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How To Achieve Double Digit Growth During A Downturn When siblings Shilpa and Ushir Mehta purchased Production Logix in 2015, their aim was to grow the business. Here's how they've achieved double digit growth, faced their challenges and focused on putting people first.

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Shilpa Mehta

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In 2015, Shilpa Mehta and her brother, Ushir, purchased Production Logix, a Durban-based business launched in 1996 by John Goncalves.

During its first two years with the Mehtas at the helm, Production Logix grew by between 20% and 25%. The company assembles printed circuit boards, which drive almost every electronic device used today, and supplies clients from manufacturers of military equipment and car tracking devices to electricity and water meters.

VW South Africa recently appointed Production Logix to manufacture a component as part of its Ntinga Supplier Development Project and this has opened the way to enter the automotive sector.

Related: How Matt Brown Quadrupled His Business By Becoming A Niche Player

Despite a depressed economy, Shilpa and her brother have continued to pursue growth for the business. These are the lessons they've learnt along their journey.

1. Research and data are the keys to success

"I was fortunate enough to buy a business, so I missed a large part of the startup phase," says Shilpa. "We were able to come in and focus on growth. During the acquisition we'd been given great insights into the financials, customer base and future business of the company during the due diligence process, and these all proved to be accurate. This gave us a great knowledge base that we've leveraged to grow the business."

2. People – and understanding your human capital – are essential

"The one part that was missing from the audit was an actual understanding of the human resources and people management part of the business," says Shilpa. "The business was part of a bargaining council, which meant that most elements, from remuneration to incentives, were out of our control.

"With a staff compliment of over 250 people at the time, it was our biggest cost driver, which was largely dictated to us from an external body – and we had no idea when we bought the business.

"Had we known about this, our view on the business would have been somewhat different. The team, myself included, then had to spend almost 18 months on numerous consultations and a restructure in order to get this streamlined. We knew this was critical to building a sustainable business.

"This was time taken that could have been spent on growing our business, implementing new systems and increasing our customer base, but ultimately, you cannot ever ignore the human element in your company. Employees account for a large portion of your cost base – particularly in a manufacturing business, and if this isn't streamlined, you will never make the margins you need to build a profitable business.

"The hard work paid off, but it's a huge lesson for us on any future acquisitions."

3. Do what's right and always keep your word

"I've learnt many important lessons over the years, but one that really resonates with me is to always do what's right, keep your word and be honest, even if it's painful and you regret agreeing to whatever you agreed to at that point in time.

Related: The Hard Truth About Being Impeccable With Your Word

"If you have promised something, even if it is verbally, stick to your word. At the end of the day relationships matter; it may not seem important at the time, but the Industry in South Africa is small and you and your brand are important.

"A few years down the line, when you need the help, you'll be glad you stuck to your word. You'll be surprised to see how far it gets you when you're in a tough situation. The credibility of sticking to your word helps when a reference check is done on you or your business as well.

"In our business we are a contract manufacturer without a single contract in place and we've managed to build business relationships that last due to always keeping our word."

4. Take input from your smallest stakeholders to your largest, including your employees

When people see that their input is valued and acknowledged, they immediately know their worth and are empowered.

"Those small implementations and discussions are hugely beneficial for morale. Any small changes or processes you can implement that will make the lives of your customers, employees or suppliers easier will go a long way in establishing a relationship of transparency and open communication. It will also lead to continuous improvement and innovation."

Always ask the question: How we can do it better? – Even if it's working.

5. Deal with problems as they present themselves

Lastly, and one that's often not spoken about is not allowing problems to fester and bad habits to continue.

"When a situation at any level is brewing, be it internally or with a customer or supplier, address it head on. Get the relevant stakeholders together and leave with the situation resolved. Don't assume someone else will fix it, because they won't.

"Small issues usually escalate and spiral out of control. The time and energy saved upfront through creating a resolution or clearing out the confusion will pay off in the long run. Deal with challenges and the people involved clearly and swiftly and communicate honestly."

Related: Leveraging the Upside of the Downturn

Nadine von Moltke-Todd

Entrepreneur Staff

Editor-in-Chief: Entrepreneur.com South Africa

Nadine von Moltke-Todd is the Editor-in-Chief of Entrepreneur Media South Africa. She has interviewed over 400 entrepreneurs, senior executives, investors and subject matter experts over the course of a decade. She was the managing editor of the award-winning Entrepreneur Magazine South Africa from June 2010 until January 2019, its final print issue. Nadine’s expertise lies in curating insightful and unique business content and distilling it into actionable insights that business readers can implement in their own organisations.
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