Diversify revenue streams for long-term growth

Uzair Essack is a Forbes top 30 under 30 entrepreneur who built his first business when he was in university. He is the founder of Riyp and Sweet P, and his mantra is simple: Understand what people fundamentally need and build a business that solves their problem.

In Essack’s case, he spotted a market in the Middle East for South Africa’s fresh fruits and vegetables and his exporting business, Riyp was born. His market quickly grew to include China, India, Saudi Arabia, Gabon, Cameroon, France and Germany – and then the Covid-19 pandemic hit.

As an export business, Riyp immediately faced new challenges, even though as an essential business Essack could continue trading. In many ways it’s been a positive journey, however, accelerating change and revealing where Riyp’s business model was vulnerable.

Here are Essack’s three lessons in building a recession (and pandemic) proof business that delivers real value to customers, suppliers and communities.

Find the gap in the market and deliver a solution

For a number of years after launching Riyp, Essack delivered value to his customers and his business continued to grow, however the global pandemic revealed gaps in his business model that he had already begun to notice.

“On the positive side, we provided an essential service, which is critical. During the pandemic I was extremely grateful that we could continue trading, even though we had to incur a lot of additional expenses and challenges. If Riyp was a different business, I don’t know if we would have made it. I had another business that I had to close down once lockdowns were enforced.

“So, the lesson is that you want at least some of your revenue streams to come from products or services that people and businesses cannot survive without. You need to be relevant.”

But Essack was becoming increasingly aware of a problem that he was facing. “I was essentially a middleman between South African farmers and my customers around the world. I didn’t produce my own product.” With this insight in hand, Essack began to shift his business.

The lesson: Markets will always shift and change. The Covid-19 pandemic resulted in Covid-surcharges for exporters, higher cargo costs and produce that was stuck waiting to enter ports with huge delays. These impacted Essack’s margins but they weren’t the fundamental problem he was facing. He realised that if he wanted to really add value and build a sustainable business, he needed to own the entire value chain, and that meant creating his own products.

Look for ways to add value

“To spot the opportunity, I needed to focus on the value chain after I delivered my goods. Some fresh produce goes directly to the shelf, but most of it is processed into food with a longer shelf life, and that’s where the margins are.

“If we could do this ourselves, the produce would be processed at the source, we’d incur much lower costs across the supply chain because our refrigeration and transport needs would be different, and our margins would be higher.”

Essack got to work: What products was the market looking for and who could he partner with?

“It wasn’t just Riyp that would benefit from building our own brand and product line, but the farmers we work with as well. Their margins would be much higher if they were involved in beneficiating their own products.”

The lesson: Find a way to add value in as many aspects as possible between yourself, your suppliers and end buyers. Look for products that are essential and that consumers need on a daily basis. What will we always need, and what can we live without?

Work with partners that share your ideals

“When I launched the value-added business, Sweet P, I wanted to focus on ‘super health foods’ and how we could add value in that specific segment,” he says. “But it was important to work with the right people.”

Sharing the business meant taking a smaller percentage, but Essack recognized that this would be a smaller piece of a much bigger pie.

“I started by asking myself who I had a good relationship with. Who has assisted me over the years and vice versa? Who did I believe was forward thinking and shared similar values to my own – and who was the opposite of those things? I narrowed the list down to who I would want to do this venture with and developed a rough structure that I could present to potential partners. Ultimately, I’ve built this new business with a partner who appreciates that I’m young and forward-thinking. There aren’t many innovators in this industry, and so we’re pioneers together.

The lesson: Even during a global pandemic and lockdowns it’s possible to develop and launch new businesses, provided you have a solution to real market needs and you’re working with partners who share your values and want to overcome obstacles to build the business. There will always be challenges. How we face them will determine the longevity of a business.

Foster a partnership culture for growth and success

The journey for business owners is not easy. At Sasfin, we believe that no business can operate in isolation. That is why we have partnered with different innovative local brands and businesses to ensure our commitment to small businesses and entrepreneurs are met. Creating a partnership culture ensures business continuity in this new world of business.