• Home
  • Blog & News
  • Business Is a Bloody Sport: Why Risk Management is Important
Business Is a Bloody Sport: Why Risk Management is Important

Business Is a Bloody Sport: Why Risk Management is Important

In 2008, determined entrepreneur, Karabo Songo, established Olive Communications. I first met Karabo during the 2013 Business Accelerators radio segment, and was happy to discover that, by 2014, he’d followed through on the advice I’ve offered him. This led to him snapping up the deal of a lifetime – a large advertising contract with a corporate insurer. Karabo’s business grew, exponentially, from this, but then the problems began. In this week’s The Money Show with Bruce Whitfield, we chatted to Karabo, touching on just how bloody the sport of business can get, and the importance of risk management:



Following Through on Advice

In 2013, Karabo sought to specialise his advertising agency’s services, and focus on serving a specific client segment. Selecting to serve the urban, black consumer market, Olive Communications quickly went on to win many accolades and scoop up some key client accounts. And then the deal of a lifetime came along: a corporate insurer who wanted Karabo and his team to lead their brand direction, transform internal marketing programmes, and secure the marketing chain supply. Karabo began to do just that, but then things started to go wrong.

The Bloody Sport of Building Businesses

Karabo’s re-engineered focus quickly spawned success for his client, as the insurer began to penetrate their chosen market with some success. But, a few months later, Karabo was notified that the services of Olive Communications were no longer required – a breach of contract that not only cost the company financially, but is also still tied up in legal proceedings. During that time, however, Karabo was approached by a global advertising group, who wished to buy Olive Communications and thereby establish their authority in understanding SA’s black consumer base. Agreeing to a 24-month acquisition strategy, this deal was structured as a BEE agreement, but problems soon appeared. As Karabo was treated more as a figurehead, rather than a partner, and often excluded from key operations, the relationship quickly soured. Moreover, within Olive Communications itself, members of the team were investing their energies into their own entities, and not focusing on the bigger business issues.

Transformation Deals – What do they mean?

Transformation is an agreed upon effort by both business and government that seeks to create access to skills and economic opportunities for previously disadvantaged individuals. Creating a more inclusive economy and business environment, the BEE codes and programmes seek to transform companies from within and through their supplier relationships. But some BEE deals don’t have the correct intention behind them. Big business, when looking to find partners or suppliers, should be selecting qualifying businesses that offer true value, innovation, and will actively contribute towards business growth, rather than just looking for a figurehead that’ll look good in corporate presentations. Secondly, policies and procedures must be implemented to ensure that standards are upheld and performance is assured. By that same token, small businesses must realise that being 100% black-owned isn’t a true value proposition on its own. Competition is strong in every sector, and building a well-functioning business that can – and does – truly deliver is critical.

Don’t Ignore Your Risk Management Needs

Landing the big deal is the big dream, but growing too quickly without managing your risk is perilous. Picking your deals carefully, and chasing the right ones, is important. A business grows through stages – one big deal does not make a successful business. In between each stage of growth, your business needs to pause, reflect upon lessons learnt, and then move on to its next stage of growth. In that way, a business is much like a small child – it must build muscle and grow, to carry its own weight. By ignoring your business’ need to grow in stages, you end up unable to deliver on what you need to. Building in stages helps you take care of your risk management needs.

Building and Sustaining Your Company Culture

Your company culture is a fundamental part of your business, and a clash of values will be catastrophic. Building your company culture, preserving it, and nurturing it, is key. But if there’s a difference of values or a culture clash between yourself and your clients and partners, you will have to build capacity to manage this, or walk away from a relationship before it destroys your company’s essence. Stay idealistic, focused, and preach your company’s mission, or else you’ll lose sight of the values that your business was founded upon in the first place. As Bruce says, culture eats strategy for breakfast.

Finding the right deals, rather than the big deals, is important for building a successful business. Chat to us at Aurik, and we’ll help you build your company into an asset of value.



Tags: The Money Show, Business Survival, Accelerating Growth

Business Funding: How to Self-Fund your Business through its Lifecycle
The Money Show Business funding

Business Funding: How to Self-Fund your Business through its Lifecycle

Business owners and entrepreneurs often express the difficulty of accessing business funding as a key challenge. And yet,...

Read more

Building a business with confidence amidst uncertainty
The Money Show Business Growth Business owner

Building a business with confidence amidst uncertainty

A constantly changing business environment demands that business owners develop new skills to ensure business growth. Recently,...

Read more

Choose your Business Growth Rate and Build your Business Towards It
The Money Show Business Growth

Choose your Business Growth Rate and Build your Business Towards It

We may be living in a negative economic cycle right now, but it’s up to you to decide what your business growth rate should...

Read more

How to Build your Business & Capitalise on a Seemingly Negative Business Environment
The Money Show Building your Business

How to Build your Business & Capitalise on a Seemingly Negative Business Environment

The reality of a recession is sinking in, and it seems the echo chamber of negativity is overwhelming. South Africa’s business...

Read more

How to build a resilient business in a technical recession
Building your Business

How to build a resilient business in a technical recession

Our economy is in the midst of a technical recession and business owners are wondering how to weather this economic storm....

Read more

Marketing for Business Growth: Keeping your Customer Acquisition Cost in check
The Money Show Business Growth

Marketing for Business Growth: Keeping your Customer Acquisition Cost in check

You’re not alone. It’s becoming more and more difficult to generate leads, turn those into customers, and grow your revenue....

Read more

Product businesses in the industrial sector need to build differently to survive and thrive
Building your Business Business Growth

Product businesses in the industrial sector need to build differently to survive and thrive

Keeping water flowing through the kilometres of underground pipes keeps all players in water infrastructure awake at night,...

Read more

How to Build Your Business by recruiting the Right People to do the Right Thing at the Right Time.
The Money Show Building your Business

How to Build Your Business by recruiting the Right People to do the Right Thing at the Right Time.

As a small business owner, your biggest investment will be your staff. How you hire, who you hire, and when you hire, will...

Read more

Turning the talk of your Business Strategy into the Walk of Execution and Results
The Money Show Business Strategy

Turning the talk of your Business Strategy into the Walk of Execution and Results

In recent meetings with frustrated business owners, Pavlo Phitidis picked up on a significant trend – a high level of complaints...

Read more

Why, When and How to Sell your Business.
The Money Show Selling your business

Why, When and How to Sell your Business.

Every business only has two destinations: it closes, or you successfully sell it. Globally, however, 94.6% of all businesses...

Read more

How to build your business through delegation
The Money Show Business Growth

How to build your business through delegation

Your business journey most often begins with just you. Along the way, however, as you figure out how to build your business,...

Read more

Managing Business Growth – The Killers of Business Growth
The Money Show Business Growth

Managing Business Growth – The Killers of Business Growth

Ask any business owner what they’d like for their business, and they’ll say “Growth”. But managing business growth isn’t...

Read more

KVD: A fisherman’s tale
Building your Business Business Growth

KVD: A fisherman’s tale

American Kevin VanDam is one of the top-ranking bass fishermen in the world with two Major League Fishing Cups, four Bassmaster...

Read more

How to build your business: Break it to build it throughout the growth cycle
The Money Show Building your Business

How to build your business: Break it to build it throughout the growth cycle

You build your business within the context of your business environment. When your business environment changes more rapidly...

Read more

More small business growth insights from GrowCo
The Money Show Business Growth

More small business growth insights from GrowCo

On The Money Show with Bruce Whitfield, Pavlo Phitidis shared further small business growth insights, gleaned from attending...

Read more

Learning lessons from the GrowCo conference

Learning lessons from the GrowCo conference

GrowCo gives attendees the opportunity to learn from the best in the industry with more than 600 people attending – including...

Read more

Reflections on Small Business Growth from GrowCo
The Money Show Business Growth

Reflections on Small Business Growth from GrowCo

On The Money Show With Bruce Whitfield, Pavlo Phitidis shares what he learnt about small business growth, scale, competition,...

Read more

Characteristics of a business owner’s spouse can  be make or break
Asset of Value Business Development Family Business

Characteristics of a business owner’s spouse can be make or break

What’s it like to be the significant other or the spouse of a business owner? People generally believe that when you are...

Read more

Turning a sweet start into a smart start: Making money from honey with your start up business
Business Opportunities The Money Show Start Up

Turning a sweet start into a smart start: Making money from honey with your start up business

What happens when your small side business suddenly shows a whole bunch of potential? How do you turn a hobby into the startup...

Read more

Creating a Succession Plan for your Family Business
Succession Business Succession Succession planning

Creating a Succession Plan for your Family Business

The statistics are terrifying. A mere 28% of family businesses, across the globe, successfully move from founder to next...

Read more

How to break a bad deal and not break your business
The Money Show Business Exit Exit strategy

How to break a bad deal and not break your business

Britain broke market access with BREXIT, and Trump broke the Iran deal with just a tweet, but neither seemed to consider...

Read more

Strategies for Business Growth that Go Beyond a Blind Belief in Brand Value
The Money Show Business Strategy Strategic Planning

Strategies for Business Growth that Go Beyond a Blind Belief in Brand Value

No business is ‘too big to fail’. Blind idealism didn’t work out well for Kodak, and now another iconic brand is filing for...

Read more

Identifying and Preventing Burnout when You’re a Business Owner
The Money Show Growing business value Building your Business

Identifying and Preventing Burnout when You’re a Business Owner

Burnout creeps up on you like the Dementors of Harry Potter fame. You may not see it at first, but it slowly takes over and,...

Read more

Big Questions from Business Owners Like You
The Money Show Growing business value Growing Business Systems

Big Questions from Business Owners Like You

The Money Show with Bruce Whitfield, Pavlo Phitidis set out to answer some big questions from business owners, like you:

Read more