‘We have learned from our mistakes’

He made history by becoming the first Believe Begin Become
grand prize winner when TechnoServe inaugurated the business plan competition in Swaziland, back in 2006.

For his efforts, he received E150 000 as prize money to invest in setting up his business. However, he needed a further E150 000 in the form of a bank loan to successfully make his dream come true.

Phila Msibi started operating SG Power Products and Services, which is based in Nhlangano in August 2007. In November the same year, the US Ambassador to Swaziland Maurice Parker officially opened the business, in an event that brought together his suppliers, customers and other business stakeholders.

SG specialises in the supply of quality power tools mainly required by the forestry contractors such as chainsaws, bush cutters and lawnmowers for the domestic market. It also provides the backup spares and repair services for the full range of products that the business stocks.

Msibi was motivated to start such a business because of a gap in the market. Contractors in his region had to travel to South Africa in order to get such products and services. The business immediately established itself into the market. During the official launch of the business last year, Msibi pointed out, "We have already secured 60 percent share of the Shiselweni market. We also have plans to expand the business to other parts of Swaziland."

Ever since then, he revealed that SG has continued to gain recognition outside the Shiselweni region, from areas as far as Simunye in the Lubombo region. He observed that being a winner in the business plan competition has played an integral part in marketing the business.

Offering credit to your customers is sometimes an option to remain competitive and get more orders but there are adverse effects if this is not undertaken with care. Msibi can attest to an experience with offering credit to his customers.

"We made a mistake by starting at an early stage of the business to offer credit facilities to our customers. It started off very well as the customers would pay on time and we considered some as loyal customers and credit worthy," he explained. "Since we had confidence in them, we allowed them to take up large stocks and that’s when the problem started. They could not pay the full amounts owed and this badly affected our cashflow."

As experts observe, the damage caused by non payment (bad debts) can be significant, and the longer the period of credit that is offered the more opportunity there is for the customer’s circumstances to change, and hence payment to be delayed - in some cases permanently. 

Msibi had to curb the situation by stopping offering any credit facility. "Although this did not go down well with some of our customers, the business is back on its feet and stabilising. The good thing is that we can ensure that we have money coming in and we can pay our suppliers without hassles," he said.

Msibi said maintaining high quality standard especially in the service aspect of the business has kept his business going. Currently the company is employing three full time employees and two others are on a part time basis.