MD of Agro Tractor*
This is an extract from My Success, Your Success: Top tips from South African women entrepreneurs. It is reproduced with permission.
Maybe it is because her grandfather was a farmer, but Virginia Morule has always had a passion for farming. Now, as MD of Agro Tractor, a company that specialises in selling agricultural machinery – including tractors, trailers, fertiliser spreaders and more – to small-scale and emerging public and private sector farmers across the country, she is finally getting a chance to make a meaningful contribution to this all important sector of the economy.
‘Small-scale farmers are critical to South Africa’s economy,’ she says. ‘Farming has a role to play in the alleviation of poverty, job creation and in giving people much-needed financial independence and wealth. However there is a perception in South Africa that small-scale farmers will not succeed if they are not empowered.’
This is where Agro Tractor comes in. It is Virginia’s fervent hope that her business will play a role in empowering these farmers not only by selling them appropriate technology, but by working with them to grow their operations sustainably.
Founded in 2004, Agro Tractor is not Virginia’s first entrepreneurial or agricultural venture. Originally from a dental background, she has tried her hand at a number of businesses over the years, even attempting to be a small-scale farmer herself at one time.
‘The truth is there has always been something of the entrepreneur in me,’ she says. ‘When I was still at school I would always be selling things to make a bit of extra money on the side.’
This entrepreneurial spirit was very much in evidence when she decided to put her career in dentistry on hold to be a full-time mother to her three young children. In her spare time she also started two small businesses: selling milk and chickens produced on the family’s smallholding and running a restaurant.
These enterprises were extremely successful. Virginia says that at this point she knew she had what it took to make money but recognised that she lacked the basic business skills to turn her knack into something more sustainable. She took steps to remedy this by doing a bookkeeping course. Then, in 1992 she went back to university to study full-time (although she worked part-time to finance her studies). Four years later she had a BA in International Relations and a Postgraduate Diploma in Development Studies from Wits University. She capped her studying with an MBA from Millpark Business School that gave her exactly what she was looking for in terms of business know-how.
Armed with her MBA, Virginia set up as a business consultant and worked as a Khula mentor helping other small businesses to write business plans and to access finance. During this time she met her business partner Villy Iversen – a Danish national who was in South Africa representing Danish agricultural company Bredal looking to establish a partnership with a South Africa consortium. Initially Virginia worked to facilitate the negotiations between Iversen, Staalmeester and Bredal. The deal fell through, but Virginia and Iversen remained in contact. She continued to do some research into South Africa’s agricultural landscape for him and this eventually led to their deciding to form a joint venture which turned into Agro Tractor.
Agro Tractor’s business proposition was simple. They would import quality products from European manufacturers (including Bredal) such as tractors and trailers that were more flexible and functional than other products on the local market, and sell them at a good price to South African farmers. But more than that, they would also work with their clients to ensure that good advice was given to them at the time of purchase and that good follow up service was in place to support them on their journey forward.
Virginia says they realised there was a gap in the market to target small-scale emerging farmers because they lacked basic skills in farming and needed better support to make their businesses profitable. These farmers also needed products tailored to their needs.
This was something more than textbook knowledge for Virginia. She had personally come to appreciate the difficulties inherent in small-scale farming when a few years earlier she had bought a piece of land to try her hand at farming.
‘I had a tractor and some animals – but the tractor was often breaking and it was difficult to locate spare parts for it or a proper service,’ says Virginia as an example. ‘The experience made me realise that there was a gap in the market for a company to provide this service. I also made basic mistakes that if I had had someone to support me and give me good advice I might not have made.’
Determined to help other farmers not to make the same mistakes, Virginia set about getting Agro Tractor up and running. She found premises in central Johannesburg and started to puzzle her way through the mounds of red tape associated with getting an import/export licence. For the first year business was slow, but by 2006 sales were picking up and Agro Tractor was turning a healthy profit.
Then, just as things were starting to look good, the business ran into difficulties when Virginia decided to relocate to premises outside of town. The reason for the move was because she wanted to be nearer to her client base – farmers. Although a good idea in itself, the mistake she made was that she did not plan the move thoroughly enough or consider its full impact on clients. For example, they moved towards the end of the year, which is a prime buying time for farmers and did not tell their clients long enough in advance that they were moving. The result was that they lost a lot of business.
‘We won’t make that mistake twice,’ says Virginia. ‘I have learned that it is vital to plan well in advance for such an important event in any business.’
Another difficulty that Agro Tractor has encountered has been the fluctuation in the rand. As an import business, it is particularly vulnerable to this instability. To deal with the problem Virginia says you have to be inventive as well as strategic. For instance, in response to the latest dip in rand strength, Agro Tractor is planning to change its production line slightly. Instead of importing fully painted finished products, it plans to import unpainted parts which can be assembled and painted in South Africa for less. Virginia and Iversen are also working on growing their exports – particularly to other African countries that are not as affected by the rand. Now, in addition to five licensed dealers around South Africa, they have a few in African countries as well – two in Zambia, one in Kenya and one in Uganda and a sales person in Angola – and this is just for starters.
Virginia says that this impressive growth has been driven mainly by word-of-mouth marketing. ‘Although we do advertise locally in the agricultural magazines, mostly our business comes from referrals,’ she says.
She speculates that this is because the equipment that they sell is of a high quality so clients hardly ever have problems with what they buy. The other crucial factor is that they have a reputation for being so much more than just sellers of agricultural merchandise.
‘We see our relationship with customers extending beyond the transaction. When we deliver a new equipment for instance we do so in person and we make sure that we train our customers how to use and look after their new product. We don’t want them to break things or to do something that will affect the warranty so we are careful to show them what to do. It makes business sense as well as being ethical because it is in our best interests for the farmers to do well and to prosper.
Virginia says that when it comes to using agricultural machinery, it’s the simple things that count – and a little investment in time and care goes a long way.
‘For example, we tell our clients that it is important to keep the manual safe. This is vital if they want to sell the equipment on at some stage and for the warranty. And we tell them that it is important to store the tractors and trailers indoors and keep them locked up to minimise theft. These are things I myself did not do when I ran a farm – to my own detriment. It seems obvious but people do not think about it.’
Virginia says that part of the problem is that very often many small-scale farmers are not familiar with the machinery they have bought. Some of them may be new to farming or new to farming on this scale and might never have operated a tractor or a fertiliser spreader before and yet these machines are very specialised and need to be treated accordingly.
‘Driving a tractor for instance is not the same as driving a car,’ says Virginia. ‘There are things you need to know. For example, you need to check the water, oil, lights and the indicator star lamp every morning to make sure it is ready for usage.’
She knows what she is talking about. When she got into the tractor selling business she made it her business to learn everything there is to know about her product and this included learning how to drive them. She says that this has had the advantage of making her male customers take her a bit more seriously but is also an important ethos of the business.
‘I am a firm believer in knowing your product. You can’t tell other people what to do if you can’t do it yourself. And not just me – but every member of my team is able to speak with authority on any of our products. This means whoever picks up the phone to the customer is able to sell, you want your customers to know that you are not a chance taker!’
To keep herself up to date with everything that is going on in the industry, Virginia travels a lot to exhibitions and to product launches both in South Africa and overseas. ‘I like to learn as much as possible how people do things,’ she says.
She is always eager to feed that information back into the South African industry and does this not only informally when interacting with her clients – but by giving talks. She also goes way and above the call of duty or business and has personally invited farming practitioners from Europe to South Africa to give talks and training to farmers on different subjects or commodities. In many ways, she says, she feels like a self-appointed ambassador for agriculture in South Africa.
‘I feel that I need to plough back into the community some of what I have learned so that they too can sustain their businesses,’ she says.
‘With enough determination, passion – and the right assistance small-scale farmers can succeed,’ she says. ‘But they need people who can help them grow step by step. I tell farmers that before they put money into a farming business they need skills and if they want to make money it will depend on their passion. Farming is a long-term project which does not give results in a short time.’
It’s the same standard she holds herself and Agro Tractor to. Virginia has a vision to grow her own business, but she also wants to grow her small-scale clients until they reach commercial level. And if her own passion and determination are anything to go by, this tractor driving, MBA wielding ambassador of agriculture won’t let them or herself down.
Virginia’s top tips for success
1. Make sure you have the right knowledge to run your business. Everything in business is about learning and knowledge. In my business I had to start from scratch. I went to Europe and went to every exhibition I could on agricultural equipment. I would go to my suppliers to make sure that I understood the business inside out. I insisted on getting training from the manufacturers and organised for them to visit South Africa so they could train my team as well. And remember learning is ongoing – technology is changing all the time and you have to keep up with it.
2. Cherish your brand and reputation. Word-of-mouth marketing is more powerful than any advert in any magazine. But you have to work hard to build up that reputation. It comes from being ethical and doing the best for your client. You need to understand that in business you and your client are in it together. You must be part of them, you cannot break the circle, they need your help all the time. It has always worked for me. For instance, we were able to get some business in Namibia, not because we advertised in that country but because people farming there heard about us from our other clients.
3. Be passionate about what you do – you will need that to sustain you. Make sure that your business is not only about making money, you also need to love what you do in order to be able to help other people when they need advice from you.
4. Make use of institutions like Khula, SEDA, IDC, Gauteng Enterprise Propeller and Umsombovu to get information on how you can start a business as they are able to help in issues like business plans, company profile, marketing and other issues related to business.
5. Keep your business and personal finances separate. If you mix the two things it can get messy and you can end up not running the business properly. Business money is there to make the business grow not to buy you personal things like a fancy car.
6. Retain your staff by investing more in skills development within the company. Training of staff is a form of empowerment as they will stay in the company and avoid job hopping. You can also accommodate your staff in the business by being approachable and building a good working relationship with them to discuss difficult things that relate to their life personally and to the business. By doing that you will find that they can contribute to the business strategy and protect the company brand. Reward them for their performance to acknowledge the fact they are making contribution that is adding value to the company. Basically the success of the company depends on you and your staff.
7. It is always good to have a mentor/ coach who can guide you all the time to make your business sustainable, successful and to grow.
8. Family to me is very important as I cannot imagine myself functioning without them. I balance my business with the family by dedicating time like having breakfast and supper together to discuss anything relating to our lives. As a Christian my faith in God sees me through each day.
9. When you have a business you must not be discouraged by problems. You must be courageous and fearless as setbacks can be turned into opportunities.
10. Yes, accessing finance is difficult but for you to get assistance you must prove to the investor that you know the business and your business plan is bankable. It is always advisable that when you get someone to write a business plan it must be your input as you are the one responsible for doing the presentation and you must have a bit of understanding on things like financial statements.