Start-up gambles pay off, but not just because of luck
Although his studies included a short crash-course in running an optometry practice, it was not nearly enough for survival in the “big, bad world”, says Nkosi. Much of his business capability came from the experience he picked up working as an optometrist for various practices.
Perfect Eyes Optometrist
When he tells the story of how he started up his optometry business from scratch, Muzi Nkosi uses the phrase “beginner’s luck” more than once.
To an outsider it might indeed seem that there must have been some luck involved in the thriving practice started by Nkosi while he was still in his twenties. For one thing, his Perfect Eyes Optometrist practice overcame the often quoted odds of four out of five start-ups failing within the first five years. Furthermore, while most optometry practices scramble for market share among South Africa’s wealthy, Nkosi believed that his venture could be sustained by the under-serviced working class. Finally, while many optometrists play it safe by partnering with each other or buying into a franchise, Nkosi decided to go it alone.
His gambles all paid off, but close attention to his story reveals that luck had little to do with it. To begin with, Nkosi has deep entrepreneurial roots. He grew up in Pimville, Soweto, where his father had built up a vehicle-hire business from scratch. His parents were never educated, says Nkosi, but they fervently believed in the importance of education for their children.
Unusually for those times, Nkosi was sent to a “Model C” school, Jeppe Boys High. There was no way in which he could disappoint the sacrifices of his parents, says Nkosi, and he successfully completed his studies in optometry at the University of Johannesburg.
Although his studies included a short crash-course in running an optometry practice, it was not nearly enough for survival in the “big, bad world”, says Nkosi. Much of his business capability came from the experience he picked up working as an optometrist for various practices. Including locums, he has seen the inside of at least a dozen practices from as far afield as Mpumalanga and Cape Town. He studied the management and business systems of each practice so that by the time he left his last job to start his own business, he was no beginner.
In fact, his last position was more than a job. He was a 25% shareholder in an established practice in Cape Town, which he largely ran. But he felt that for the amount of work he put in he was not receiving just returns. He quit his job, sold his shares and spent the next six months evaluating and planning his life.
Nkosi credits his father, who has since passed away, for unleashing the entrepreneur in him. Not only did he encourage him to start his own practice, but helped him to identify the location of his practice in Malvern, a working-class suburb in Johannesburg. Although it was not in Soweto where Nkosi wanted to start a practice, it was perfectly positioned to see whether an optometry service could work in a poorer area. There were no competitors close by, and the practice opened in a busy little centre with a Shoprite store, a pharmacy, and a medical facility across the road that could send clients their way.
In an astute entrepreneurial move, Nkosi tendered for a contract to service the workforce of the steel company Scraw Metals, which had significant operations close by. Winning the contract provided a solid revenue base for the fledgling practice, which he started up before he had secured finance to kit it out completely.
The good prospects, the corporate contract and his evident can-do attitude were not enough to convince the banks to finance his business plan. Fortunately, a former colleague told Nkosi about Business Partners Limited, the leading risk financier for small and medium businesses in South Africa.
It is almost five years since the start of the Perfect Eyes Optometrist, and Nkosi says the banks are now more than willing to give him loans. But he is determined to stay with Business Partners Limited for the financing of his second branch in a new mall that is about to be completed in the south of Johannesburg.
He also plans to expand his contracts to service the workforce of local corporates.
Nkosi has no intention of shifting the focus of his business to the middle-class and wealthy markets, which he believes are over-traded. He has spent the last five years working on a winning formula that he intends to replicate in other working-class areas. It is a strategy that leaves little to chance and luck.