George Diab On Growing Entrepreneurial Acumen And Scaling A Business

George Diab On Growing Entrepreneurial Acumen And Scaling A Business

Join me and George Diab in the Villa Moji at the Fairlawns as we get granular about what it takes to start and scale a successful business in South Africa.

 

George Diab is an Entrepreneur, Business and Tax Specialist, Leadership Advisor and Speaker. As a Chartered Accountant he holds the honour of being a SAICA Top 35 Under 35. He is the co-founder of one of South Africa’s biggest bespoke suit companies, Tailor Me, and is a former Head of Solutions Delivery at the NeuroLeadership Institute. His entrepreneurial feats have been featured in Entrepreneur Magazine and Destiny Man among others. Mr Diab has just launched his latest venture, Growth Accounting Services (GAS) in partnership with Raizcorp, Africa’s biggest and most successful business incubator and accelerator.

Successful entrepreneurs like George Diab who have mastered the art of monetizing service to the greater goals of South Africa such as growing a class of entrepreneurs who will drive economic growth are rare. A rare breed of entrepreneur who cares and is passionate about mentoring and empowering the thousands of aspiring entrepreneurs in our country. Our interview, held at the Villa Moji at the Fairlawns Boutique Hotel & Spa, is a must-read for entrepreneurs.

You’re gaining recognition as someone who starts up and builds successful companies, tell us where and how you started?

 

I’m a small-town farm boy raised between Potchefstroom and Ventersdorp. Growing up on the farm was exciting because there was always something to do but also lonely because there were never people to do it with. Your imagination just carries on and goes wild and you’re always thinking of different things to do to occupy your time. One thing that’s always interested me was solving people’s problems, finding people, whether it be friends or family and engaging with them, understanding their issues and finding ways or solutions to address those issues. So that’s always been a big, burning, passion of mine and I think truly that’s what entrepreneurship comes down to, it’s being able to identify opportunities, solving people’s problems and devising new and innovative ways to solve those problems. Of course, then the question comes down to, how do you monetize it? If you’re addressing a need, there’s someone willing to pay for the convenience of having that need addressed, so there’s always going to be a market. My simple philosophy is: there’s no idea that’s a bad idea, there are only people who give up on their ideas.

 

We tried many things on my parents’ farm, whether it was raising sheep, cattle, planting maize and processing dairy. We were always trying to be innovative so that we could provide a sustainable living for ourselves. My mother used to bake and cook and sell her products at the local markets and that was to earn extra income. Growing up we were not wealthy, my Mom used to make all of our clothes, I never had any toys, so I had to make my own and find ways to keep myself entertained. But that also taught me a valuable lesson, that is, you don’t need much to make you happy and sometimes the more you have, the less happy you are.

 

I started my first business at the age of 11 when I got my Dad to build me a pigsty because I wanted to raise pigs. I used to get maize and feed from my Dad’s crops and raised the pigs and sold them. It was a highly profitable business because I had no costs. Eventually it got to a bigger level and my Dad said, “Fine, you’re taking my maize, you’ve got to start paying me for it now”. Being an 11-year-old, I wasn’t too happy with that idea and I threw in the towel and I quit the pig business. At about 13, I used to drive around all the neighbouring farms collecting scrap metal which was not being used and clogging their farm yards. So, I’d sell it to the scrapyard and got paid for rendering this much-needed service.

 

When I entered high school, I started having other priorities like academics, building long-term friendships and playing sports, but at the age of 15 I started another business. The school tuck-shop area didn’t have any grass around it, it was a bit dusty and Potchefstroom Boys being a traditional boy’s school you had to always look prim and proper with your blazer and basher and shoes nicely polished. So, I started a shoeshine business next to the tuck-shop. While the guys were waiting for their toasted ham and cheese sandwiches, I would polish their shoes because they were dusty, and I used to make a bit of money for my own tuck. That was a manual labour business and what that business taught me was that, unless you’re physically working, you’re not making any money. So, on those days that I didn’t feel like polishing shoes and instead played football on the field with the guys, I wouldn’t make any money.

 

I bring these things up because I learnt early on about finding and identifying opportunity and where there’s opportunity, there will be customers willing to pay for the convenience of the service being rendered to them.

How did you leverage this promising passion for entrepreneurship to carve out entrepreneurial acumen in your post-school years?

 

I always knew that I was going to be an entrepreneur, there’s this debate going on about whether entrepreneurs are born or made, but my personal view is that I was born into an entrepreneurial family, so I was made this way. I suppose it’s a little bit of both. But I always knew that I wanted to work for myself at the end of the day. After Matric I had to decide on what I was going to do, and I wanted to study something that would empower me or give me the ability to build successful businesses down the line and I decided to enroll for a BCom Accounting degree at the University of Johannesburg. Not only do you get the financial and business understanding of how to run and operate a business, you get the tax side of it as well, in my view it’s a master course in business. If you’re going to run a successful business there are various aspects that need to be addressed, from sales, marketing, finance, HR to the different business processes, but if you could tick off one of the main reasons why businesses fail, the financial-business-operational controls-processes side of it, it would greatly increase your chances of success. I qualified as a Chartered Accountant and did my articles at one of the Big Four audit firms and it was after articles that I co-founded one of my most sustainable businesses called Tailor Me, which is one of the biggest bespoke suit manufacturers in South Africa. Tailor Me started from a need that my co-founders and I had for bespoke suits because we wanted to look good in our professional setting. It was about identifying an opportunity because bespoke suits are so accessible in every other market in the world such as Asia and Europe. There the standard is not going to a retail store and buying something off the rack, the standard is to get fitted in a bespoke suit, why was not available locally and yet in South Africa, we’ve got the skillset, we’ve got the materials, so why are there no tailored suits locally at affordable prices? My co-founders and I embarked on this mission to learn about the process, learn about the fabrics and found the best and most highly skilled tailors to work with. So, it all started with making our own suits, but our passion and intent drew people to us. Before we knew it, our market had extended beyond the friends and family network to people we’d never met before. So, we decided to register a company, purely as a hobby, something small and simple while working our full-time jobs.

After articles I moved into the international tax division of my company because I wanted to learn about the intricacies of the tax system and how to structure business taxes more efficiently and get the most financial reward out of my business. Not long after, I left to become a Group Financial Manager for a major financial services company. All the while running Tailor Me on the side.

 

So, I’d say to entrepreneurs, it’s not about working hard, it’s about doing something that you love because doing something that you love often doesn’t feel like work. The same way that people get home after a long day and watch a movie or play a video or a computer game to relax, I got home and focused on my passion project. It never felt like work, it was always downtime for me. After a full day’s work of being a Group Financial Manager, in the evenings I’d go and consult with clients and then I’d drive to my factory to brief my tailor in the Joburg CBD on the design for the client. My days used to start at 6 in the morning and end at 12 midnight and when I look back, I think about how exhausting that should have been, but it wasn’t, I was energized. Granted, there were bad days but those were few and far between.

 

A challenge that subsequently arose for me was when it came time to decide between growing Tailor Me, then a relatively unknown entrepreneurial venture, and choosing the corporate lifestyle which came with a very good income as a Chartered Accountant. Signing that resignation letter was tough and once it was handed in, I had disrupted myself and there was no going back, now I had to make it work. I set myself a target of 3 months to earn a salary from the business and if I failed to meet it, I’d have to go and look for paid employment. I slogged, I worked relentlessly with the strictest focus on growing Tailor Me and within that first month I’d paid my salary.

You have a particular passion for sharing your experiences and knowledge with aspiring entrepreneurs, why is that?

 

Many people want to start businesses because of this illustrious idea of being an entrepreneur and how cool, exciting, glamorous it is. It is not glamorous, it is hard work, the most unrewarding thing in the world because there’s no one to pat you on the back to tell you that you’re doing a good job, there are no performance reviews and there is no salary at the end of the month. All the value that’s sitting in that business is the value that you create and only because of the hard work that you put in. The decision to leave corporate was a bit easier for me because I had a viable business on the side. It cost me about R2000 – R3000 to start up Tailor Me and I reinvested the profits through starting small. I learnt the construction of a suit, I learnt how to measure, I learnt how to deal with my tailors, I learnt how to get clients, I learnt everything around the business without taking any kind of financial risk. So, all I had to do after leaving paid employment was to take this existing, viable business and scale it. I traded into the business.

 

Now, the entrepreneurs that I speak to and mentor, they have these ideas that they haven’t researched, they haven’t tried to implement them on a small scale and see whether they’re viable or whether there’s a market for their product. They take these ideas and they want to go and look for funding and they can’t understand why a venture capitalist or backer won’t fund their business because it’s such a brilliant idea, why won’t anyone fund me? At the end of the day, that’s all they are, ideas, and how can someone back an idea? Go trade into your business, show that potential investor that you’ve put in the hours, you’ve worked long and hard and this is how it’s trading and that all you need is advice and assistance and investment to scale your business and then someone will back you. Start small. Go out there and do it. Establish a track record, the knowledge, the skillset, the ability and most of all, the attitude to be able to grow and develop businesses.

 

So, fast forward a couple of years, I’ve scaled Tailor Me into being one of the biggest and most well-known bespoke suit companies in South Africa. Then I joined a company called NeuroLeadership Institute, widely regarded as the world’s most innovative behaviour change company, as the Head of Solutions Delivery. I’ve always been very fond of developing people and there are certain leadership styles that I think get the best out of people. My firm philosophy is that people don’t need to be managed, they need to be unleashed. Everyone is capable of greatness, the thing that differentiates me from you is not our ability but our mindsets and if we have a growth mindset and believe in ourselves, we can achieve anything! Jeff Bezos and Jack Ma are prime examples of this, they are exactly like me and you and started with nothing. Jack Ma was a teacher, Jeff Bezos started his business in a garage and they’ve built billion-dollar businesses. It’s about self-belief and transformed mindsets. With a little bit of success comes more self-belief and we build on that and that leads to a complete mindset shift.

 

For me the question has always been: how do I take people, engage people, get the best out of people, not just from a business perspective but from a developmental perspective, to make them believe more and help me achieve our common vision and secondly, how do I engage with young and aspiring entrepreneurs from a mentoring role to get them to believe in themselves and their own abilities and that they too can? So, I lead people the way I want to be led and use the insights I have gained from NeuroLeadership to strive to do that consistently and through that I grow as well.

You’ve launched a new start-up in partnership with Africa’s premier business incubator and accelerator, Raizcorp, what can you share from that journey?

 

My new venture, Growth Accounting Services (GAS) is where my true passion of helping entrepreneurs build and scale their businesses lies. I’ve partnered with RaizCorp, the country’s biggest incubator and accelerator of businesses which has incubated and accelerated thousands of businesses and this is so crucial to our economy as a country. How this venture came about is that I realized that coming from my background I’ve been more privileged than most. I’ve got a very strong education and I’ve been exposed to many mentors and guides over my career and when I started my first business I found it difficult, it was one of the most challenging things I’ve ever done. So, if someone in my position found it that difficult, how much more difficult must it be for someone else who doesn’t have the same skillset, expertise and experience as I do? It must be deathly difficult and no wonder there’s a 99% failure rate for young entrepreneurs because they are not getting the advice and support they need and it’s not about the funding, the funding will come if you’ve got an investor-ready business because investors are looking for returns. But you must build a sustainable business, something that’s going to generate revenue and is scalable. That is why I want to work with entrepreneurs to achieve the level of success that they are capable of hence also the partnership with Raizcorp. Entrepreneurs need mentorship and advice through their business lifecycles so that they can get their businesses to a level where they can prosper and reach greater heights.

 

So, our new company, Growth Accounting Services, specializes in bookkeeping and accounting services with growth advisory services. What we must understand is that there’s a recipe for success in growing a successful business, there’s a formula for success involving processes and policies, recruiting the right people to achieve the vision and acceleration of the business, accessing market, knowing your suppliers and knowing how to run and scale a business. The success formula is almost like a workflow process, certain things must be in place in the beginning, in the middle and in the end. So, what I find is that the youth and inexperienced entrepreneurs are too impatient and want to skip step 1 and go straight to step 7 and it doesn’t work that way. They must understand that in entrepreneurship they must pay their school fees in the beginning: learn, be patient, work for months without an income, sacrifice time with family and drinks with friends over weekends. It is a massive sacrifice but it’s a sacrifice that you make now for the rewards later.

 

So, in conceptualizing GAS, the question was, how do you empower people to scale their businesses with the most relevant, accurate and reliable financial information possible? We’ve chosen to focus on the accounting and growth services because firstly, there’s value in numbers and the value in numbers is often overlooked by entrepreneurs because your numbers not only tell you about your past and how your business has performed, how your past decisions have resulted in value creation or value loss, but your numbers also speak to decisions that can be made into the future. Traditional bookkeeping services don’t offer that service.

 

So, the question for us was, how do we change that equation using today’s technology and put the power back in the hands of the entrepreneurs so that they can be in touch with their numbers and cash flow positioning? Improper cash flow management is one of the major reasons why businesses fail. So, through GAS, we provide real-time financial information so that entrepreneurs can make decisions in real-time because the business world is moving so fast, if you can’t make decisions on the spot with the information readily available to you, you’re probably going to lose out on opportunities. The second part to this equation is that once we’ve taken the financial information to empower them to make real-time decisions, we also have access to that financial information so that we can analyze and interpret it and guide and mentor them which further empowers them in their decision-making. In partnership with Raizcorp we also focus on the growth element and holistically look at an entrepreneur’s business thus ensuring that everything works according to our success formula and accelerate their success.

 

I need to emphasize something at this juncture, not everyone can or should be an entrepreneur, so it’s essentially about whether they want to be an entrepreneur and if they express an interest for it, the question then becomes, how can we support them? Another critical thing to point out is that opportunities come, on average, twice a day if you’re looking. It is therefore important not to just jump at every opportunity that comes knocking. You need to assess what purpose a potential opportunity serves in terms of taking you closer to your overall business goals. You don’t have to accept all potential opportunities because you want to avoid bumping your way to the finish line. The decisions that you make must be getting you to your desired outcome. Keep being aware and resist being complacent or comfortable and disrupt yourself continually as an entrepreneur.

What is the one ingredient that you can isolate and attribute your success to?

 

Focus. I dislike the word “serial entrepreneur” and really question what is meant by this word that gets thrown around so much. I would never invest in a business run by someone who has more than one business venture going at a time. Laser sharp focus is exceptionally important and takes distractions away from the table. Each business is different and in that, one is going to have different questions and different answers for all the issues that crop up, so you can’t strategically apply yourself to your business if you are being pulled in different directions. If you’re doing what you love you will remain focused on it, you will remain energized, you will find a way to manage all your life domains, integrate them and make it work. If you’re doing something that you don’t love, how do you stay focused because it will sap your energy? To stay focused requires passion. My basic process is: I know where I’m ending, and I have clear goals and a clear vision, and I know what I need to do to get there. I would truly feel lost without that peg in the ground and it arises from my need to control my own destiny and not ever be a victim of consequences.

Photography by Makgomo Mushwana – Sali Sali Photography