I thought it would be great to create a segment of the blog that showcases the experiences of African business Leaders and successful entrepreneurs from various industries. As a product of several amazing mentors, I often feel blessed because I believe mentors accelerate your personal growth. Learning from the experiences of people who have achieved some level of success can give you a blueprint for your own success.
In Money Conversations with… we’ll talk money, business and the secrets to financial success with inspirational people. Just knowing that someone else had dreams and made them happen, regardless of how difficult it seems to do business in Africa, should be hope for us all.
Tara Fela Durotoye is the CEO of House of Tara International. A Pan African beauty and cosmetics company that has 22 retail stores across the country and over 3000 beauty representatives. She is a Young Global Leader for the World Economic Forum and Forbes Africa named her one of the 20 Young Power Women in Africa.
The first time I met this phenomenal woman was on a strategy course at INSEAD Business School, Abu Dhabi. She walked up to me during a coffee break and said that she was intrigued that someone so young was at a course like this and began to ask me lots of questions about myself. At first I was confused about how nice she was because at that point I wasn’t used to women being that nice at work related events but before the course ended we became inseparable. (She became a wealth management client, my mentor, one of my best friends, and I became a member of her Board of directors)
I had never met a woman so driven and passionate about her business. In a room full of CEOs and industry Leaders, she was bold and fearless with her questions. She already ran a successful business but was determined to learn from as many people in the room as possible. She was eager to leave the course with a plan that would help her expand her business. (Clearly she succeeded because at the time she had 7 stores)
When it comes to business two things keep me in awe of Tara Fela Durotoye. Her ability to execute (she can call me at 3 am in the morning with an idea and a week later she is half way through implementation) and how she’s been able to drive growth by understanding the numbers behind the business.
Her business savvy is undeniable. According to Bloomberg Africa, she started the business with $100, and in 2011 net sales were $7 million.
Here’s what she had to share about what drives her and how she has achieved financial success.
As the CEO of a Pan African brand like House of Tara, a mother of 3 rambunctious boys and the wife of a very Successful Nation Builder, How do you balance it all?
I don’t think you can ever really have balance. Balance is seasonal. There are seasons when you have balance, but sometimes one area of your life might require more attention than others. There are seasons when my husband or my children need me more than my business.
For instance one of my sons is going to secondary school soon and is writing common entrance. That means I have to plan more one on one time with him, plan for the next term ahead, follow school activities and generally be a part of what’s going on in school. This is was different last term because we had gotten to a stage in the business where I needed to put in more of my time and I was extremely busy with expansion plans and focused on taking House of Tara to the next level.
Generally one aspect of your life suffers, depending on the season. Therefore it’s important for every mum/wife/businesswoman to be paying attention to the seasons. What happens sometimes is that you miss it and as a result, you and your spouse begin to drift or you miss a particular season your children needed you. It’s not every day that my son is going to be writing common entrance but this is the season. So I think balance is really about being conscious of the seasons and working on those things, as they need to be done.
Walk us through your daily routine? What is a typical day like in the life of Tara?
My routine can be a bit erratic and every day is different but I think to a large extent the morning part is the one aspect of my day that’s fairly routine. I am a morning person and waking up early is a part of who I am.
4.00 am: Wake up to pray, meditate and put my goals in perspective.
5.30 am: Wake the boys up
6.15 am: Make sure the boys are ready to leave the house
7.00 am: Drop them off at school
7.45 am: Start to work through my to-do list
9.00 am: Join the Staff for our daily prayer session
9.15 am: Executive meeting with department heads
The rest of my day varies from meetings with distributors, banks or members of my board of directors.
What did you spend your first paycheck on?
It’s hard to say. Unfortunately, for a long time I wasn’t paying myself a salary. I put everything we made in profits back into the business to help grow it.
I realized much later that this was bad. Even though I was quite disciplined with money, I was spending from sales instead of profits. It was a huge mistake not to pay myself a salary from the ‘get go’! That’s the only way an entrepreneur can truly know how much they can afford to spend.
However, as I began to structure the business more, I put my self on a salary. I can’t say I spent it on anything in particular, shopping for myself, buying things for the house etc. but it was a good feeling. All I could think of was yes… my sweat! This is what I work hard for.
What was your biggest money mistake?
I have a problem with saying that I made a mistake because I have a mentality of never seeing anything as a mistake, I don’t see mistakes, I only see experiences. I don’t know if its right or wrong but I just think, that that’s my orientation.
For example, the Centro mall space, our second store in lekki, there were some financial decisions I would have made differently but overall the store did great things for us in terms of our partnership with L’Oreal and set the pace for all our other mall stores around the country.
As a creative entrepreneur with a non-finance background, given what you know now about the role being on top of your finances plays in the success of a business, what advice would you give the young Tara?
I would definitely make her do a finance course for non-finance managers and read several books on the subject. For example, the dummy series on bookkeeping and finance.
You can only truly understand your business when you have a firm grasp of the numbers. I always kept records but I was keeping them solely for the purpose of tithing. I wasn’t keeping them for the business and there’s a difference. I think that as business owners, there are many times we say our business is not doing well but in reality we don’t know if its doing well or not because we don’t know the value of the business.
This is because we have failed to analyze the numbers properly. When you keep proper records and go over them regularly, you start to see areas where the business can grow. It helps you ask the right questions. i.e. which business units contribute the most to our bottom line? Should we be investing more in one unit than we are in another because it shows more promise? Which products should we scrap because they aren’t doing as well as we hoped?
Overall, I think knowing would have helped me invest more, whether, in terms of mind time or capital. Its not just about making money. It’s about knowing what areas of your business can grow and opening your eyes up to opportunities within the business.
House of Tara has grown from, a 23 -year- old Tara doing makeup for her friends in university to 22 branches and over 3000 beauty reps selling the products Nation wide. It is clear that you’ve been able to successfully scale your business over the last 10 years, a feat that eludes many African businesses. What would you say are the most important factors that contributed to helping you scale your business?
Focusing on self -development and training my staff has been instrumental in helping us scale the business. I’ve always been entrepreneurial but it was important to me to invest in training programs. (Lagos Business School’s Owner Manager Program, the Blue Ocean strategy course at INSEAD, LEAP Africa’s Business Leadership program, Stanford SEED program to name a few).
A culmination of all my executive education helped me understand the value of structuring my business, understanding my business model and creating value beyond what was the norm.
I would come back and spend time teaching my staff what I had learned, so that they could start to see things as I saw them and implement the new ideas in the business. Eventually we started sending them on training courses in the states and South Africa.
Handling a business that’s about people goes beyond just making money, as you are learning and understand your business you have to carry your staff along with you and develop them as well as give them people a sense that they were creating an impact. Looking back I can see the difference.
Leveraging on my network also played a significant role in helping me scale the business. We had always grown the business organically but we got to a stage where we needed external financing.
I confided in my mentor on the difficulty I was having in raising additional finance to grow my business so she made a phone call to the MD of Gtbank at the time, Mr. Tayo Aderinokun, to give me the opportunity to pitch my business and the rest was history.
The external financing allowed us to increase the product lines and our branch network, the beauty reps had more products to sell which meant they could generate more income for themselves.
What are your tips for financial success?
You have to have the discipline to put money back into the business to ensure that it grows.
One of the greatest lessons I learnt about financial success was from the Late Tayo Aderinokun, the former MD of Gtbank. He told me the next time we had a meeting he didn’t want to see that all my money was tied in the stock for the business. He advised me to adopt the habit of diversifying, by putting some of the profits from my business into other assets. So I cultivated the habit of investing. I started buying land in areas like Mowe and Ikorodu. I also began investing in cooperative schemes that allowed me to pay installmentally for property.
Most of all I think it’s important to learn how to sacrifice some of your wants today to ensure financial prosperity in the future. When I was starting out many of my peers earned really good salaries at the banks, so they could afford to do certain things. However, I had to put off doing a lot so I could grow my business.
Working in Nigeria can be very challenging, what do you do to stay motivated and inspired?
Staying focused on my vision, being clear about what I’m on this earth to achieve and the impact that has on the world. I like setting goals and achieving them, which also drives and motivates me. Ultimately, knowing that my business is impact driven, and helps to empower others, drives me to keep pushing boundaries regardless of the obstacles.
I think her insight is remarkable but the key take away here is that entrepreneurs must go beyond learning a skill, creating a great product or service. They must study how businesses make money and learn how to generate profit from said skill, in order to be successful.