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A business built on loyalty

Jan 17 2019 10:24
Glenneis Kriel

Hirsch’s, which started out in a small shop in Durban, has established itself as the biggest privately-owned home appliance store in the country. 

Allan and Margaret Hirsch talked to finweek about their company, which celebrated its 40th anniversary in January.   

What did you do before you started Hirsch’s?

Margaret: I was a shorthand typist and Allan a refrigeration technician. 

We started Hirsch’s in 1979 after I got fired for falling pregnant. 

It was in the days before the  CCMA, so there wasn’t much I could do about my “unfair dismissal”. 

In retrospect, my boss did me one of the biggest favours of my life. 

If not for him, I would have most probably still been working for a boss and making a living instead of working for myself and making a fortune. 

With tough times, one’s first reaction is often to think it is the end of the world, while in fact it usually is the beginning of a new start.  

Why did you start your own business?

Allan: Before we started Hirsh’s, I was in a partnership with someone who sold appliances while I did repairs. 

The partner greatly inflated prices, which led to my belief that there was a good opportunity to open my own repair shop. 

The repairs initially focused on air conditioners, but expanded into other appliances and later also involved sales when an appliance couldn’t be fixed. 

When I started selling appliances, I bought them from one of our competitors and then sold it at the same price until I managed to make connections that allowed me a mark-up on sales.       

Where did you get start-up funding?

Margaret: We used our severance packages, which amounted to R900. 

This money was used to cover the rent, utilities and marketing costs during the first couple of months.

What did the marketing plan entail?

Margaret: In the absence of money to buy advertisements or flyers, we went door-to-door telling people about our services, while satisfied customers did the rest. 

Since then we have experimented with various different platforms ranging from print to radio, television and the internet – if something works, we do more of it and if it doesn’t, we do less.

Connecting with customers and word of mouth have remained cornerstones in our marketing strategy. 

Sales staff, in effect, still go out for at least an hour a day to create brand awareness.  

What exactly was the business plan back then and how has it evolved?

Allan: There was no business plan – we just tried to survive and keep our heads above water. 

As time went on we evolved and learnt about goal setting and all the other things that are seen as important for running a business. 

We kept things simple and focused on offering an excellent customer experience. 

We also realised early on that when you look after your staff, they will look after you and your interests. 

What were your biggest challenges during those first years?

Allan: Cash flow was a huge challenge, since we worked on a 30-day payment system. 

We, in effect, had to carry the cost of stock that did not sell within 30 days. 

Inexperience was another great challenge, with concepts such as staff management and the balancing of books being new to us.  

What was your first big break?

Margaret: Back in the 80s, Hirsch’s was the first to import microwaves into SA. 

When sales did not take off, I went for training on how to use it at Panasonic in Japan and on my return started giving microwave cooking demonstrations. 

We never looked back from there. 

What was one of your best decisions?

Margaret: In 1994, we started empowering some of our staff by helping them start their own businesses. 

We, for example, sold our delivery vehicles to drivers at reduced rates and with very favourable terms, so that they could start their own delivery businesses, then spread the model to also empower our repairs and service technicians. 

It resulted in a massive group of people working for themselves, but under our umbrella.  

Have you made any big mistakes? 

Margaret: Yes, we made some mistakes, usually because of listening to other people instead of our gut. 

When suffering these setbacks, we usually just cut our losses and rebuilt. 

During such times, the knowledge of what we have achieved in the past served as a great motivator. 

Did you ever feel like giving up?

Margaret: We never had the option of giving up, as we had to put food on the table to feed our children. 

There was no time for self-pity, as we roughly worked 24 hours a day, every day of the week. 

People say you need to sleep eight hours a day, but I conditioned myself, over the years, to make do with roughly two to four hours.  

Were there any major surprises or things you did not expect? 

Allan: I am still surprised at the way in which people in whom you have invested a lot of time and effort, can let you down. 

Something else I still find hard to believe is the extent of our success. 

I still think and feel like a mechanic, so my first reaction when people ask me for business advice is to respond with “how would I know?”     

How has the home appliances industry changed over the years, and how do you stay ahead of competitors?

Margaret: The industry has become a lot more competitive, with the majority of companies now also having an online presence. 

We have a good online presence, but still foster our relationship with our customers, which makes a huge difference. 

Over the past 40 years, Hirsch's has built a reputation of excellence in sales and after-sales care. 

What are your biggest challenges at the moment?

Margaret: Security – we now have armed guards at all our stores – and the fostering of a good work ethic among all staff members. 

What are the pros and cons of being a husband-and-wife work team?

Allan: The pro is that you have a common interest, while the con is to learn when to stop working and start living. 

We clashed quite a bit at the beginning, since both of us wanted to do everything and anything to make the business succeed. 

I actually tried to fire Margaret a couple of times, but she wouldn’t go. 

Things became easier after we identified each of our niches and started focusing on our individual roles. 

With this we also had to educate staff not to try their luck with one of us when the other already gave them an answer or instruction.   

What are your respective strengths that you bring to the company?

Margaret: I have brought speed, efficiency and the determination to win, while Allan brought expertise, patience and a very strategic mind. 

How do you deal with conflict?

Margaret: When it comes to customers, we take care of it. 

I am a control freak, so I control the situation. 

Allan and I don’t really disagree that much. 

We have been happily married for 47 years, so we are used to each other and each one of us allows the other the freedom to do whatever they want – within reason.

To what do you ascribe your success?

Allan: Determination, resilience and a passion to succeed. 

I also live by this quote of Zig Ziglar that “you will get all you want in life, if you help enough other people get what they want”.

Have you ever thought of retiring?

Margaret: We once decided to retire in our 50s, but got bored after two days so decided to expand the business into other provinces. 

Today we have over 18 branches and various concept stores across the country as well as 11 000 staff and an additional team of 1 400 people who work for us through their own businesses.  

I started my MBA in 2017, because it was something I have always wanted to do, and to show people that it is possible to study while working fulltime. 

What are your plans for the next five to ten years?

Margaret: Both our son, Richard, and daughter, Luci, are in the business. 

Richard took over the reins of the company in 2014, while Luci is in the marketing department. 

I used to feel guilty as my children had to spend so much time at the shop while growing up, but it helped to prepare them for running the business one day. 

I have five grandsons and hope that two or three of them will also one day go into the family business.  

What is your advice to aspiring entrepreneurs?

Margaret: Do what you can with what you have and never a borrower or lender be.

Allan: There are so many things to consider if you want to be a successful entrepreneur, but first of all you need to believe in yourself and that you can have a successful business. 

I only made grade 9 at school and it was only discovered that I was dyslexic at the age of 25. 

I had many excuses to stay in my comfort zone, but things started changing when I started believing in myself. 

This article originally appeared in the 24 January edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.

business  |  entrepeneur
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