Nyalu Communications has grown to a R50 million rand printing company not by following the herd and going niche, but finding the right functionalities to add that will benefit the client. This is how Ephraim Mashisani works out the pros and cons.
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“As we’ve grown we’ve balanced outsourcing to smaller companies with purchasing our own equipment and even buying whole companies to bring it in house. It all depends how the numbers work out and how reliable my supplier is,” explains Mashisani.
When sustainable business growth relies on having control of production, Mashisani has learnt some painful lessons that have resulted in changes to his model to gain further control.
“I would take information from my suppliers at face value and give it to my client, only to be caught between a rock and a hard place when the supplier went back on their information.
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"It meant I could stay in their queue and hope to meet deadline, or I could go to another supplier and be at the back of theirs and also compromise on quality consistency. I knew that to never be in these situations again I’d need to carefully and strategically grow my own business to make poor suppliers redundant.”
Deciding what to outsource and what to bring in-house
“We’ve realised that we can offer the best value and quality to our clients the more we bring functionalities within our scope in-house. As a recent example, I purchased a litho printing company because I realised I was spending in excess of R1 million per month just to outsource magazine print work.
"I already had 51% shares in the company to secure priority in production, but realised that 100% ownership would bring in more revenue and work towards our goal of becoming a one-stop-shop for clients.”
On the flip side, Mashisani uses the same numbers evaluation to determine whether to keep outsourcing functionalities:
“I am a firm believer in supporting smaller businesses where possible, and I’ve been known to help my SME suppliers with retainers to help keep them in business in quiet times or when they hit a cash flow problem.
"As an example, I have a supplier who is able to provide me with materials that are as much as R300 cheaper than other suppliers. His quality is good and he supplies me well so there is no need to investigate another option and it’s in my business’s best interests to support him.”