How This South African Entrepreneur Went From Zero To Building USD 19 Mn Company
When Lebo Gunguluza arrived Durban in 1990, he had no more than R 60.00 and perhaps a boatload of courage on him. Today, he is a successful entrepreneur, motivational speaker, and one of the youngest black self-made millionaires in South Africa.
The young man had arrived at the University of Natal determined to enrol for a BCom programme, even though he couldn’t afford the required fees.
Life had done a number on Lebo and the rest of his family when his father died so early in his life. His mother earned a meagre salary as a nurse, and despite her best efforts at catering for the needs of the family, she often came up short.
So having managed to put Lebo and his siblings through high school during the turbulent times that accompanied her husband’s demise, tertiary education was always going to be out of reach. And Lebo had learnt this early enough. However, he had made up his mind to brave the odds and try regardless.
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And that’s precisely what he did. Lebo was a bright student, and even from his high school days, he had his heart set for business studies and his tenacity was the driving force. He had been accepted into the university, and he wasn’t going to let his financial struggles prevent him from getting in.
So, he made that trip from Port Elizabeth to Durban, and even though he hit a brick wall the first day, he did have some things go his way. Lebo had no friends or family in Durban, but he managed to hit it off with a compassionate individual who took him in for a few days while he tried to get around his money problems.
Luck left it late as it wasn’t until the final day of registration that providence caused his path to cross with a benefactor who took an interest in his case and helped him out. With the support of his funder, he was able to secure a bursary and pay for his studies at the Pietermaritzburg campus.
That spelt the beginning of an inspiring but turbulent journey. At the middle of the academic program, his funder relocated from South Africa, and just like that, the only support system he thought he had in place had been cut off. Now, he was stranded and had to figure out a way around yet another challenge.
Sheer resourcefulness and the determination to stick it out until the completion of his degree helped him find a way out. He took an agent job at Edgars, and he was earning a small commission for every new customer he signed up. It wasn’t much, but he was able to get by.
Because he put his heart to it, his efforts didn’t go unnoticed, and he soon started working in-store. Despite working by day and catching up on his studies at night, paying his fees was still a struggle. And eventually, he had to take up student loans.
When Lebo Gunguluza graduated in 1994, he was neck-deep in debt. He had a backlog of loans to clear, but this time though, he could summon a college degree, some work experience, and an impressive sales ability.
For his first job post-college, he bagged a position at SABC as a Sales Executive. He rose through the ranks swiftly, and by the time he turned 24, he had become Marketing Manager at Metro FM – the product of four promotions in the space of two years.
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By that time, he was already taking care of his entire family back home in Johannesburg and even though everyone thought he was making a killing on his new job, he wasn’t earning much in reality.
Lebo recognised the need to up the ante if he was ever going to be as successful as he wanted to be. He had known so much lack that he always felt penury breathing down his neck, and it didn’t help that there was nothing left as savings after taking care of his needs and that of his family.
To earn more, he needed to be more. And that meant travelling to the U.S. for a few weeks for a specialised course in broadcasting. The idea was to become a big deal and start earning big, but the game plan changed upon his return.
True to his initial intentions, he got a relatively lucrative job with an advertising company called Herdbuoys as soon he got back from the States, but even though he was now earning twice what he used to, he wasn’t making much headway – and that’s because he wanted more than just waiting for a fixed pay-check every other month.
And before long, he called it quits with Herdbuoys. His friends and family thought it a crazy decision at the time – after all, it seemed like a very profitable job – but perhaps, only he knew what he desired.
Lebo Gunguluza soon started his own company – Gunguluza Entertainment – and the inspiration for the company couldn’t be more unlikely. As he told EntrepreneurMag;
“I was good at throwing big parties at home. Why was I getting all these people to eat my food and drink my alcohol for free when I could be making money from them?”
What Lebo lacked in financial firepower, he made up for in people skills, and all those years as a salesman had helped him develop an uncanny ability to leverage situations to great use.
Since he didn’t have the money to get his business off the ground and keep it running, he knew he had to make it happen some other way. And luckily, an opportunity presented itself. He got into talks with a Sandton-based night club called Insomnia. The club hadn’t been doing so well, and he offered to bring the crowds if he was allowed to take the wheel.
Lebo gave the club a new image as a hotspot for young and trendy black people, and since there weren’t any of such in the area at the time, the effort proved rewarding. He made R 7 K on the first night.
Source: mentorfeed.com
At first, the funds were getting squandered as though it were his and not the business’. But soon, he realised where he was headed and opened a business account. He started saving up the cash. And he did pretty well for a while, averaging R 5 K per event for four months and saving most of it. That was until a new-kid-on-the-block came along and stole most of his business.
The club numbers were plummeting, and there was a need to switch lanes quickly. And he did it in style, booking artists he had come to know over the years and building a reputation for himself as a talent manager. By now, he was talking on the radio all the time and taking home up to R 100 K per event.
You’d think he had finally hit the big one, but he had eyes for more. About the same period, the South African entrepreneur caught wind a new radio station that was about to launch, and he jumped at the opportunity.
By the time he had talked the radio station into allowing him to handle the launch and leveraged his connections in entertainment, he had thrown a kickass party that drew attendance from some 15,000 young people. He took home R 1.5 Mn for his efforts.
“That experience reinforced what I found out early on in the business. You don’t always need money to acquire things – it’s often possible to use your resources and barter when you don’t have cash. Without funding, tenders or loans, I had made my first million at the age of 27,” he says.
Well, he took to a life of luxury soon after and that proved his undoing. Instead of putting the money to good use, he squandered it on lavish cars and parties, and within one year, he had hit rock bottom.
Lebo got his second coming by venturing into media and communications. He worked with Penta Publications for nine months before setting up his firm; Corporate Fusion. The company grew in leaps and bounds, and some years later, it was grossing up to R 14 Mn annually.
But then he dropped the ball once more. Travelling the world and living a lavish lifestyle became the order of the day, and it was only a matter of time before he lost touch with his company’s operations.
All it took was one botched event for one of his biggest clients, and he had lost up to R 7 Mn worth of business in three weeks. A couple of months later, he was staring down the barrel as the business had plunged into debt to the tune of R 4 Mn. Salaries could no longer be paid, and some downsizing had to happen.
Source: speakersinc.co.za
But soon, he had to close shop. He sold his office complex and with the money realised, he set up a chic restaurant. He ran the restaurant with his wife and groomed it into a successful enterprise that attracted the ‘who’s who’ in Johannesburg. He also managed to settle his debts.
When he severed ties with his wife in 2008 due to unreconcilable differences, the restaurant became hers. But by then, he was already nurturing a new venture that had already turned in R 2 Mn by the time the divorce proceedings were concluded.
That move laid the groundwork for Gunguluza Enterprises & Media (GEM) Group of Companies which currently has holdings in media, hospitality, technology, property, and investment. He has also acquired interests in several hotels and launched a car hire company. GEM has grown into a multimillion-rand business of a dozen companies, employing over 200 people. As of 2015, the company was worth R 300 Mn (USD 19 Mn).
To support young entrepreneurs, Lebo Gunguluza founded the South African Black Entrepreneurs Forum (SABEF) in 2008. The organisation’s membership has grown to 30,000, and he has become a sought-after spokesperson for black entrepreneurs, as well as a popular motivational speaker with an inspirational story.
It’s been a tumultuous journey for the South African entrepreneur, but he’s managed to ride out the storm and steady the ship – a lesson in persistence, resilience, and getting back in spite of mistakes.
Featured Image Courtesy: cfo.za
