Scaling Up Is Tougher Than It Looks
How Marisa da Silva has implemented a 'cut, cut, grow' strategy to ensure growth in a decades-old business.
- Player: Marisa da Silva
- Company: Infanta Foods
- Established: 1994
- Visit: infanta.co.za
Marisa da Silva's parents founded Infanta Foods in 1980. It's a manufacturer and distributor of raw materials and ingredients for the baking, confectionery, milling and biscuit industries. Marisa joined the business in 2013, although she started working there from the age of seven and basically grew up in the factory.
Her brother Alex had joined full-time three years earlier. Having completed a BCom Honours degree in business management, she brought to the family-owned business a fresh way of doing things and a keen understanding of how to do business in today's tough economy.
The Challenges of Scaling Up
Rapid growth can be a perilous thing. Scaling a business is tough, and it presents some serious challenges. But after Marisa completed a business coaching programme, she realised that she wanted to take Infanta Foods from a family business to a family empire. The big question, however, was how to do that with an established business that was already more than 30 years old.
Implementing a "Cut, Cut, Grow' Strategy
Shortly after Marisa joined the business, she had a lightbulb moment — the best way to start was with a "cut, cut, grow' strategy. "Coaching taught me immeasurable skills, and one of the most important was that there are always ways to cut back on costs.
When I introduced that concept to the family, it was like a tinder to the flame. No matter what business you are in, the precursor to growth should be to delve into the company and look at every single expense."
And she means every expense — from insurance fees to coffee, stationery, pens and toilet paper. "Think of the business as a ship," she says. "If you move forward without plugging the holes that are draining your cash, the ship will eventually sink."
In two months, Infanta's expenses were down by 23%; the following month they were cut by a further 38%. In the third month the business began cross-merchandising and upselling, pairing a muffin mix with a pie filling, or a hot cross bun mix with raisins.
But then Marisa faced a challenge common to many businesses that are scaling up — operational capacity. "Because our growth happened very quickly, our machines were close to running at 100% capacity, so I did the sums around how many more sales were needed before we could buy additional equipment.
"As much as I tried to plan and forecast, things never work out in reality as they do on paper. We reached full capacity in two months instead of three.
"What helped was that because I had started to do the research a few months prior, we had already started to think about the buffers we could put in place. Forward planning is really essential.
"On the personnel side, because we were looking at new equipment, we had to restructure and reallocate the team. We also needed to start hiring.
One of the problems with hiring people when you need them is that you don't necessarily get the best candidates — you get the best candidates available at the time.
"Once again, we had started vetting people months before, so that exercise was not as tough as it could have been."
Transparency is Key
According to Marisa, communicating with staff was critical because when people are empowered with knowledge, they are also supportive. She let them know that the business was in a growth phase, and that she wanted the team to have an opportunity to grow too.
With operations sorted, suppliers became the next big challenge.
As a business grows, it often gains much bigger clients. In Infanta's case, the first big win was a biscuit factory in Mozambique. "We needed to ensure we had the right number of suppliers in place to enable us to fulfil the orders, as well as back-up suppliers, "just in case'. We also had to deal with regulations and rules of origin as we were dealing with a foreign country with its own set of rules."
A big question she says business owners must ask is, can your suppliers provide you with what you need if you triple your business?
"When you're on a growth curve, take a month's purchases from a specific supplier, call them and ask them if they could fulfil your order if you tripled it in size. If their answer is no, best you make a plan."
Marketing was also Marisa's baby. "The business was old school," she says. "I relooked the website, our Facebook pages, and our brand awareness. We didn't even have our logo on the invoices."
Working through these challenges enabled Marisa and her family to 5X the business. It now moves more than 210 000 kg of goods per week. From being purely B2C, it now also has a retail arm operating from the premises in Pretoria, and supplying wholesale products to consumers.
"We showed the market that we are able to innovate," she says. "The fact that we are embracing new opportunities has changed people's perception of the business. Now, when customers are looking for a new product, they will come to ask us if we can do it, because they know we have embraced innovation."