Total Business Magazine

Mabdoh Transport, cc: Travelling Safely in Style

Born on the 22nd November 1978, I was christened Sifiso Sithole, in KwaZulu-Natal north coast, eMpangeni. I grew up under my mother’s leadership, a retired nurse, with regular communication with my father, a University Professor of management in the United States. I am currently a married family man with a wife, two sons and a daughter living in Durban.

I completed my matric at Futura high school, Durban in 1997 pursuing commerce. I graduated an accelerated diploma in film, broadcast and video technology from Allenby Campus – Pretoria in 1999. I later completed an advanced diploma in marketing studies and a higher diploma in business management both through Damelin College during the years 2000/2001 consecutively and in record time.

Facing unemployment became a challenge and persisted as this is a known phenomenon in South Africa, especially when living in a small town like Margate where my mother had built us a home and where the maternal family originated and settled.

 

The Firm

Mabdoh Transport, cc is a business founded by default. My mother retired in 2002, persuading me to start a business she would capitalise and establish a career mitigating unemployment. Mabdoh Transport, cc was born using the nickname “Mabdoh”, given by my grandmother which I saw befitting the entrepreneurial journey. I joined the Margate public transport association in 2002 as a member, then deposited the first minibus business vehicle altogether costing R50000,00 (£2,700) capital.

The business quickly grew from social and subsistence trading to commercially reaching full membership capacity, and solidified itself as a proper business from which one could make a living.

I formulated a business plan and set up a home office to meet developmental needs. It has since acquired memberships at the Effingham/greenwood park public transport associations and later at Umhlanga rocks, Umngeni and Durban north, maximising combined membership capacity around Durban.

We also have a fleet in corporate platforms at Uber, Taxify and Hoota, catering for those niche markets. The platform employs technology to connect industry (operators) with the clientele’ at a percentage fee, resulting in a booming industry which in South Africa, though profitable, still has teething problems related to human factor (drivers) further training in customer service, basic business and compliance.

The company started a goods transport division, catering to businesses focused on their core activity. We contracted fleets to courier companies that they administer and we, Mabdoh Transport, cc, only attend regular briefing meetings. We also have independent fleets catering for retailers’ delivery requirements at A2Z furniture, Tile Africa, Bargain wholesalers, House and Home to mention a few.

We are a business in the SME sector migrating from a close corporation structure to a proprietary limited company as per government gazette. We operate a virtual business comprised of drivers, driver assistants, casual drivers (stand-in), and contract workers during busy seasons. The management structure consists of a Director (owner), supervisors and part-time team leaders (my sons) who do administrative and cash collection work. The public transport business is a cash operation in South Africa and, therefore, trust becomes central – hence family involvement. Only the fleets on corporate platforms are electronically and regularly paid directly into the business account.

Our products range from the daily conveyance of passengers from the communities to towns and cities and in between them to tailor-made specifications. It has over 50 registered routes within associations combined and is a sought-after business, recognisable within its industry.

There are travel and tour packages catering for the following:

–        School excursions – transporting school children to events such as sports, music competitions and inter/intra-school activities.

–        Elderly transport – transport of the elderly to events organised by churches, local municipalities and government departments and the like.

–        Private hire – for private people travelling for different reasons, e.g., professional soccer matches, music festivals and holidays, etc.

We are also building and developing the goods transport branch, delivering for retailers to communities around Durban.

 

My role

When the business started operating, I was a driver/owner, so I have been exposed to association operations and the business, i.e. the functions of the following:

The passenger terminals, ranking facilities, central office, attending regular monthly meetings, attending to vehicle registrations, operator licensing and cards, vehicle license and testing, bookkeeping and payroll administration.

I still do these functions or delegate to driver supervisors but have additional workload matching the business size. Other duties are vehicle inspection, meeting vehicle mechanics to discuss reports, business development, training and appraisals.

 

Inspiration and expectations

The company was founded by default, curbing unemployment but has, since inception, transformed from subsistence enterprising to proper entrepreneurship. It has proved to be a force to be reckoned with within its industry. Future growth needs are met by training a pool of unemployed youth standing in for drivers over weekends when payroll employees have commitments in social activities such as funerals or weddings. Remember, African people do things as a collective. This assists us in driver replacements when they leave for better opportunities elsewhere, enabling easy and faster onboarding. Therefore, it has gone beyond my imagination as I had originally looked at it as a side income.

 

Impact on society

We have a sizeable workforce relative to our co-operators, and families of employees have been changed for the better. Over time, houses have been built, cars bought, children graduated college and other benefits commensurate with a working person, such as burial membership schemes for employees and involvement in community outreach programmes where we donate to the poor and needy.

 

Transport regulations and legislation

The South African government has an oblivious stance in neglecting the industry and its impact (public transport association) on the S.A. economy. Its only involvement was during the President Mbeki era, where a programme to eradicate old fleets by recapitalising new, reliable fleets through the transport department was launched and still runs today.

However, there is legislation and regulations pertaining to both goods and passenger transportation. The following relates to the conveyance of passengers:

–        The prospective operator must first join an association through membership where and when available or apply to be kept in a waiting list or in a corporate platform.

–        The association or corporate platform will register new operators with the department of transport to be recognised as an operator on their database.

–        Having bought the vehicle, it must be registered, tested for licence disc, operator card and certificate of roadworthiness/fitness (COF) and must be renewed annually.

–        The logbook and COF and operator particulars including tax clearance, association letters at local and regional level confirming membership will facilitate rank permits for both local and long distances.

–        The above documentation allows the department of transport to issue operating licenses, a gold within the transport sector, renewable every 5 years.

–        The drivers must be 18 years or older and be in possession of a code 08 driving licence or higher, plus a professional driving permit (PRDP) at all times when at work.

–        The operator (owner) must be tax cleared for good standing.

–        The vehicles in operation must carry an S.A. flag, have yellow reflector lines, no window tinting, must be self-propelled, have business sticker consisting business address and operator contact details on both sides (left/right) of the vehicle and the lastly the passenger association stickers in front and back of the vehicle.

Corporate platforms require the following:

–        The vehicle must not be 10+ years old and must be tested by the corporation for fitness.

–        They must administer all the documentation requirements on behalf of the operator.

–         Corporate stickers are not compulsory but black registration plates must be present since it is a commercial vehicle.

–         Smartphones are used to connect the corporate with the clientele and the operator, and therefore becomes the property of the business, i.e., cannot be personally used.

Regulations and legislation concerning light goods transportation are minimal and include:

–        Installation of the yellow reflector lines on both sides of the vehicle.

–        Business sticker and the registration of the operator and the vehicle for commercial purposes and recognition. This is different when dealing with heavy-duty (trucking) requirements.

 

Biggest challenges and solutions

Growth potential and development needs companies are critical for their survival, but funding is always lacking. This is a huge obstacle in S.A., especially for SMEs and can render even the most profitable business idea futile. I approached all commercial banks and was declined on the basis of what they deemed a “high-risk business”, for which they had gladly provided vehicular finance on various occasions over a long time period, but refused development finance. Ever determined, I approached government institutions, highly motivated by the credentials in business and meeting the funding criteria, i.e., belonging to the youth and black, having a running business with black economic empowerment status and a positive bank account. These institutions are the industrial development corporation (IDC), small enterprise development agency (SEDA), small business development corporation (SBDC), the trade and industry department, labour department for mentorship programmes, but was also given the same “high-risk line”.

This meant self-financing and strenuous business growth as earnings would be reinvested to the business over a longer time period. Growth is essential as finance packages are tailored to suit business classes. We started forming relations with senior businessmen to secure operational and sound business advice, leading to success. I also motivated myself by reading inspirational autobiographies of struggling political and business figures of Africa and the world, describing how they became resilient and consistent against all odds.

This peer involvement exposed us to a self-financing model used at public transport associations called Stokvels. They are self-financing models where a group of operators contribute a percentage of earnings that are collectively saved over time, usually a year, to be apportioned proportionately as per individual operator contribution plus interest. Members can borrow from the Stokvel to cover cash flow business requirements at cheaper interest rates. Stokvels are bank administered, two appointed members have access to the account on agreement, and any activity on the account is communicated to all members via telephone, SMS and email averting greed and corruption.

This financing model became a solution to our finance obstacles. We invested in three Stokvels to expedite financing requirements and our financial position became very strong, attracting offers from commercial banks who had originally declined us.

Acquiring public transport association membership was a challenge both financially and in getting approval from the association executive committees who are very stringent on their requirements but through networks and good reputation managed to secure these.

Vehicle theft and violence are also challenges we have had to endure and overcome. In addition to the mandatory comprehensive business insurance, our fleets have 3 tracking devices in each vehicle, gear/pedal and central locking systems, panic buttons in cases of hijacks and are monitored through the tracking APP on mobiles and computers.

As a virtual business, our fleets in public transport associations are parked at petrol stations overnight where CCTV camera and security are on duty 24/7 on agreements negotiated by associations in return our fleet (associations) fill up solely on their outlets. The corporate fleet is parked in private parking at a minimal fee.

Other challenges are human behaviour (driver attitude) corrected through training. We train our employees at Africa training centres covering business principles, etiquette and professionalism and customer care, etc.

Lack of government support in assisting the industry to flourish specifically operator business training, access to finance, access to other opportunities within the transport scope and industry empowerment are challenges of great concern.

 

Competitive advantage

Mabdoh transport, cc seeks to present itself as a 100% black-owned business with black economic empowerment credentials. We pride ourselves on the quality of our human capital, upmarket and highly maintained fleet, the comfort and entertainment on the vehicles, i.e., DVD players and sound equipment especially for long distance drivers, safety and compliance standards, i.e., all documented drivers and vehicles programmed not to exceed 100 km p/h and the overall hands-on management and branding of the company hence our slogan, “travel safely in style”, are what distinguishes us from the rest.

 

Customer service

The company employs matriculated personnel and drivers must also have driving licenses plus PRDP and further trains them externally in areas relevant to customer service. Our fleet is timeously maintained to avoid breakdowns and improve reliability and positive customer perception which ultimately impacts on service. Our fleets have entertainment, are contracted to car-wash shops for clean-up, boost air-conditioning and heater for everchanging seasons and our visible community involvement raises service levels through positive perception.

 

Milestones and key events

The milestones we have overcome are mainly funding and association membership. The requirements on these differ but basically are as follows:

–        The prospective operator must be an S.A. citizen or a permanent residence.

–        Must have lived in the area where the association operates for more than a year.

–        Must have a joining fee which ranges anything from R20 000.00-R100 000,00 (£1,050-£5,200) depending on how lucrative the routes are.

When corporate platforms came into the market, it was relatively easy to register vehicle fleet on them since only require the following:

–        The driver to be 18 or older with a driving licence plus PRDP and an active profile.

–        Ability and availability for the driver to be trained on-site at R500,00.

–        Vehicle inspection and registration.

–        A smartphone where an APP is downloaded for driver, customer and corporate communication, then an operator is in business.

The business launch and company logo (personal design) unveiling stand out as key events and defining moments that have made the company what it is today, a distinct and familiar brand within the industry. Our brand also defines hard work and investment to its worth and soundness. It is recognisable in T-shirts, vehicle stickers, events flags and gives us pride whenever we rethink the journey.

 

Defining factors

–        The never-give-up attitude.

–        Perseverance and consistency.

–        Peer involvement and helpfulness.

–        Having a vision translatable to actions.

–        Reading motivational literature and inspirational movies, and.

–        Exemplary management and listening attitude.

 

Recommendations for budding entrepreneurs

For aspiring entrepreneurs, I recommend:

–        Interpersonal, teamwork, management and leadership skills.

–         Patience, inner -strength, resilience and creativity.

–        Self-belief, determination and unchanging spirit (backbone)to keep consistent.

–        Peer engagement walking the journey and the successful for guidance and wisdom.

–        Read on inspirational figures like Sir Richard Branson, Tiger Woods, Bill Gates, Mark Zuckerberg, Patrice Motsepe, Cyril Ramaphosa and others learning how they started from humble beginnings to create multi-billion-dollar multinationals so that you can fall somewhere within the successful no matter how small or insignificant.

–        Register in guilds in your area exposing available opportunities, growth areas and develop business and personal networks.

 

Future for Mabdoh Transport, cc

We aim to strengthen our goods transport division by procuring long-term contracts in big firms, outsourcing their transport needs to external companies, focusing on core businesses. Having a business profile, history and complementary requirements, this area is of growth and potential – the trucking industry.

We also aim to build the capacity of management by training supervisors in basic business and management practice, and the owner undertaking an Honours degree study in business, in line with future growth.

Our objective is also diversifying into the agricultural sector, specifically poultry farming. The core business will be eggs and complimentary poultry products. The research area on the honours study next year will focus on this farming area for information and better-informed business decisions. This farm will form a head office and business premises for the incorporated company.

We have also commissioned a web developer to produce a company website, so we can have an online profile where other revenue streams can generate within the confines of supply parameters.

 

In conclusion

Entrepreneurship is not for the faint-hearted, but can be very rewarding. It is like a young child to be supported emotionally, physically and psychologically through life up to independence. Whatever effort the entrepreneur invests in the business, is what the business yields in output terms. One has to live, dream and be the business – no obstacle has to be in the way of a vision and success.

I live with the motto that the late President Mandela observed: “There is no passion in settling for a life less than you are capable of living,” and so it’s not how everything starts and evolves in the face of destiny, but rather the ending and legacy of what started a project into a successful enterprise.

Mabdoh Transport, cc – “We are still travelling safely in style.”

 

Tel number : +27738302703

Cell number : +27670026869

Email address: sfisojobe74@gmail.com

Email address alt.: sihlejobe74@gmail.com

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