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Simphiwe: Embroidery Business

 

Simphiwe lives in Gugulethu, one of the city’s older and more established townships. Originally his business idea came as a way of making sure kids didn’t get lost by embroidering information such as names, phone numbers and addresses on their clothing. Simphiwe does embroidery work and his service is very popular with high school students who want to look trendy on “casual Fridays” or with people attending traditional gatherings who want to wear their clan names on their clothing. He loves the freedom that comes with being a self-made entrepreneur and is determined to build up his business.


Recommendations & Results


Accounting and profitability management

Simphiwe did not know whether or not his business was profitable. The IC students provided him with accounting tools and he is now able to track costs, establish pricing and control the profitability of each order. Nowadays Simphiwe only accepts orders that guarantee a 40% margin.


Supplier change

Simphiwe’s supplier used to be 30 Km away from his location but he has found a new supplier that is much closer. This saves him both time and money.


Marketing and demand

Simphiwe advertises his business through flyers at schools. Simphiwe has no problem finding customers and is concerned that he may not be able to keep up with the demand for orders without a embroidery machine.


Going further...

Simphiwe is now trying to save in order to buy a machine, but he has encountered difficulties in trying to apply for a loan. “There is market in the embroidery”, says Simphiwe, “The only thing I need is a machine”.


If there is a market and a demand than why are these types of machineries unaffordable? What role do financial institutions play in helping Simphiwe and other entrepreneurs get access to loans? How can he extend his own source of income towards purchasing a machine that will increase his profits and keep up with his demands?


Fast Facts

> Revenue: 15 000R to 20 000R a month

> Main income stream: large orders from schools
> Potential market: Political parties, big companies, event planning



Challenges

> Needs a machine to meet demand

> Has difficulty understanding business profitability