In a country that is desperate need of successful entrepreneurs, BiBi Cash & Carry Supermarkets offers an inspirational story.
The supermarket chain was founded 23 years ago by Tommy Makhatho, who started working as a waiter at the Carlton Hotel in Joburg. The company is the largest retail operation in SA wholly owned by black people, now has 7 massive outlets in the Free State and 2 in Gauteng.
BiBi’s competitive advantage over the bigger retail stores has always been its superior local knowledge, its flexibility as a smaller player and also, its determination to operate close to the townships and communities where most of its customers live.
The year was 1976 and Mzansi was burning, as the black youth was protesting against Bantu education.
It was then that the 18 year old Tommy Makhatho walked out of school with nothing but a dream. Although life was hard at the time, he was motivated to try his hand at anything.
It took Tommy over two years to get a lowly job as a waiter at the Carlton Hotel in Joburg. It was there where his life changed forever.
His life changed the day he met Brian Gule, a flamboyant hairdresser who was dressed in a cowboy hat and boots.
According to Tommy, he was amazed by how Brain would come to the hotel every day and tip him more than what a cup of coffee costed.
Brain liked him because he was always curious about his business and was always eager to learn.
He then took the opportunity to ask him what he was doing for a living and couldn’t believe what he heard…..Brian owned a salon in Soweto.
Brain gave him his first break and employed him as a trainee shampooist in his salon, Blackwave. Tommy then went on to qualify as a professional hairdresser.
Blackwave always had long queues of people who wanted their hair done. That’s when he realized why Brian was making so much money from the business.
Tommy takes a leap…
In 1982, with R7 000 in the bank, he decided to leave the salon and go at it alone but sadly, he failed to build a clientele and was soon forced to ask for his job back.
According to Tommy, he was over-ambitious and made a mistake of not planning properly.
A then married Tommy resigned from Blackwave salon again and left Soweto for QwaQwa, to launch a salon on the 16th of April 1984, this was make or break.
His wife Thandeka, a teacher by profession, joined the salon business and in four years, they had six branches and R300 000 in the bank.
But the rapid expansion made it difficult for them to control the operation, as they couldn’t manage the business from a distance. This forced them to close the other branches and go back to the original salon.
The experience taught him that distributing hair-care products from a single main centre would be much easier to control and manage.
With the money generated from the salon business, the Makgathos opened Jabula Cosmetics in 1991, a cosmetic distributor supplying hair products around the Free State.
There were close to 3 000 different stock lines, which meant the business was in need of more storage space and also, more sophisticated planning, management and control systems. Another warehouse was opened in 1992.
BiBi Cash & Carry Supermarket
In 1998, Tommy ventured into the supermarket sector and launched the first Bibi Cash & Carry store in QwaQwa.
According to Tommy, the name “BiBi,” came when his son Setjaba, couldn’t pronounce his older sister’s name, Nwabisa, so he made things easier for himself by calling her BiBi.
It dawned on him that if a 2 year-old boy could find it easier to call someone “BiBi,” so will the rest of the market…he then officially registered the business, BiBi Cash & Carry Supermarket.
All profits were reinvested back into the business for further expansion. In 1999, a 2nd store was launched at the Setsing Shopping Center. In 2004, a 3rd store was opened at Naledi Mall. BiBi Wholesalers then opened its doors to service small-to-medium enterprises in 2006.
When they conducted their year-end projections for 2006/7, they realized the last two stores wouldn’t survive, so they closed them down, with the aim of looking at other locations.
From the profits of the two Supermarkets, they launched two more stores in 2009 and 2010, respectively. Two years down the line, the first Joburg supermarket was opened.
According to Tommy, one of the most important lessons he’s learnt over the years is that running costs always increase, so if you don’t branch-out, you won’t make profits.
In 2013, he was honored with Sanlam Business Partners Entrepreneur of the Year. In his acceptance speech, he said his dream is to become theee major player in the FMCG market of Africa.
The Makgatho family currently owns 9 Supermarkets, 32 Bibi Express Stores, employing more than 800 people, indirectly supporting 3000+ families. They also contribute to most community-based projects and provide bursaries to a number of students who come from disadvantaged backgrounds.
Makhatho’s son, Setjaba, joined the business as a systems manager, after two years being in management at the Southern Sun Hotel Group.
According to Tommy, he sees himself in Setjaba, as he’s a dreamer like his himself and highly innovative. So with him on board, there’s a guaranteed 30 years in the Makgatho family businesses.
Out of all of Tommy’s four children, Setjaba is the only one involved in the business. Nwabisa on the other hand, followed her mother’s footsteps and became a teacher.
In the future, BiBi is looking to expand to all the 9 Provinces in South Africa and also, a possible listing on JSE to raise more money.
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