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What do you do when your large corporate clients cut their orders by 70% and the rest of your market is also singing the recession blues? You find a market that is not feeling the pinch and create a product they simply cannot resist - that's what. It doesn't sounds easy but Walter Pretorius is showing that it can be done.
Walter manufactures and markets an exclusive range of peppermills, bottle openers and nutcrackers. His peppermills are used in more than 100 Pretoria restaurants and have found their way to 28 different countries in the world. His products are also popular corporate gifts.
Up until a few months ago, business was good. But then the world markets went on a wild rollercoaster ride and the demand for Walter's product range took a bit of a dive.
"I had to make a plan," he says." Along with demand dropping, my input costs were rising. A year ago, for instance, I was paying R8 000 for a cubic meter of teak; today it costs me between R14 000 and R18 000."
Combining the entrepreneur's instinct for a good idea with a solid understanding of the market, Walter hit on the idea of manufacturing and marketing an exclusive range of ivory wrist watches. His analysis showed it was a good idea for three reasons:
- He can make almost two peppermills in the time it takes to assemble one watch, but needs to sell 12 mills to match the income generated by that one watch.
- Middle class consumers are taking the most strain in these times. The very wealthy are largely protected due to their limited exposure to interest rates. These consumers are also always on the lookout for a status symbol that sets them apart from their peers.
- He was already using ivory for his other products and therefore had the raw materials available.
His instinct, and planning, was spot on. Before he even advertised, Walter had 10 orders, to the value of R75 000. "Stop focusing on talk of recessions and depressions," is his advice. "South Africa is truly alive with possibilities at the moment."
Given the ivory content of his watches, Walter is experiencing some problems as far as exports are concerned. Cites, the convention on international trade in threatened species, largely prohibits ivory exports unless it pre-dates 1973. "Fortunately the Department of Environmental Affairs supports my enterprise and is negotiating with Cites on my behalf."
Walter plans to market his handmade watches to foreign hunters. "My target is 500 per year. The idea is that the hunters give me parts of their trophies, such as ivory or sable horn, and I make watches for them."
He also wants to develop his product range to the point where he can reinvest a share of his profits into elephant conservation and support for disadvantaged schools.
Despite his expansion plans, quality and exclusivity remain Walter's guiding principles. His watches are unique. Each one is numbered and packaged in a handmade leather container with a certificate that attests to its authenticity and the ivory or horn it's made of. "This, combined with exquisite workmanship, is how one attracts the attention and buying power of an exclusive market."
Walk on the sunny side of the street
Here's what Walter suggests for staying positive when times are tough:
- Be selective. Distinguish your reality from what you see on television and read in the papers. Not all bad news has a direct bearing on your business.
- Identify opportunities. Carefully analyse the pros and cons of all possibilities. Write them down and answer the question: what's in it for me?
- Be assertive. You cannot be a successful business person with a poor self-image and lack of confidence. You have to believe in yourself to promote yourself and your business.
- Demand respect. Don't let others walk all over you. You cannot please everybody all the time.
- Build your business on your passion. You have to enjoy what you do and money isn't everything.