Not Black Like Me – Herman Mashaba says our Government has failed Small Business.

In my Professional Opinion

By Dr. Ivor Blumenthal

In 1981 Herman Mashaba became a commission-earning Sales Rep. He worked for a couple of years looking for opportunities to start his own business and to find the freedom to be independent. He didn’t want to work for a salary. He wanted to be his own boss. In January of 1985 he found that opportunity and began manufacturing hair care products for the Black market in Garankuwa, in the former homeland of Bophuthatswana. He had to set up there because it was not legal at that time for a Black man to do such things in South Africa-proper.

His product distinguished itself, in his view, because of the “Black-Like-Me” brand. It was a name coined by Walter Dube, the man who funded the venture.

“We were three hungry business guys who wanted to make money. Me, Josef Molantu and Johan Kriel. Three non-racial partners, who each added a different dimension to the business. My survival has always been dependent on me complimenting myself with like-minded human beings.”  They could do things he couldn’t. Mashaba adds, “I admire the capitalist system and I admire capitalists who I always look to hook up with.”

The podcast of my Interview with Herman Mashaba is on the “Contemporary Business” Facebook Page.

I asked Herman Mashaba whether he thinks he would be as successful today with the enabling framework which has been created around BBBEE? “No.” he shouts. “If I look at the situation today for small business as compared to then, I stood a better chance of making it then than now.” Mashaba is adamant that we have a legislative framework today that is “not conducive to the running of small business” particularly the labour legislation.  He adds “I cannot understand why our Government is so unfriendly to small business. I started small with two partners and my wife and grew one employee at a time. Today small businesses are not given that opportunity with labour legislation the way it is.“

Black Like Me started encountering Trade Unions in the mid 90’s. Before that Mashaba says the company cooperated for many years with his staff not being unionized. When the new SA was born he says that people were promised “everything in the world”.  According to him that’s when small businesses started experiencing major challenges.

He admonishes that “now, in 2015 we have the proof that this country has dismally failed to create small businesses. The reason is because the legislative framework is very unfriendly. On paper a lot of money flows to small businesses but in real terms we are failing horribly as a country.”

Herman Mashaba, successful Industrialist, on-behalf of the Free Market Foundation, is spearheading a Constitutional Court Challenge to strike down section 32 of the Labour Relations Act, which he maintains is totally unconstitutional. He says it is directly responsible for the destruction of small business in SA. “It permits closed shops to be created between big business and trade unions that create impossible conditions of employment for small business owners to honor.”

Once signed into an agreement the Minister of Labour has no choice but to extend that agreement to what are called non-parties, covering the entire Industry, large and small.  Mashaba maintains that the Minister of Labour is not only responsible for big business but all players including the small businesses in every sector. The Minister must look at the overall labour environment including unemployed South African’s. “We are asking the Minister to be given the right to review agreements before extending. The act should substitute the imperative “must” with the word “may”. We say that the Minister must have discretion in this matter.” Ironically when Mashaba and the Free Market Foundation appealed to the Minister she was totally disinterested in their submission. “Unemployed South African’s and Small Business doesn’t seem to be her priority.”

Mashaba is dismissive of the Small Business Ministry saying that all the Small Business Ministry does is “run conferences”. He says, “We have always had the Trade and Industry Department. We don’t need more ministries. What we need is Governments willingness to engage on these issues.”

On the issue of the Industry Mashaba has become an expert in, the cosmetic manufacturing Industry, he challenges my assertion that Africa and South Africa have on-occasion been a dumping ground for personal-care products from countries in Europe and other’s such as China. He corrects me saying that in his experience that is not the case and that he and his competitors have always had a strong tradition of manufacturing their own products rather than importing them. He is expansive on asserting passionately that this country has always been a solid manufacturer of Personal-Care products. “We need our government to continue to create an enabling environment for manufacturers to manufacture as they always have. Ultimately though it is up to consumers to choose whether they want to buy locally manufactured or imported product.”

That’s what the Free Market Foundation stands for. International branding plays a key role in South Africa’s consumer behavior and choices. This is a global phenomenon.  India and China faces the same challenge. “It is up to us as business people to find the way to attract the attention of consumers.” That’s why Black Like Me was a relevant brand. The name captured the attention of the market.

Markets keep moving. Brand loyalty is not set in concrete. “As marketers we have to continue to do market research and to be innovative.” In the 80’s Black Like Me was extremely relevant. “We worked on instinct. Having personal and direct contact with customers. We only started using research vendors at a later stage as the company grew.  He dislikes the fact that today’s entrepreneurs have expectations based on instant gratification. “That’s not possible!” He asserts. It takes pain. “I used to drive 10 000 k’s a month. We didn’t use FMCG companies. We did our own merchandising for the first 10 years. I delivered product to salons, collected money. Only later did we establish area distributors.”

Interestingly his strategy was not to chase the National Chain Stores. “We waited for them to approach us and ask for our product to be listed with them. My advice to anyone wishing to list with the multi-nationals is to be sure that you have a big marketing and advertising budget. In our case we were lucky enough that the trade came to us because we created the demand.”

Herman Mashaba asserts that if he could advise the President on what needs to be done for small business he would beg for a review of the labour legislation to make sure that its friendly to small business. Secondly he asserts, “We need to remove all race-based legislation. We need to allow all South African’s to really be South African’s first. Yes we need transformation of our economy to include the disadvantaged but we don’t have to do it through legislation because that polarizes the nation. These practices can only hurt the country. The country cannot benefit out of racism. If we didn’t have racist laws in this country our economy would be doing much better. Then the disadvantaged would be the biggest beneficiaries. Our economy has the potential to grow 5%-plus with race removed from the equation. Encourage and incentivize our citizens to be one nation.  By passing racist legislation we are forcing our kids to see color. To be polarized.”

For me his final comment to me is the most telling: “What hurts and saddens me is to see Madiba’s own party dividing us as a nation. “

Herman Mashaba is possibly the only South African capable of being Minister of Trade and Industry and making a difference. The question begging, is why has he been overlooked and passed over in-favor of Ministers who have never worked a day in their lives let-alone mastered anything of importance?