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Entrepreneurs build the future

When you have been around the block a couple of times, you learn the lay of the land.

You also learn that greed and sustainability are mutually exclusive.

Plantech Associates is a specialist consulting engineering firm and the Pretoria-based business has been around since 1981.

For someone like Managing Director Hein Schuld, the recent economic crisis was just another recession.

The first recession Plantech faced in the mid eighties nearly killed it and Schuld and his three partners knew that it would not be the last their last.

"Many people want to make as much money as possible. This is not sustainable because there will be dips," he explains.

Fellow Director James Theron echoes this, saying that they took the decision then and there to create a robust, but stable business.

Big enough

"Adaptation is the key word - you need to be able to see when things change and be ready. But, you always think that the good times will last forever," he says.

Theron adds that the business, with its 25 staff members, is big enough to handle large projects, but also small enough to be able to weather dips in the economy.

The Sanlam / Business Partners Entrepreneur of the Year ® entrant provides electrical, mechanical and electronic engineering services and had about 40 staff members onboard when it faced its second recession in the early 1990s.

Now, a little older and a little wiser, Schuld, Theron and partners Peet Olivier and Johan Stapelberg actively manage the business' size and the current capacity suits them perfectly.

"Size depends on your management style. Because each of the partners is actively involved in each project we tackle, we stay small," Schuld says. "Engineering is our passion and we want to stay involved."

From a practical viewpoint, staying small means manageable overheads that can be covered when business dips.

Theron adds that a recession should be seen as an opportunity: "In a stable environment you might struggle because nothing changes."

At the same time, the partners believe that one can work in harmony with one's competitors.

"You can't see everyone else in the industry as competitors. We realised that the engineering industry is too small to be in constant competition. Rather, we decided to work together."

Schuld adds that this means making use of subcontractors, manufacturers or smaller engineering firms as the need arises, creating a more sustainable business with manageable overheads and, more importantly, a more sustainable industry.

Back in the day

The four partners came together in 1981 and Schuld says while they could have stayed in their previous jobs, the excitement of running a business beckoned.

"We were looking to start our own business and in '81 an opportunity presented itself. We developed an air conditioning unit that was about 15 years ahead of its time. That meant that the industry was not quite ready for it," he adds with a shrug.

Nevertheless, the partners teamed up with a manufacturer and expanded their service offering through their individual skills sets.

"Instead of focussing on a single niche market, we were able to create three divisions because of our backgrounds in electrical, mechanical and electronic engineering."

This meant that the firm in turn could focus on electrical infrastructure in town planning, commercial building projects, as well as high voltage power distribution.

"These fields allowed us to become sustainable because when the one dips, the other one peaks," Schuld says. In addition, the different fields have different lead times, staggering cash flow.

He adds that another key to sustainability is the rule that all four partners need to be in agreement before a project is tackled.

"You spend more time with your business partners than your wife so you have to choose them carefully," he says, adding that passion is a key to success.

"You need to wake up in the morning wanting to go to work. If this is not the case then you are in the wrong industry... The beauty of our job is to make a client's dream a reality. We listen to them, make a couple of sums, get a subcontractor and build something."

Diversification

Diversification has always been important to Plantech and the business constantly looks for new opportunities and solutions. As a result, they have come up with quite a few novel concepts over the years.

These solutions are manufactured by subcontractors and Schuld explains that while they could have created a new division to make the components, it would not have been sustainable.

"We could have set up a factory but this would mean duplicating the factory next door. If this happens, we both run at half capacity. It is better to run one factory to its highest capacity.

Theron adds that their goal is to create solutions for clients: "We are consulting engineers and not manufacturers. We focus on our strengths," he says.

Another practical consideration is the fact that subcontractors need to be used on an ongoing basis - if you are in direct competition with these businesses, they will probably not assist you when needed.

The end of an era

Because the partners are so actively involved in the projects the business takes on, they are able to closely train and mentor their junior engineers.

Schuld explains that because there is such a shortage of engineers in the country, they want to make sure that their employees develop to the best possible standards.

This in turn means that there will be skilled people available to take over the business when the partners retire as they want to see Plantech carry on.

In the meantime though, they still keep the shoulder to the innovation wheel and Plantech is becoming increasingly involved in green energy generation and green buildings - a field the business specialised in nearly 30 years ago.

"One of the creative elements of our work is to identify a niche market and find a solution that does not yet exist," Schuld says.

He adds that the partners are trying to imbue this entrepreneurial spirit into their staff members and successors. But, this also means allowing them to fail at times.

"Success is the result of good judgement. Judgement is the result of good experience. Good experience is the direct result of bad judgement," he says.