On the forefront of a pioneering industry
Every entrepreneur is a pioneer in their own way by creating a business where there was none before, but if a business finds itself in a pioneering industry as well, the frontier experience becomes so much more intense.
Rajna (pronounced ray-nah) Towers, a 56-year-old biochemistry entrepreneur in Johannesburg, has been a pioneer virtually all her life. Born in Croatia, she grew up travelling with her family all over Africa and the Middle East where her father worked as engineer. They settled in Johannesburg when she was 12.
From the moment she graduated from the Johannesburg Technikon as the only woman in her class of biotechnologists, she found herself on the forefront of a new and exciting application of science in industry.
She joined South African Breweries, which was one of the first companies in South Africa to create a laboratory to do quality-control tests for every stage of its production process, and so lay the foundation for the quality-control movement that has been making inroads in South Africa ever since. By the tender age of 21, the germ of her idea had already formed in her mind – to start a commercial quality-control institute, a “mini SABS”, to help local industry transform their production systems with the latest quality control practices.
Later, as a laboratory manager for a biotech consulting firm, she got the best experience possible for starting her own business one day. “As lab manager, I ran the business. I was doing everything from the receiving of samples, marketing, sales, invoicing, liaison, and I was listening to what the needs of the clients were.”
What she saw was a wide open industry, few competitors, and a huge demand for quality-control know-how among local manufacturers who were trying to break into exporting when South Africa’s international isolation ended in ’94.
Not surprisingly, she did not have a problem finding clients when she started her own biotech consultancy after resigning. She was snapped up by manufacturers to implement quality control measures on their production lines, and she got to know intimately the “other 50% of quality control that happens outside the lab”. It entailed setting up production procedures, and training workers to maintain ISO standards.
She used the in-house labs of her clients to do her quality-control tests, but soon they grew so voluminous that she decided to start her own facility. Bioindustrial Services Laboratory was born in 1999 in a three-roomed converted residential house in Kempton Park, with a staff complement of Rajna and one intern.
The development of Rajna’s business is a case study in incremental, organic growth. It was a painstaking process of using each consulting contract to finance the next bit of lab equipment. Despite being profitable, the only finance she has ever managed to secure for the business was a small overdraft facility here and there and a bit of asset finance.
Yet Bioindustial Services grew to a team of 16 people, and later filled a second converted house to the brim. All the while, Rajna was raising two “amazing children”, who spent so many school-day afternoons at the lab that they were jokingly called “lab rats”. The long hours required for running a lab – samples cannot be left overnight or over a weekend – was hard for her family, says Rajna, but something of her passion as a scientific entrepreneur must have rubbed off. Her daughter is today a veterinary surgeon and her son is studying finance.
Rajna says although incremental growth is slow and frustrating, “there is a kind of safety behind it”, because the business remains unencumbered by debt. Even so, Rajna reached the limit of what such growth could deliver. Her home-grown lab was bursting at the seams and she could not get crucial ISO 17025 accreditation, which would allow Bioindustrial Services Laboratory to diversify its client base rapidly from its current emphasis on testing animal feed and health products.
Rajna spent three years looking for suitable commercial premises, but “nothing worked”, because the commercial banks would only finance a bond of about 60%, putting it out of reach of a self-funded operation like her lab.
But then she found Business Partners, who were willing to extend 100% finance of more than R3m to buy a commercial property on the East Rand. The approval of the loan was based not only on her past achievement as an entrepreneur, but on the growth potential that the new premises allows. At the time of this interview, Rajna was a week away from moving in.
She acknowledges that she is heading for an “extremely difficult” few months, as the business has to absorb the cost of the move and the fitting of the new laboratory. Her next step will probably be to find an investor to secure Bioindustrial Services Laboratory at the new level that it is about to reach.
From where she is sitting, the market opportunity is still as big as always. Companies are keener than ever on quality control services, yet are outsourcing their lab work to cut costs. And the training of young laboratory technicians and quality control managers offers a huge opportunity for a pioneering business. It is a wide open frontier.