If anyone had told newly-graduated teacher Surendra Padayachee that his future lay not in the classroom, but rather in the world of industrial fasteners, he would have been laughed at.
A short while after starting his teaching career, an industrial fastener business was where Surendra Padayachee found himself.
Today, 27 years later, he is immersed in Shenka Industries; a business that has grown beyond expectations and now offers 2 300 product lines and employment to 58 people in a custom-designed, 3100 sq. metre premises in Benrose, Johannesburg.
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Planning to take over the business
Padayachee is quick to point out; his teaching aspirations did prepare him for business. He completed a B.Com. Degree and supplemented it with a Higher Diploma in Education before his uncle, the then owner of Shenka, had persuaded him to come and try working in the business.
The turning point, which could easily have led him back to teaching, came when his uncle decided to leave the industry to enter politics a few months after Padayachee had joined him.
“He suggested that I buy the business, which at the time had sales of around R 50 000 a month and employed seven people. The purchase price was R 600 000. We visited Standard Bank, Lenasia where he was well-known. Clive Rabie, the manager at the time, guided me on all aspects of financial planning and in 1987 I found myself becoming the proud proprietor of the company,” says Padayachee.
Raising market presence
Making the company a player in a field filled with local and international players left Padayachee facing challenges that face most SME owners. Through his local market knowledge Padayachee increased service levels, became more price-competitive and improved delivery times.
By the end of his first year in business, he had grown sales by about 12% a month.
“In this business, product catalogues are vital. I backed these catalogues with a website and personal customer visits. Later, I took the next step and used my education background and the love of graphic design to take the next marketing step,” says Padayachee.
“I began designing personal brands for the owners of retail hardware stores and began packing fasteners in their ‘in-house’ packaging. This opened new markets for Shenka. It was also the key to increased success in a competitive environment, says Padayachee.”
He was able to raise Shenka’s presence in the market and this enabled him to sell branded products that were locally sourced. The incentive here was the ability to increase his profit margins across the board.
Re-assessing the market
After four years, Padayachee took the next major step. He reassessed his market and increased his product offerings by supplementing his stocks with imported products. A trade finance loan leveraged the business to a new level.
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On the back of this success, Padayachee undertook international buying trips and was able to import quality fasteners and fixings which offered his customers quality, affordable alternatives to those offered by international fastener giants.
In addition to his ‘customised’ packages, he began selling specific patented and registered Shenka products into the local market. Exports to New Zealand and Australia are now an integral part of the business.
“Throughout the years, Standard Bank has assisted and offered financial advice to Shenka Industries proactively and when required. Developing the relationship and creating a partnership with Standard Bank was based on a single premise - something that all SME owners should take to heart,” says Padayachee.
“It is essential that you are honest about your business and financial status at all times. I kept Standard Bank fully informed. So, when I really needed help, such as when cash flow problems were caused by stock arriving just before the year-end break, a time when sales are traditionally down, they were happy to assist.”
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His advice to entrepreneurs is:
- Keep money in the business. The owner should only take a set salary out of the business and keep funds available for purchasing and growth;
- Understand your market and ensure that your products meet client requirements;
- Research your competition. By knowing your competitors’ strengths and weaknesses this will allow you to plan effectively;
- Ensure that you offer quality products;
- Always keep your promises you make to customers.
“Being in business means not just being a transactional seller. Selling products is fine, but relationships, such as those I have with Standard Bank, my suppliers and customers, are what will ultimately make your business sustainable,” advises Padayachee.