29 May 2015
Their story is not unique, as many South African family-run businesses can testify! As Pam points out: “The business know-how is just lacking.” A survey by auditing firm Price Waterhouse Cooper (PWC) in 2012 showed that just 46% of family businesses in this country institute formal measures to assess their performance.
Pam says she is under no illusion: After a year of business incubation and mentoring financed by the Sanlam-ASISA Enterprise Development (ED) Programme, D&P Auto Body Works broke even and declared a maiden profit.
The humble beginnings of D&P Auto Body Works is of a panel shop which opened almost 21 years ago when Douglas left the panel beating business where he worked for almost 15 years. He self-taught himself most of the skills in the trade when he opened his first panel shop in his mother’s garage at the age of 16.
“We had a 2.5X2m Wendy house as an office when we started. In order to secure a loan of R25 000, I went to car dealers in the area, asking them to write letters in which they confirmed that they would give me work. Today we have a workshop of about 1 500m2,” he says, beaming. His smile has everything to do with the success of keeping 12 people employed throughout the non-profitable years.
“It never crossed our mind to close this business. Keeping people employed is what has motivated and spurred us along. I’ll always make a plan, because my employees come first. I’ve sold my daughter’s car and my wife’s car just to survive,” he says.
At the point when D&P Auto Body Works was selected as one of the five small and medium-sized enterprises (SMEs) to participate in the Sanlam-ASISA ED Programme, the family did all the business administration at the end of the month.
Douglas was forced to leave school in Standard 7 to help earn additional income for his parents and Pam enrolled for a bookkeeping course at the age of 40. They say their son, Dustin, who joined the business 10 years ago represent the “technical brains” behind the venture, having acquired a couple of business diplomas to ensure he’s better equipped than his parents at running the family business.
“Running a professional business was always going to be a challenge for us. However, our participation in the Sanlam-ASISA ED Programme has resulted in a scenario where we now have budgets, targets and a set of spread sheets for every company with which we do business. Our cash book is monitored on a daily basis. We know whether we are making losses or gains on a weekly basis, and we can immediately decide what to do to rectify a situation in order to meet our targets. Nothing is falling behind anymore,” says Pam.
When they joined the Sanlam ED programme, a diagnostic analysis was carried out for D&P Auto Body Works which highlighted areas of the business that needed attention and where further growth could be achieved.
Planning and reporting processes were put in place. Now, they service between 50 and 80 vehicles per month. Their clients include car dealers, most car insurance companies, government departments and walk-in customers.
“Today we can tackle anything. We are approaching big companies, because we know we are professional panel beaters now. We’ve always known how to do the work, but we lacked business acumen and professionalism,” says Pam.
Jannie Rossouw, head of Sanlam Business Market says combining business development and investment funding can make a real difference to the success rate of small family owned businesses like D&P Auto.
“This is why the Sanlam-ASISA ED Programme starts with an in-depth gap analysis to identify what each venture’s areas of weakness are. SMEs require more than just financial support to grow and D&P Auto’s story is the one that shows how development support can turn a business around.”
D&P Auto is one of five SMEs that started in the programme in 2013. It is now in the second phase of the programme where the focus is on sustaining and growing their maiden profit. Even when the SMEs no longer need the business development intervention, Sanlam provides business support funding for a further seven years for those who qualify.