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“Building
a successful business is 90% guts, 10% capital”. This is the
firm belief of Mr Raymond Ackerman, founder of what is today the most
successful retail supermarket chain in South Africa. It is hard to
believe that there was a time in Mr Ackerman’s career when life
was a struggle and business was hard work, but as with most success
stories, a great deal of perseverance and effort was required. Mr
Ackerman kindly took time out of his busy schedule to share with us
some important lessons that he had learnt during his astonishing career
to date.
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1.
Guts versus Capital
Mr
Ackerman was aged 36, his wife pregnant with their fourth child, when he
was unceremoniously thrown into the deep end: being fired with two week’s
pay from Checkers, the company he had helped build from possible ruin to
85 stores in the space of 12 years. The reason cited was that he was “too
difficult” and “didn’t adhere to company policy”, preferring
instead to follow his own ideas. Having no money and a family to support,
the only thing of which he was certain, was that he wanted to be in the
supermarket business. It was then that he was given this piece of advice
from a friend: “90% guts, 10% capital”. His friend helped him
sign on shareholders in Cape Town and Johannesburg, securing a R3,000.00
interest free loan and R3,000.00 equity capital from each shareholder. Having
been burnt before, Mr Ackerman ensured that he maintained a 55% controlling
shareholder vote.
2.
Making tea
Mr
Ackerman started looking for an opportunity, and was offered another good
piece of advice: “Go where the tea is being made”. He believes
that it is important to pursue an existing opportunity to allow yourself
time to run the business, instead of struggling along with the detail. He
found a group of three stores for sale, raised the capital whilst still
maintaining majority equity, and began Pick n Pay.
3.
Full frontal fighting
At
the time that Mr Ackerman was establishing Pick n Pay, Checkers and OK came
together to fight their new competitors by starting a price war in Cape
Town. Mr Ackerman was advised to “make them fight you on three fronts”,
and so he opened up stores in Port Elizabeth and Johannesburg. Mr Ackerman
stresses the importance of not trying to dig a hole for your competitors,
rather run a better ship – let your competitors fall into their own
holes – which history has shown to be true.
4.
The Table of Customer Sovereignty
Mr
Ackerman made an interesting analogy of business being like a table, the
four legs of the table each representing an important aspect of business:
Leg 1: Administration – the foundation of the business, vital for proper
control.
Leg 2: Merchandise – what the customer wants at the right prices.
Leg 3: Sales, promotion, advertising, social responsibility – the balancing
leg. Building relationships is key to your success!
Leg 4: People – your staff are as important to your business as your
customers – take time to mix with them and listen to them.
And
on top of the table? The sovereign customer, who is king/queen. Your mission
being to fight for them, so that they will support you.
Mr
Ackerman stresses that your goal must not only be to make money, but also
to invest in social responsibility. He strongly believes that the more you
give, the more you get back, as people will support you and remain loyal.
5.
It’s all about attitude
One
thing Mr Ackerman could not stress enough was the importance of maintaining
a positive attitude. He has great faith in South Africa, and has instilled
this in his entire family, who all still live and work here. He believes
that you have to have courage to give it your all, and build a strong business.
He also says that you should never become complacent or big-headed –
you need to be able to listen to ordinary people. Always keep your ear to
the ground and learn from others, and be on the look-out for new ideas.
Ask questions and follow through. In order to make well informed decisions
you must be involved at all levels within your business.
6.
Conclusion
Mr
Ackerman lives by his philosophy: “Your mission must become a passion
you believe in.” It is evident when listening to him, that he has enormous
passion for what he does and for the people he does it for. He always makes
time for people who need him.
Mr
Ackerman’s closing advice: “If you can dream it, you can do it.”
These
notes were originally taken from the launch of the Southern Suburbs business
club, compiled by Sally Hetherington and edited by Mary Anne Murray.
