/How Portia Mngomezulu Is Conquering The Highly Competitive Beauty Industry

How Portia Mngomezulu Is Conquering The Highly Competitive Beauty Industry

Vital Stats

  • Player: Erna Basson
  • Company: Erabella Hair Extensions
  • Est: 2017
  • Visit: www.erabellahairextensions.com
  • Career highlights:
    • Named South Africa’s top entrepreneur under 30 for 2017
    • Global female entrepreneur of the year 2017
    • Top 100 most influential young South Africans 2017
    • Interviewing Grant Cardone — 2018
    • Opening speaker at the Mega Success event 2017 in Los Angeles.

Originally from Bloemfontein, Erna Basson has always been highly competitive. She completed a four-year bachelor’s degree in three years, while holding down several part-time jobs. She was first bitten by the entrepreneurial bug in her second year at UFS (University of the Free State). Her class was struggling with business law, so she read the text book and produced an annotated summary that she then sold to desperate students.

Today, she heads up Erna Basson Ltd, a business coaching and speaking venture; Woman Entrepreneur, a global platform empowering and educating female entrepreneurs from around the world on how they can start and scale their businesses; and Erabella Beauty Global, a premium hair extensions brand available in South Africa and globally.

On acting the part

“I was a cheerleader for the Cheetahs while I studied, and I also worked as a hostess at Cubaña,” she says. “I got the opportunity to do tons of promotions for liquor brands and that experience taught me how important it is to always be on point and professional, as the event sponsors could pitch up at any time to check on what was happening.”

Related: How To Start A Salon And Spa Business

After moving to Port Elizabeth with her now husband, Nellis Basson (who is also an entrepreneur), she started working for Gestetner and was out on a sales call at Distell when she heard the regional manager complaining about bad service from an events company. “I said to him, ‘if I can have a company up and running within 30 days, will you make use of my services?’ and he said ‘yes’. I walked into the company as an employee and walked out of the company with a new life and opportunity, and this has taught me a valuable lesson that I still follow every day. Take advantage of every opportunity, even if it scares you. You need to be out of your comfort zone to grow.”

That was one of the first principles she learnt, and which she speaks about to her global audiences.

“The bigger the problem you are solving for people, the more valuable you are to them, and the more money you will make.”

People are always searching for solutions. They will always look for better, faster and smarter ways to accomplish tasks. Erna knew that to grab her customer’s attention, she had to start by solving their problems. “If you can take a person from point A to point B, by identifying their crucial problem and then offering to solve it, you will be able to create a real business that matters.”

Another important thing happened that day. She went back to her boss and immediately told him what had transpired. “Honesty, loyalty and integrity have always been the three key pillars of my business, starting from then, and it paid off — Gestetner became a client soon after.”

She started the promotions business with no staff and she didn’t know anyone in Port Elizabeth. “I called up a friend of one of my husband’s friends and asked her to give me ten phone numbers, and then I asked each one of those women to give me another ten. I sold my Citi Golf so that I could have a small start-up fund, and then the business just took off. We got clients like SAB, MTN, Sony, Mango, Maybelline and L’Oréal. I was earning R450 000 for ten days’ work at the age of 23.”

She soon had seven permanent employees, and more than 500 promoters working on campaigns across the country. “Within a couple of years, I had created systems and processes, which enabled the company to reach its goals and function independently without having me in the business, making it a perfect opportunity to sell and move on to the next challenge.”

Finding the gap in the market

It was just before Erna got married that she came up with an idea for another venture — while she was looking for venues, dresses and décor ideas. “I kept on wishing there was one place where I could find everything related to weddings, and then I thought why don’t I create one?” That was how website and magazine Majestic Weddings was born, an online directory and monthly magazine. After growing it into a successful wedding planning tool, she sold that company in April 2017, through an international business broker, and used the profits to launch her hair extension company Erabella.

Transitioning from services to products

erna-basson-grant-cardone

Erna had never run a product-based business before, but there’s a first time for everything, right? Problem is, product businesses are extremely hard to build and get traction for. They require upfront capital and investment, as well as a whole lot of excitement. Erna certainly had the latter, believing that every woman has the right to have gorgeous thick hair.

But there were some challenges:

  • The output of a service-based company is intangible, but a product-based business sells goods that customers can see and touch.
  • A services company does not have to keep goods in stock or maintain an inventory. The service is created or sold as and when the customer
  • needs it.
  • Service-based companies do not have to put up capital — they provide a service and the customer pays for it.
  • In the service industry, you have maximum control — when it comes to a product based company, you sometimes don’t have control over certain things (like a late courier, or late imports, or increase of exchange rate) but it serves as a great opportunity to apply more systems and processes to lower the risk.

“I had to buy stock for the first time. Different lengths of hair extensions, and different colours. Suddenly, I had invested more than R1 million, just like that. What’s more, in South Africa, there is a 20% import duty, which immediately raises the price of your product, making it more difficult to compete globally.”

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There was another problem too. Erna had decided that Erabella would be an online business, but it didn’t grow as fast as she wanted it to and she quickly had to change the business model. “That’s when I realised that you cannot take business personally. The minute you invest emotionally, you will make mistakes. When something is not working, you need to take immediate action and make the necessary changes. Nearly every successful company since the beginning of time has had to change strategy and direction to survive and grow.”

Reverse engineering

She also learnt about the importance of starting with the end in mind.

“If you want to make $1 million, write that figure down and reverse engineer. If my hair extensions are priced at $250, I will need to sell 4 000 sets per year, which means 11 sets a day. Instead of being dumbstruck by that big figure, I’ve now got something manageable to work with. It’s that old story about how to eat an elephant.”

Two can be better than one

Another key lesson Erna learnt was that you can do anything, but you can’t do everything. “When I started Erabella, I had one staff member in Johannesburg, and lots of competition. I had to do everything, from accounts, social media, business development and so on, but now we have an entire team in each department. The business grew too slowly and I realised that doing it alone was not going to work. I found a business partner in Cape Town, Karel Vermeulen — a very successful businessman who owns a personal care brand — and I knew we would be a great fit. I knew I could trust him with Erabella SA because he was invested, and I moved on to growing Erabella New Zealand and Australia.”

As a result of the partnership, the business is soaring. Today, Erabella hair extensions are available in South Africa, Namibia, Australia, New Zealand, Hong Kong and Dubai, with Canada next on the list.

That personal investment principle is one that Erna has applied in her coaching business. People do not appreciate what comes free, she says. “If I coach you at no cost, chances are you will say the programme did not work. But if I charge $6 000 a day, I can guarantee that you will do the work required to make it a success, because you have skin in the game. You will value and appreciate the process.”

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Erna’s key principles

  1. In the words of Grant Cardone, author of The 10X Rule, follow up, follow up and follow up: ‘90% of business lies in the follow up’. “I always do, and believe that you should follow up so much that they tell you to go away, and then follow up again two weeks later. I chased a client in Cape Town for two years. When their promotions vendor let them down, I was top of mind and I got the deal.”
  2. Never focus on the 10% that’s negative; focus on the 90% that’s positive: “We all need to have bad days in order to appreciate the good ones. When a client says no, see it as a new opportunity (take the negative from the word no, and turn it into a positive new opportunity) to recreate your strategy.”
  3. When people say no, ask them why not: “If I don’t close a deal, I ask, ‘What is the reason we did not do business today? Objections are only complaints — find a solution, and you will win all the time.”
  4. Don’t ask how: “Focus on the what and the who. What do I need to do to achieve my objective and who do I need to speak to? The ‘how’ will take care of itself.”
  5. You are 100% responsible for your business: “Don’t blame the economy, the government or your staff. If you are not successful, it’s your fault.”