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Hlabathe and Molehane CC T/A Siba’s Dairy   
 

Background

Siba’s Dairy was established in Bothaville in 2007 by Samuel Hlabathe and his business partner Ms Molehane. Today the company has a second branch in Kroonstad; a permanent staff of 15 employees; and a fleet of six delivery vehicles which are used to distribute dairy products from a supplier in Klerksdorp to eight towns in the northern Free State.

The challenge

Having featured as a ‘success story’ two years previously, Siba’s Dairy reached a point where the knock-on effect of its aging vehicle fleet threatened to derail its sustainability. High vehicle maintenance costs and the inability to deliver reliably and on time, threatened not only the contract with their supplier, but also their turnover. This, in turn, lead to the very real possibility that it would not be able to meet its monthly expenditures, posing a danger to the livelihoods of Siba’s 15 employees unless something could be done to turn the situation around. Siba’s Dairy turned to Seda, with whom it had a longstanding relationship, for advice and assistance.

Seda intervention

A critical planning exercise (CPE) was conducted to get to the root of the problem and a turnaround strategy was put in place. The CPE revealed the need to replace the vehicle fleet, either through lease or instalment sale agreements, in order to reduce maintenance costs and improve delivery times. This would lead to a significant improvement in turnover. The need was also identified for improved branding to increase visibility and compete more effectively.

The result

  • The business acquired two new delivery vehicles, allowing it to service more towns per day than previously;
  • The business managed to retain the services of all 15 employees;
  • Siba’s turnover more than doubled during the period, from R611, 011 in 2012 to R1, 414,564 in 2014. From a loss of R3, 572 in 2012, Siba’s reflected a profit of R111, 066 in 2013.

Advice to other SMMEs

“I know of many people who want to start their own businesses. I advise them to approach Seda, their consultants will come to your business to assist you,” says Margaret.