BUMA131 Business Management 1A

Luvuyo Rani - Silulo Ulutho Technologies

The eldest of four boys, Luvuyo Rani (41) was born in the Eastern Cape and educated at Kwa-Komani High School in Queenstown. After a short career in teaching, he went into business with his brother to create Silulo Ulutho Technologies, a company servicing the burgeoning internet needs of township communities. From humble beginnings, the business has grown exponentially, garnering Luvuyo numerous local and international awards. In 2014, he was named one of the Top 10 Outstanding Young Persons of the World by the prestigious NGO Junior Chamber International, and recently picked up a coveted award for social entrepreneurship from the World Economic Forum. Luvuyo, who lives with his wife Zanele in Cape Town, tells Bronwyn Bowmer his story.

Business is exciting,' says internet whizz Luvuyo, who worked his way out of poverty. 'My father worked as a nurse, but his passion was rugby. He was one of the best, people said. Much to his dismay, I was much more into Latin American dancing. My mother was a domestic worker who also ran a shebeen from our sitting room. I now realize my journey of entrepreneurship began with her. More than anything, I learned resilience. We came from poverty, but our foundation was strong so we were able to survive. I was a good boy, disciplined and well dressed. As the firstborn, I was involved with family affairs and soon realized that I could combat poverty through education. So in 1994, I passed grade 12 very well, with a university exemption.

My father didn't have much but gave me R500 for my bus ticket to go and study in Cape Town. I wanted to study political science, but the University of the Western Cape was so busy with protests that I couldn't get into that department. Instead, I completed a bridging course in commerce, accounting, and economics at Cape Tech that led to a BTech in Education. My teachers saw I was smart and offered me assistant jobs that helped pay for my studies. This was incredibly helpful as my father tragically died in an accident around this time. I studied by day and worked at night, including a job at the V&A Waterfront providing information. I had to wear this long shirt, shorts and takkies [sports shoes], and girls used to come up and laugh at me!

Not long after graduating, I applied for a teaching post in Khayelitsha township and went there to teach accounting, business economics, and entrepreneurship. I taught for three years and it was one of the best times of my life. Then a cousin of mine started selling vetkoek [fried buns] outside the school gates and at break time, I would go and help her. I got into trouble with the principal, but the entrepreneurial bug had bitten. After work, my youngest brother Lonwabo and I had longdiscussions about what we could do to make more money. We considered all sorts of options, from township tours to phone services, and even sold diapers at one stage, but our stock was stolen so we gave that up.

In 2004, I resigned as a teacher to sell refurbished computers with Lonwabo. He had a paid job fixing phones, so he borrowed R10 000 from the bank and bought four refurbished computers. We sold these out of the boot of my Corsa Lite to Khayelitsha teachers who needed them for the admin generated by the new outcome-based education. People thought I was crazy to quit my job, but we persisted, getting groups of six teachers together in stokvels [savings clubs] to buy a computer a month. Our profit was R400 per computer. But it cost us to have the computers repaired or serviced, so we invited our friend Sigqibo Phangabantu to take care of that side of things.

The name of our company, Silulo, comes from the first syllables of each of our three names. Soon we saw the computers standing unused in the teachers' homes! We realized that if the teachers came to us, we could teach them to use them. In 2006 we opened an internet cafe, convincing a tenant at Khayelitsha Mall to rent out part of his phone shop to us. Our supplier loaned us 10 computers and we planned to repay R10 000 monthly until we had paid off the computers. In the first month, we made R250 and our expenses were R12 000! Our cheques were bouncing and people were angry with us, but we knew this was a great opportunity and refused to give up. People were coming into the shop, asking for assistance with their CVs and other simple computer issues: in those days, many didn't know the difference between fax and email. We realized the need for training in the ICT sector was great and started courses for the whole community.

I was under pressure. The bank wanted to take back the car and the house, my mother needed support, and my girlfriend left me. But I was always convinced that my business was a calling from God and prayed for him to help me. Things were tough, but I kept going. In 2006, I got a bursary to study for a postgraduate diploma in associated management at the University of Cape Town (UCT). The same year, a loan from UCT's Bertha Centre for Social Innovation enabled us to buy computers, get our own venue and improve our training programs. We worked very hard, and the next year received a further loan and bought a bakkie. Finally, with money coming in from the courses and internet cafes, we paid back our loans in full. From there, we went from strength to strength, expanding to the Eastern Cape. We now have 36 stores, 12 franchises, and 178 employees. More than 25 000 students have graduated from our training courses!

All our graduates have the opportunity to become consultants and ultimately franchise owners. In 2013, Cadiz Asset Management approached me with potential funding, but instead, we asked them to fund three staff members to buy their own franchises. We believe in empowering people from the community. We plan to expand to Gauteng, and in the next 10 years want to have at least 200 stores in South Africa! For me, this is not just about success and making bucks. I see opening up the world of technology to disadvantaged communities as my calling. We need more success stories, and more positive role models for young entrepreneurs. This year I'll be traveling to Kigali, China, Columbia, and Singapore, as well as attending a leadership program at Harvard. It's the absolute highest point of my business career! I'm content, I'm happy, and know I need to be grateful for everything.

Question.Explain through the use of examples from the case study, the five entrepreneurial characteristics that Luvuyo Rani possesses that helped him make a success of his business.

Question.Determine the economic system within which Silulo Ulutho Technologies operate and provide support for your answer.

Question.Silulo Ulutho Technologies operates their business as a partnership which they then Franchise out. Differentiate between a partnership and a private company and advise Luvuyo and his partners on which is the better option.

Question.There are many challenges facing young entrepreneurs wanting to start their own businesses in South Africa.

1. Identify three challenges that Luvuyo Rani had to overcome in his entrepreneurship journey.
2. Discuss how he overcame these challenges to make a success of his business.
3. Explain the role of entrepreneurship and small businesses in the economy as a whole.

Question.The umbrella concept of Corporate Social Responsibility recognizes three points. Describe the three points and give practical examples of what Silulo Ulutho Technologies could do to make sure that they comply with all three points.

Question.Discuss reasons why it is so important for Silulo Ulutho Technologies to engage with its stakeholders.

Question.Luvuyo Rani had to apply for a bank loan to purchase stock and a vehicle. Using the four C's to evaluate a loan application, evaluate whether the bank should have given Luvuyo the loan.

Question.Marco-environment factors have an effect not only on the market environment and on decision making by management, but also on one another, and this constantly causes a change in the business environment.

Question.Management is defined, quite simply as the process followed by managers to accomplish a business' goals and objectives. Luvuyo and his partners are new to the whole idea of management.Describe the fundamental concepts of management to Luvuyo and his partners for them to effectively manage their partnership.

Question.The management of Silulo Ulutho Technologies has set the following goal for their organization:

Increase market share by 2021 by introducing a new internet and telecommunication device that assists in the process of educating previously disadvantaged communities on the use of technology-enabled devices.

Analyse the set goal in terms of the SMART' criteria for effective goals. If necessary, recommend amendments to the goal.

Should you recommend any amendments to the goal, rewrite the goal with your recommended amendments included.