Lebo Gunguluza Millionaire Entrepreneur

Lebo Gunguluza, Entreprenuer, Strategist and Motivational Speaker - "The Breakthrough Entrepreneur"

Lebo Gunguluza My Story:

Sunday World’s Shwashwi is one of the most recognized media brands in South Africa, but few know as much about the man behind this popular gossip sensation, not to mention the countless successes in both the media, entertainment and hospitality industries. Lebo Gunguluza is an influential innovator and the ultimate “breakthrough entrepreneur”. He has overcome the odds that were stacked against him from the start and broke the boundaries by starting a multi-million rand empire without funding and by creating a revolutionary organization with a group of successful entrepreneurs to help aspiring township and rural entrepreneurs start and grow successful businesses.

Having set clear goals of financial success for himself at the tender age that: by the age of 25, he must have been a millionaire; by the age of 35, he must have been a multi-millionaire; and by the age of 45, he must be a billionaire, Lebo Gunguluza achieved his first goal, at the age of 27, when he made his first million rand through a series of entertainment events and activities that redefined the possibilities of success.

Early Years: Lebo Gunguluza was born in Port Elizabeth were he matriculated with flying colours. Armed only with R60, he got on a bus to study at the University of Natal in Durban. This is where he worked part-time at a retail store to fund his full time studies. After acquiring his degree in record time, he then decided to move to Johannesburg to get a job to help support his family.

Getting Started: Lebo Gunguluza’s first experience in the world of media and business was with SABC, selling advertising space on black radio stations. This is where he developed a passion for the media industry. Before long he was promoted as Brand Communications Executive and spent most of his time designing programme packages that the advertisers bought into. He then moved through to Metro FM, ending up as Marketing & Sales Manager, and was sent to USA to attend a broadcast and media-training course. On his return, he joined  Herdbuoys as Accounts Manager, where he managed key accounts like SA Breweries, Metro FM and the return of Hush Puppies to South Africa

Gunguluza’s upward-bound career came to a screeching halt in 1997 when he embarked upon a process of self-discovery that resulted in his resignation from Herdbuoys. “I knew I was going to be an entrepreneur”, he says. “I had made the decision to take responsibility for myself and had decided that I was not be surviving from hand to mouth in a new democracy with great opportunities, when I also needed to support my family in Port Elizabeth who were going through a rough patch.”

Entrepreneurial Spirit: Lebo Gunguluza’s entrepreneurial drive secured his first business deal with the owner of a night club called Insomnia, where he put together entertainment attractions and marketed them in exchange for a percentage at the door. The success of this deal made him a well-known promoter in entertainment circles with a reputation for organizing the best parties in Johannesburg. He used this opportunity to partner with YFM, a new youth radio station at that time, conceptualized major events that made him a big player and helped him reach a peak on his financial success through his sold-out youth events at Newtown’s Electric Workshop. The news of Gunguluza's success spread through the entertainment industry like wildfire and sparked an army of young budding entrepreneurs all wanting to start similar businesses. He responded to the imitators by  establishing Gunguluza Entertainment, where he diversified his business interest by starting an independent record label and artist management unit which led him to form strategic partnerships with key promoters.

He invested most of his resources on these new initiatives but the return on investment was never realized. The market was also very fickle and unreliable, and the promoters were not helping either with their dodgy operational ethics. This was not enough to sustain his business. By early 1999 his income had slowly petered out and he was left burdened by debt. He was forced to sell his car and close all his account and had to bear the humiliation of being blacklisted with the credit bureau. Things got so bad that for a while he had to rely on his family to pay his rent. He lost weight simply because he could not afford to buy food.

It was in this, the darkest time of his life, that Gunguluza learnt three priceless lessons in business by which he has lived ever since. These were the importance of working with a good paying market, managing cash flow and the value of planning in business. “This was a light bulb moment in my life,” says Gunguluza. “As strange as it may sound, it had never occurred to me that I should carefully manage my cash flow or even plan my business.”

It was also during this time of poverty that he asked himself a critical question “Why is he so broke, and yet famous figures such as Richard Branson, Donald Trump and the the Onassis of this world were so rich.” He made a decision that day to go read about these guys. He spent endless hours at the CNA, reading biographies of these billionaires, and from time to time being chased away by staff members for not buying the books.

This learning phase inspired him to continue his entrepreneurial journey, with two great lessons on hand, the first one being that “Whatever business you go into, you must love it and know it like the back of your hand” and the second lesson being that “You must be its number one salesperson and that all companies are always looking for the best salesperson to improve their bottom-line”. Instead of allowing depression over his failure to engulf him, Gunguluza decided to start again from scratch and look for a new business opportunity that avoided the pitfalls of his last business. “This time I was looking for sustainability in a business,” he says. “I wanted to target a more stable clientele than before (a good paying market)”.

The birth of GEM Group of Companies: Lebo Gunguluza recognized his business sustainability was in the private sector, and that this market segment is broader and diverse. He secured himself a position in a corporate communication company to learn more about the business of selling media space in publishing and corporate events.  Nine-months later, to showcase a clear change in focus he established Corporate Fusion, a corporate communication and events management company. Within 18 months, this company that was run from a townshouse with a single telephone line was generating over R2 Million. Gunguluza rewarded himself by buying himself amongst other things his first Porsche that he always wanted. Building on the success of Corporate Fusion, Gunguluza formed GIDE, a youth development and career guidance development company in partnership with his brother who also joined the growing group of companies.  A year later the turnover had doubled, and Gunguluza decided to move into proper offices and register Gunguluza Enterprises and media, known today as the GEM Group, which was established to overlook the new divisions and growing group of companies.

The GEM (Gunguluza Enterprises & Media) Group of Companies was born as a multimedia and communication company with seven business channels namely: a television production company; a training and development company; a publishing company which produced amongst other publications a country-wide student newspaper called Campus Times; an events company that launched the Eastern Cape Awards, the South African Education Awards, the Soweto Awards and a number of major conferences.

The rise and fall of GEM Group of Companies: The company started turning over millions and Gunguluza had no experience in managing such high turnovers, and had no knowledge about investment markets. He then decided to acquire a million-rand building that the Gem Group was operating from and the rest of his new found wealth was spent acquiring more cars. He employed more than 40 people who were randomly recruited based on looks, friendship and family ties.  He also travelled extensively overseas and started losing sight of his business operations. While overseas, one of his key projects took a big knock that affected his major account that used to succesfully sustain his busness. He came back early from his overseas trip to rescue the project, but it was too late. He lost that client and two other major clients all in the month of August 2004. This was the worst time of his life, as his company was fast going into debt. Within six month (mid 2005), Gunguluza was in debt of over R2-miliion and had to make some key decisions going forward. He fired most of his staff, sold some of his cars and businesses, but that did not help much. He finally closed the company for a while to settle his debts. Some the staff members took him to the CCMA, and had creditors houding him everyday for the next couple of months. The pressure became so much that he decided to close his cellphone line for a period of three months, and used that time to figure his next move.

New Business Opportunities: As the company collapsed, Gunguluza learnt his next crucial lesson in business. “I realized that if you don’t have the right people in your organisation, you don't have the right support, especially in times of crisis. A big part of one’s success is the fact that he or she is surrounded by competent and qualified individuals who excel in their duties and are able to offer good advice at all times.

”An opportunity then existed to operate Primi Piatti in Rosebank. Gunguluza’s ex- wife went for training to run the restaurant, while he was negotiating payment terms with the creditors from the Gem Group of companies. The restaurant became a sustainable operation which provided a stable income for his household and gave Gunguluza a chance to re-establish new business opportunities. It took three years to settle the outstanding debt from the Gem Group. The restaurant became very popular and helped further profile Gunguluza as a sustainable and celebrated black entrepreneur in South Africa. They further recieved the most coveted Tenant's Award for the Highest Growth in Turnover in their second year of operating the restaurant.

Unfortunately at this time that he was starting to re-build his empire, Gunguluza and his wife went through a divorce, where she continued by herself with the restaurant business. Gunguluza then continued re-building GEM Group of Companies by establishing new companies in the media and hospitality space and forming further partnerships.

He further partnered with Uhuru Communications, the publishers of SAA’s Sawubona magazine, who also publish an arts & recreation magazine called Rootz and a campus publication Student Choice. He solidified his partnership by successfully launching a new publication called Municipal Focus, which covers the business of Local Government with a nationwide distribution to municipalities and government departments. He also took on an active role as a Commercial Director and had to set up the Johannesburg office to extend the publishing footprint in South Africa and Africa. He further secured the ultimate government publication that targets top government officials called Public Sector Manager to strengthen Uhuru’s portfolio of power magazines. He further initiated the publishing of the Metro FM publication called Metro Live, Joy of Jazz and Loocha under the Uhuru stable amongst other initiatives. To strengthen his publishing interest, he partnered with Realm Digital to drive his publishing interest into digital publishing. Mr. Gunguluza further acquired an interest in Ezweni to form the first 100% black owned magazine distribution agency in South Africa. Mr. Gunguluza is due to launch 3 new publications in the next 6 months, which includes Destinations, a publication that will extend our footprint beyond SAWUBONA magazine, as a travel publication. Other upcoming publications are SOE Review, a publication that looks at the progress of SOEs in South Africa and PLATINUM, which will be the first men’s magazine in South Africa to compete directly with FHM and GQ.

Gunguluza also partnered in a R6,2-billion development deal in Gauteng, which is 10 minutes away from the OR Tambo International Airport. The first phase of this development kicks off in November 2011 with a R330 Million Hotel. His hospitality interests are activated and marketed under Izani Media and Hotels, a wholly owned division of the GEM Group. In 2011, he further partnered with the Premier Hotel Group, to invest in new hotel developments in Bloemfontein, Polokwane and Midrand.

His partnership with the Premier Hotel Group has further allowed him to acquire a 10% interest in the SIGMA Car Rental, which has a nationwide footprint. In 2011, he further increased his transport interest by acquiring an interest in PASTRANSCOR, a special transport company, which his interest mainly in Armoured Vehicles and Defence transportation.

His interest in Communications has remained strong, his partnership with Two Tone, a branding and advertising agency based in Sandton and Blue Flame, a specialist design agency has given him the ultimate position of being the biggest 100% black owned advertising group in South Africa, winning accounts such as the South African Airways, MTN and more.

As part of his vision to empower young entrepreneurs, Mr. Gunguluza introduced the 12-12-12 Campaign, which seeks to recruit 12 young Entrepreneurs in 12 Months to run 12 new Enterprises, which will be supported by the GEM Group of companies and his network of business associates. Mr. Gunguluza launched this campaign on 12 December 2012 (12-12-12), after two years of planning.

Mr. Gunguluza launched Izani due to an overwhelming number of requests from young entrepreneurs requesting mentorship from him, he decided to start Izani, which translates to a calling that says “I have heeded your call, Come! (Izani), let us work together”. As a result he embarked on shortlisting young entrepreneurs with the most potential.

The entrepreneurs are already working in his Sandton office, and has to date recruited 7 of the 12, and has 5 more months to go. He has to date dedicated his salary and any other forms of support to fund this campaign and the entrepreneurs, their office infrastructure as well as their resources as they run their enterprises. For more information on these enterprises visit www.izani.co.za

In 2011 he also launched GEM Capital, the Gem Group's venture capital and private equity arm, which is already involved in a number of deals including a R230 Million mining venture in the Northern Cape and R4.2 billion rand retail project in Ballito next to the King Shaka International Airport. He is also finalizing a deal to acquire a R200-million broadcast studio in Johannesburg to venture further in his passion for broadcasting. Gem Capital in partnership with Pastrasncor has secured an exclusive distribution deal with an international Defence Group and will be launching that division in February 2012 as a national operation. To date Gunguluza has learnt a great deal about partnerships, and believes one should not reinvent the wheel, but also learn and build on opportunities that already exist.

Contributions: Gunguluza has been honoured with Africa Heritage Youth Entrepreneur Award for his dedication and contributions to the South African society. He is the co-founder and President of the South African Black Entrepreneurs Forum (SABEF), a section 21 organisation established to promote, inspire and grow entrepreneurship in the black communities as the source of poverty alleviation, job creation and economic growth in South Africa. He is also the co-founder and Chairman of the Local Government Business Network (LGBN), a voluntary organisatoion established to promote the relationship between Local Government and the private sector.

Today Gunguluza heads up the GEM Group of Companies, an integrated media, hospitality and communications group that offers holistic media, hospitality and technology solutions to their clients. He continues to share his entrepreneurial successes and failures through radio and television interviews and special sessions that are meant to empower and motivate entrepreneurs and employees of big corporations . This has further assisted the South African Black Entrepreneurs Forum (SABEF) reach a breakthrough membership, made up of aspiring entrepreneurs, emerging and established entrepreneurs

Mr Gunguluza is considered one of South Africa’s most celebrated media entrepreneurs, a strategist and a motivational speaker – the ultimate breakthrough Entrepreneur

Mr. Lebo Gunguluza joined the professional speaking fraternity in August 2011, by December 2011 he was chosen as one of the Top 3 new motivational speakers of 2011 in South Africa by a leading speaker bureau. Well Done Mr. Lebo Gunguluza!!!
At the age of 27, he became one of South Africa's youngest self-made black millionaires, without any funding or tenders from government, and over the years he built a mulitmillion rand empire where he had to overcome tremendous odds on his entreprenuerial journey. He is one of the key founders of the South African Black Entrepreneurs Forum to address issues facing black entreprenuers in South Africa. Gunguluza adapted the title of "'The Ültimate Breakthrough Entrepreneur" and was awarded with the "Africa Heritage Youth Entrepreneur Award" five years later. He also became a resident millionaire entrepreneur on a youth TV programme called "Take 5", where he guided, motivated and inspired aspiring youth entrepreneurs who are starting or running their own businesses. He was recently honoured by the Millionaires Club with the Leadership Award in May 2010, and also received the Bethesda Business Award for his contribution to the development of Entreprenuership in South Africa.
He is the Founder and Group Chairman of the Gem (Gunguluza Enterprises and Media) Group establlished in 2002, an intergrated media and hospitality group with interests in companies that serve in the media, communications, hospitality and IT spheres.
Mr. Lebo Gunguluza, the President of SABEF, has an extensive experience in communication and media having consulted as National Director of Media Communications for membership-driven organisations such as Nafcoc and the Institute for Local Government Management. Mr. Gunguluza's career started at SABC where he was responsible of promoting the African Language stations, and later Metro FM. He then left for a broadcasting course in the US, and came back to join Herdbouys Advertising. That is where he gained strong understanding of the media and advertising business. His journey as an entreprenuer started in entertainment through his first company Gunguluza Entertainment and later refocused his businesses towards corporate communication and media spaces.

He then later founded the Gem Group which has diversified to various portfolios within the media, leisure and hospitality space which include publishing, television, media technology, restaurants, hotels and resort properties. He is also the Chairman and Principal Consultant of the Local Government Business Network (LGBN). Having an interest in Uhuru Communications, has had him oversee the Commercial Direction of Uhuru Publishing, which publishes Sawubona - SAA's inflight publication, Metro Live - Metro FM's new publication, Municipal Focus and So Joburg amongst other publications. He further acquired an interest in Star Hero Communications, a specialist tabloid newspaper publishing house which publishes Kasi Times, The Red Carpet and the Career Developer, where he is currently the Chairman. He is also Chairman of Izani Speakers, South Africa's leading wholly black owned speaker bureau, which also plays a major role of motivating high risk/school dropout youth in the townships. He is partner at Pastrascor, South Africa's leading passenger transportation company that provides and manages any kind of passenger trasnportation logistics and servicesn, from providing Air Charters, Yachts, Armoured and Luxury Vehicles to both government and private sector. He also Chairman of U-move, South Africa's leading fully black owned and managed Car Rental company, with a breakthrough car rental proposition that does not require a credit car from customers, to cater for the majority of South Africans. He also drives Izani Media and Hotels, which activates and provides specialised solutions to media and hotel owners, as well as Izani Travel, which provides and manages travel solutions, hospitality and holiday packages for corporate, government and high-end consumers. 
 For more information on Gunguluza's activities visit www.sabef.co.zawww.lgbn.co.zawww.gemgroup.co.zawww.empowaspeakers.com

R60 and a whole lot of nerve. That’s what Lebo Gunguluza had on him when he arrived in Durban in 1990, determined to enrol for a BCom at the University of Natal. His father died when he was a child and his mother worked as a nurse. There was not much money to go round and what she had managed to save for his tertiary education went on getting him, his brother and his sister through high school in the turbulent late 80s.
“There were so many boycotts at the time that I missed two years of school, so my mother took her savings and sent me to Woodridge College, just outside Port Elizabeth, which was a multiracial school,” he says. “It was a great move on her part as I managed to get a really good education there, but it meant there was nothing left over for varsity.”

Driven from an early age

Gunguluza says his dream to study business was enabled by his appetite for risk. He had no money and no place to stay, but he also had nothing to lose. “Whatever you do, the higher the risk, the higher the reward. I had been accepted at the university, but I could not pay the fees so I was not allowed to register. But it didn’t matter – all I knew was that I had to get in so that I could do a business degree and become an entrepreneur.”
That level of resolve so early on in life, coupled with his understanding of how important a solid education can be, were to stand him in good stead later on at pivotal moments in his work life. It also highlighted how determined he was to lay a solid foundation for the development of his career.
By chance, and probably thanks to his colourful personality, he met a guy on campus who let him sleep over a few nights while he tried to arrange finance. On the last day of registration his tenacity paid off and he secured a bursary to pay for his studies at the Pietermaritzburg campus. It was to be the beginning of a turbulent but inspiring career. But, by mid-year, his funder decided to pull out of the country, leaving him high and dry. With no resources, he had to find another way to stay on and complete his degree.
“I’ve always been a creative thinker. At school I won a national essay competition on how to launch DSTV. I have applied that skill where possible throughout my life. I knew I had to earn some cash so I went to Edgars and offered to become an agent for the retailer on campus. I would sign up new accounts and they would pay me commission. They agreed, and I did so well that I ended up working in-store. I was making enough money to survive by working during the day and catching up on my studies at night. But it was a struggle to pay fees, so I got a loan to help me get by.”

Learning on the job

That meant that when he graduated in 1994, he had a debt to pay back. But, armed with a degree, some work experience and a formidable ability to sell, he took his pick from several job offers and went to work at the SABC as a sales executive.
“I wanted to be in an environment that was creative. I can’t stress enough how important it is to find out where your talents lie when you are young so that you can make choices that hone your skills.”
It was also at this time that he set his financial goals. “I had grown up so deprived that I was determined to make a lot of money and never experience poverty again. I set three goals: to become a millionaire by age 25, a multimillionaire by 35 and a billionaire by 45.”
Gunguluza did well at the SABC. His drive to succeed was unremitting; he was promoted four times in the space of two years and became marketing manager for Metro FM by age 24. But his impoverished family back in Port Elizabeth was still dependent on him and he was simply not earning enough to take care of everyone, even though they believed he was coining it in Joburg.
That was when he decided to save enough money to go to the US for a few weeks and do a specialised broadcasting course which would boost his earning potential. But his gameplan changed when he got back and was recruited by advertising mavericks, Herdbuoys.

Making a million

“My salary doubled, but the ad industry is a tough business to be in. I was working really hard but still not making much headway. There was no way I was going to make that first million. Then something struck me. I was really good at throwing big parties at home. Why was I getting all these people to eat my food and drink my alcohol for free, when I could be making money from them?”
That was 14 years ago and he was then 26. He took the plunge once again, leaving Herdbuoys and the comfort of a monthly pay cheque behind. Fuelled by the desire to build a business that would earn him enough to take care of his family and achieve his first big goal, he started Gunguluza Entertainment.
He had no money for cash flow in the business, but he put his considerable ability to leverage situations to great use. In addition to being a skilled salesman, Gunguluza is a networker of note. It’s a talent that comes easy to a person who’s passionate about entertainment and media.
“There was a night club called Insomnia in Sandton that was not doing too well. I approached the owners and told them I would bring the crowds if they let me take the door. That way they could make their money by selling drinks.”
It was a great idea that took off immediately. Why? “Because there were no clubs for young and trendy black people in the north at the time. Most of them were in Hillbrow or in the townships. On the first night I made R7 000 and I knew I was on to a good thing.”
But like many young entrepreneurs, Gunguluza treated the money as his own and not the business’s. After a few weeks, however, he realised that he had to start saving the cash he made in a business bank account if he wanted to hire some help. For about four months he did really well, earning more than R5 000 per event. But then a copycat came along – a celebrity who had kept an eye on Gunguluza’s parties and started to throw his own. The clubbers descended in droves, leaving Gunguluza with an empty dance floor.
Changing direction slightly, he started to book artists he had come to know over the years and quickly became a popular talent manager. By this stage he was making about R100 000 per event, and also taking the opportunity to build his brand. “I made sure I was on radio all the time and I positioned myself as a local entertainment expert,” he says.
Then, in 1997, he heard that a new youth radio station was about to be launched and his skill in sales came to the fore once again. “I was far from reaching my R1 million goal, but I knew radio and
I knew parties so I called YFM and convinced them to give me half a million rand’s worth of airtime to organise the launch event on their behalf. Kwaito was big at the time, and I knew all the stars.
I met with sound, stage and lighting guys and used the media space I got from YFM to barter with them so that we ended up with a
R4 million production. I also made sure I partnered with a team who were used to hosting huge events in the white market because they had the experience. 15 000 young people came to that party, and they each paid R100 to attend. I made R1,5 million cash, with all costs covered, and YFM got a fantastic launch party.
“That experience reinforced what I found out early on in business. You don’t always need money to acquire things – it’s often possible to use your resources and barter when you don’t have cash. Without funding, tenders or loans, I had made my first million at the age of 27. It’s a principle I still live by today. I never borrow money from the banks. It can cripple you forever. The other problem is that many young people who secure a loan treat it as a lotto win and live the high life on it. That’s why so many projects are abandoned half way.”

Living the high life

Gunguluza knows what he’s talking about when it comes to squandering. He spent that first million in one year. Instead of using that money as seed capital, he bought a GTI and partied like there was no tomorrow. By the end of 1999, he was flat broke. His car was repossessed and he was blacklisted.
“I hit rock bottom for a few reasons. Aside from the flashy lifestyle, I realised then that you have to choose your market sector carefully. Entertainment is a fickle industry and promoters can be unscrupulous. Often we would not get paid on time. I made up my mind that whatever I went into next, it would be in a space that pays well and has structure.
“At that time I was sharing a townhouse with my cousin, and I was so down and out that I would walk to the CNA and stand in a corner reading business books that I could not afford to buy. Often the staff would come and chase me away so I’d go home, change my clothes and come back. I read about Aristotle Onassis, Richard Branson and Donald Trump and realised that if I wanted to succeed, I would have to change my mindset. These people had huge personalities which impacted their business lives.”
Three key points stood out for him:  Whatever business you go into, you had better know it inside out, down to the last bolt; you must always have a strong sales ability in the business; and cash is king, so whatever money you make, try to retain as much of it as possible and use it to advance the company.

Applying the lessons

Although he did not have much experience in communications, Gunguluza was a media maven. He approached Penta Publications and started to sell media space for them. It was a steep learning curve and Gunguluza took full advantage of it, getting to know the tough world of magazine publishing and corporate events. Satisfied that he had picked up enough, he left nine months later and started working on his communications business, Corporate Fusion, a name that indicated a new direction for him – the rigour of the world of big business. Within 18 months it was generating more than
R2 million. He ran it from his townhouse with a single telephone line.
With his appetite for risk growing stronger, Gunguluza knew it was time for him to go to the next phase if he really wanted to grow the business into something substantial. He contracted with several big clients and, through his knowledge of radio and print media events, he launched several awards shows – lavish evenings that became the talk of the town. He also began to build an extensive public sector network that saw him consulting on communication strategies with several municipalities. By 2003, at 33, his business was turning over R14 million, a result of several big ticket contracts he had secured with blue chip companies. He’d reached his next milestone before the age of 35 and had become a corporate communications specialist by applying his now considerable media and publishing experience.

Living large, falling hard

But then he dropped the ball once more. Blinded by his success, he bought a Porsche and started travelling the world. Although he did not repeat the same mistake he’d made before with cash flow, this time round he left the business in the hands of others. He soon lost touch with what was going on in the company and came home one day to the biggest crisis he had yet confronted. An event for one of the country’s largest financial services companies had turned into a shambles. It was so bad that Sunday Times columnist Gwen Gill went on about it for several weeks in her social pages, ripping the event to shreds. Gunguluza lost the client, as well as R7 million worth of other business in three weeks. Four months later he was in debt to the tune of R4 million. He could no longer pay salaries and had to retrench staff, a period he recalls as the most painful time of his life.
To quote Japanese-American academic Samuel Ichiye Hayakawa, “Notice the difference between what happens when a man says to himself, I have failed three times, and what happens when he says, I am a failure.”
Gunguluza refused to see himself as a failure. He sold the office building he had bought back to its original owners for R1 million, and bought a Primi Piatti franchise in Rosebank. With his background in entertainment, he and his wife were determined to build the restaurant and use the cash they made to pay back all their debtors. As a result of his flair for fun, it soon became one of the most popular Primi sites in the country, and turnover growth was high. It was the place to seen in Rosebank and was frequented by Joburg’s who’s who. But Gunguluza’s relationship with his wife soured and they separated in 2008.
He handed Primi over to his ex-wife and started focusing on the other business interests he had been growing quietly in the background. “I hardly ever slept at that time. When I was not at the restaurant I was developing a new media business and creating new partnerships. I had managed to settle all my debt and build a company that had already turned R2 million by the time I was out of Primi.”

The birth of an empire

Media, hospitality, technology, property and investment – those were the five sectors Gunguluza wanted to be in. “I wanted to use the media business to develop other companies within the GEM (Gunguluza Enterprises & Media) Group of Companies. I was now chasing my R1 billion goal, but I knew that if I started from scratch it would take far too long. My strategy was to acquire an interest in existing companies and triple their turnover by boosting their sales and marketing. Really, it was the same strategy I had applied years back to quadrupling the airtime I got from YFM, just on a bigger scale.”
Next, he partnered with Uhuru Communications, the publishers of SAA’s Sawubona magazine, that same year and several other youth and campus publications. He also leveraged his public sector experience by launching Municipal Focus, also in partnership with Uhuru, which covers the business of local government with a nationwide distribution to municipalities and government departments. He continues to grow his publishing footprint through a series of 12 publications.

The next phase

Indeed, there’s no rest for Gunguluza. He has acquired an interest in several hotels and also launched a car hire company that does not require credit cards and that will soon be providing flight services too.
Is there a logic to all these acquisitions? He says it’s part of his strategy to own every link in a chain – eat, stay, drive, fly.
He is also growing his capital interest through projects he invests in and which make him easy returns. That’s what’s enabled him to grow GEM into a multimillion rand business in just two-and-a-half years. The big news is that he plans to launch the first African television channel early next year – a concept along the lines of MTV Base – which he says is a R400 million deal that will turn GEM into a media powerhouse.
These days, he leaves nothing to chance. Each of the dozen companies in the GEM group has its own MD, with Gunguluza playing an operational role in running the group which now employs about 150 people.
“In the past, my HR was a mess. I would hire people just because I liked them. Today, we have strict hiring policies and procedures and we are particular about the people we employ.”
Gunguluza says that because he was born to sell and market, his focus as chairman is on building the brands of each of the companies in the group so that they can attract more business and seek out new opportunities.
Gunguluza has not forgotten his roots or his family. His mother, sister and brother all have senior positions within the group. His success is testimony to the impact that one person can have on a family and a community. Naturally, he is a far more cautious man now than he was in his 20s and 30s, but that goal of becoming a billionaire by 45 is firmly within his sights.

Support for black business owners

Having seen his own star rise and fall many times, Lebo Gunguluza is determined to help young black entrepreneurs to understand the value of having a business plan and holding onto cash. That’s why he founded the South African Black Entrepreneurs Forum (SABEF) in 2008.
Its membership has grown to 30 000 and he himself has become a sought-after spokesperson for black entrepreneurs, as well as a popular motivational speaker whose journey inspires others.
There were several reasons for founding SABEF, he says. Following his divorce, he was alone and realised that he and others could benefit from some sort of support system. Many people were being retrenched at the time and he was also keen to help them see that it was possible to become self-employed if you did not have a job. There is no need, he stresses, to sit at home and wait for help from government. Beyond that no one realises more than he the value of structures and plans, which is something SABEF seeks to provide for young business owners.
“SABEF is not only a great network for entrepreneurs, it helped me to grow my own relationships with both the public and private sectors.
I have a huge base of people to tap into, which has also enabled me to become a successful consultant to government.”
He is also the co-founder and chairman of the Local Government Business Network (LGBN), a voluntary organisation set up to promote the relationship between local government and the private sector. Find out more about SABEF at www.sabef.co.za

Lebo’s Lessons

1. Cash runs out very quickly and it does not come back. Cash gives you flexibility and mobility so use it carefully.
2. The customer is everything. How you treat your customers has serious implications for the business. Treat your clients badly and they will not only take their business elsewhere, but they’ll also tell as many people as they can what a terrible company you have. Don’t fob off customers. Always get back to them and maintain the personal touch.
3. Respect compliance. If you do not comply with rules and regulations and have the necessary certificates,  you will never be paid.
4. Chase your invoices. Make sure you are invoicing on an ongoing basis or you won’t get the cash.

At the age of 27, Lebo Gunguluza was the youngest black South African to become a millionaire. He achieved this without any funding or BEE endorsements, but rather by identifying and acknowledging his talents and not being afraid to take risks.

Gunguluza is the founder of the South African Black Entrepreneurs Forum which addresses the paroblems aspiring black business people face today. Last year he was honoured by the South African Millionaires Club with its Leadership Award and also received the Bethesda Business Award for his contribution to the development of Entrepreneurship in South Africa.

Gunguluza, who currently owns seven multimillion-Rand companies, gave a motivational talk recently to potential entrepreneurs and was hosted by the Rhodes University Business Society. He told his audience the story of how he became a millionaire.

Gunguluza realised that there was a gap in the market for black entertainment events at a time when Kwaito music was very popular. He had no money or resources, but he had an idea. In exchange for advertising on the radio station he worked for, he was able to generate all the resources needed to host a massive Kwaito event. At the end of the evening, Gunguluza went home with R1.5 million.

He recommends nine steps to success:

1.  Acknowledge your talent

It is not you who tells you what you are good at. It’s the world that tells you what you are good at. You must listen to the world. He gives an example of self proclaimed singers being shattered on Idols after being told that they cannot actually sing.

2. Appreciate and understand the value of risk

Do not be afraid of taking chances, rather embrace it. The higher your risk, the higher your returns are, but before taking on a risk you need to use the power of knowledge to assess the outcomes.

3. Invest in your education

By investing in your education, it allows you to express your ideas, opinions and beliefs. Education will improve the way you think, the way you talk and present yourself.

4. Develop skills

It is important to develop skills by focusing on what you are good at. Choose something in line with your talent. As a student he sold Edgars’ accounts, based on his ability to interact well with people and promote his ideas. This put him through his fourth year of university.

5. Understand the importance of time

Gunguluza set himself goals and one of them was to become a millionaire by the age of 25. This is how he realised that time is of the essence and that time equals money, your time is valuable.

6. Identify gaps in the market

Once you identify these gaps, you can then access the opportunities you understand, It is vital to research the gap in the market for the idea to sell.

7. Sell and promote your idea

“If you really want to succeed you need to sell,” he said, explaining that you need to be able to present value to your customer.

8. Form complementary partnerships

When generating ideas in a field that is not in your expertise make sure that you partner up with someone from whom you are able to learn things.

9. Exchange and bartering

“Sometimes you don’t have money. You just have to use the value around you.”

Gunguluza bid farewell to his audience after concluding that aspiring entrepreneurs should start with an idea, and the resources around them.

“What you can see the most makes you the least money. What you can’t see at all makes you the most money. Vision is what drives the leader the most.” He concludes.


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