch is a deep dig into the pocket especially that it is in Letlhakane which besides being one of the country’s diamond capitals cannot, however, claim to be an active hub of the economy. 

The rental is actually quite comparable to those asked for in Gaborone which is the real economic hub of the country. At least that’s what it appears like at face value. As a mining town one of its characteristics is temporary residence of people who simply have a dwelling in it because of their jobs in the mine. 

It is for this reason that this multi-residential asks for such a rental, to give mining folks a comfortable home away from their real abodes. The multi-residential is considering furnishing the apartments to eliminate the need for the mining folks to buy double furniture. 

A ready let-in they call it. In fact the multi-residential is currently in talks with a South African company that is seeking a one-year occupancy in Letlhakane.  

The building process was done and managed by professional contractors as was one of the conditions set by the Citizen Entrepreneurial Development Agency (CEDA) as the funder of this development. An amount of P1.6 million was released by the development agency in June 2016 to build the five apartments. The apartments used fixtures imported from China, a decision which was made following a comparison of costs against the local market. A typical fitted kitchen would have cost P130 000 if local suppliers had been used but from Chinese suppliers it cost less at P65 000. 

The CEDA funds did not meet total development budget but the multi-residential intends to use rental funds to install air conditioners amongst other things.  

OVINE FARMS

Certain business exploits contend great walls in their growth processes and Ovine Farms is one of them. The farmers, husband and wife Oduetse Oscar Ramonameng and Keneilwe’s 98 hectare (Ha) field currently lies predominantly unused because to achieve its full use requires them to spend P1.8 million for electricity connection to the main grid. 

The mega size field was accumulated over an eight-year period between 2005 and 2013 from surrounding land owners. Electricity is a significant enabler to large scale commercial agricultural production and without it the farmers presently use a meagre size of the field whose diesel cost the business can accommodate. 

During summer days the farm uses about 30 litres of diesel per day which by the end of the month draws out a figure of P15 000, this declines by about P3 000 in winter days. 

The farmers at the time of interview had 20 000 cabbages ready for market which were grown from half a hectare (0.5 Ha) land and is currently able to meet the 800 cabbage per day demand which from the production will last between two to three weeks. 

The farm sells its produce to mass retailers but negotiation of prices could be said defeats the hard work put into production. Often times the farmers are forced to accept asking price of the retailers which is less than the price that can fetch a profit for the farm. With a paltry production size the farm struggles to maintain a reliable supply but even with a secured market it fails to attract the true pricing. 

The project was initially self-funded at an amount the farmers couldn’t estimate but it later received P870 000 funding from First National Bank Botswana, which it makes quarterly repayments of P46 000 to. 

Repayment is equally a struggle as the farm was struck by a heat wave in 2015, which it is still reeling from. The challenges may be mountainous but the farmers have dedicated their entire lives to farming and have no exit plan. 

THE CURVE GUEST HOUSE 

Self-financing in business is often a thin line between fear and bravery. Tshomamiso Mogaetsho’s courageous act to put her hard earned money behind her passion is what one might call a feat of an African lioness. 

Mogaetsho fueled her passion of offering memorable hospitality with P1.5 million, money which was raised from various entrepreneurial exploits. In 1990 the young woman who then was a waitress at Debswana interacted intimately with hospitality which saw her climb through the ranks to earn the Catering Manager position more than a decade later. 

Though she had been catapulted at work she always knew that her greatest exploit was outside the company she had grown in. “This was my dream,” she enthused. 

She had tried previously to run a guest house in Palapye but the project collapsed and a year later The Curve Guest House rose from the former ashes. The original plan of the guest house was multi-residential apartments but soon the hospitality passion beckoned and within two years an incremental building process resulted in a six-room guest house. 

It has contracts with Bobcock, Darma, Skylow and Digital Survey but also relies on walk-ins. Adjacent to the guest house are self catering apartments under construction which Mogaetsho self financed at P800 000, using revenue from a primary school tender she had previously won. She is at the moment seeking a loan to complete the project. 

The guest house fetches a monthly revenue of P260 000. 

LUCERNE PROJECT 

Serero Mogaetsho, husband to Tshomamiso Mogaetsho, holds a strong stand-point that not even the most poignant whispers of fear of failure can derail his conviction that the P2.5 million that he put into the Lucerne project was in vain. 

Not only is his faith demonstrated by the money he has ploughed into the project but it is also expressed by the five years he has to wait until he can harvest, a period he described as one that makes no room for errors. “You can’t afford to make mistake,” he asserted. 

The money trickled in incrementally from the sale of the family’s livestock farm which had been one of its assets. He expects to recover the money within 10 years with an estimate of about eight cuts in a year. The 8.5 Ha project’s irrigation needs leveraged on Mogaetsho’s engineering expertise which was garnered over 30 years from his previous job at Debswana. 

Due to the project’s demand of high expertise Mogaetsho sought the assistance of technical experts from even as far as South Africa in preparing the land for planting. Land preparation involves such steps as soil and water testing, turning the soil and harrowing. Besides the project’s need for technical expertise, it also demands significant capital. 

For example the irrigation mechanism cost P290 000, the seeds cost P22 000 and the fertilizer cost P48 000. From a single hectare 150 bales (1 bale is equivalent to 25kg) are harvested which would fetch P60 each at the current market pricing.  

SEROWE CANVAS AND TENTS 

Omphemetse Kgotlaetsile took up a previous job as an ambulance driver in 2001 with a distant heart from the stability it offered because he always knew that his heart would eventually find a home in the craft of enterprising. 

This is the reason why when he had accumulated P20 000 he handed in his letter of resignation and in 2007 and used it as seed capital to start his business. The products include canvas tents, bags, stretchers, mattresses and car canopy covers. The business’ revenue fluctuates with the months depending on the size of orders, supported mainly by walk-in customers, which Kgotlaetsile attributes to the stagnancy of the business. He admitted to a complacent marketing strategy, an area he identified as one the business needs to put robust effort in. 

While the business awaits a revival Kgotlaetsile expressed that the situation isn’t dire to warrant closure. A sore area for the business is pricing against South African companies that has established distribution agents in Botswana. 

“A lot of the times we can’t beat them with price,” he said. He explained that the products manufactured in South Africa come with a lesser cost than they do in Botswana which makes the playing ground uneven. 

COPEL RANCHO 

Though marked by a blurry line, experts tend to separate an individual’s talent from something that they generally enjoy doing; the two are said to be different. Fro Cecilia Opelokgale and Mosupi Moshoeshoe owners of the chicken abattoir such a distinction was difficult to make because not only did they demonstrate rich knowledge in what they do but they also showed a fervent interest for it. 

The abattoir places public health at the centre of its operation of which it was made clear that hygiene is its unique selling proposition. 

Although it has finished the payment of P750 000 loan from CEDA which it received in 2004 the abattoir is not without challenges. The operating license permits a maximum slaughter of 10 000 birds per day but due to lack of advanced machinery the abattoir currently slaughters about 600 per day. 

The abattoir offers a slaughtering service to over 50 chicken farmers in the area which contribute 100 birds to the 500 that come from the business’ poultry which was estimated at 3 000 birds. 

To expand the abattoir needs P2.2 million which will allow it to slaughter 500 birds per hour over an eight-hour operating interval of which six hours is for slaughter and the two for preparation. Another challenge is the pending certification of Halaal from BOBS, which is considered an international practice. The problem with it is that for each chicken prayed over for a cost of P3 is asked which the owners find expensive and also argue that the killing of birds is purely a scientific act. 

KANLEE FARM 

A clear measure of growth when operating on leased government land is the amount a farmer has been allocated. Kanlee Farm proved that it can be trusted with a bigger planting field as it will soon acquire an additional hectare to the four it has been working. 

This is so because a number of other farmers operating on the same land are producing from one-hectare fields. The farm produces cabbages, tomatoes and green peppers. 

Keikantsemang July started production in 2015 and was later joined by her husband after the untimely closure of BCL mine where he previously worked. The farmers are still repaying a loan obtained from CEDA of P405 000 with a quarterly repayment of P23 000. Out of their produce the tomato is said to be the highly demanded product due to its general shortage in the country. The farmers have had to benchmark from Glenvalley tomato production, which grows tomatoes all year round, so as to introduce the same method of production and thus meet the demand. 

A typical tomato harvest from one Ha gives them between P150 000 to P190 000. The current biggest challenge is transport costs incurred from delivering their produce to mass retailers. The farm is located 20 kilometers from Palapye. Monthly expenses on transport range between P25 000 and P33 000. 

Ordinarily retailers collect produce from farmers. However, Kanlee does not have that advantage as it is yet to capture a significant market share as its competitors from South Africa, where retailers generally acquire produce, from gives tough competition. Perhaps one advantage the farmers have is that they pay a yearly rental of P10 000 to government for the four-Ha field as each hectare is charged at P2 500 monthly.  

MATHUDI SHADES HOTEL 

Providing accommodation is a conventional service but perhaps what makes Mathudi Shades Hotel stand out is the unconventional is the manner of building from which the accommodation is offered. 

It used different natural materials in the building process abiding to the principle, “you don’t throw anything away.” The 44-room hotel is currently in the process of grading having just completed the process with  Botswana Tourism Organisation. 

The business is owned by husband and wife Nonofo Makwapa and Mathudi and is managed by their son Matshediso. 

TASK MANUFACTURES 

Resilient and humble beginnings is Pinnie Maruatona’s story. From selling from the car boot to now operating from a shopping complex is an undeniable sign of growth and this is not the story of many in entrepreneurship. 

A seed capital of P57 000 from the abolished Financial Assistance Programme (FAP) received in 1999 is what jump started this business which manufactures and sells bedding, school uniform and curtains. 

Six years later in 2005 the business moved into rented premises and today makes its money mainly from walk-in clients. Maruatona sources material from outside the country and in Botswana is where she applies her creativity in making fabric products to lure the eye of a passers-by with their beauty.

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