A hasty expansion to South Africa’s most popular tourist destination brought about some of the early business challenges entrepreneur Sola Owoloja had to face. After a successful launch of a concierge business, West Chauffeurs, in Johannesburg in 2008, opportunities for expansion to various cities in South Africa soon presented themselves to the company.
West Chauffeurs, based in Johannesburg’s swanky suburb of Sandton, was ready for business in Cape Town. In 2009, it secured the highly sought after travel desk contract to provide full concierge services to the African Pride 15 On Orange Hotel and African Pride Crystal Towers Hotel and Spa. It would offer concierge services from booking spur of the moment transportation, dinner reservations, impossible to book theater tickets, finding presents in a hurry and doing deliveries among many other things to guests of the prestigious hotels.
But it was a hasty expansion and move to South Africa’s international tourist city of Cape Town that turned Owoloja’s world upside down, ushering in his worst day.
“The Cape Town operations were not profitable and we didn’t see the possibility of that trend changing for the better,” says Owoloja.
Nigerian-born Owoloja, started his entrepreneurial endeavours in his early twenties in Lagos. It was here that he learned that there is no structure in doing business, even having a 20-hour working day becomes the norm.
He moved to South Africa with the hope of receiving a contract to run an oil services company, but that did not go well. He moved back home, but later returned to South Africa to complete his studies in business administration.
During his studies, Owoloja established the concierge business with little entrepreneurial experience.
It started off with only two luxury vehicles in May 2009, but soon added another five through financial assistance from the National Empowerment Fund. West Chauffeurs was doing well, servicing clients through a global luxury lifestyle company, Quintessentially. They’re known to have very high net worth clients who travel around the world and often stay at the best hotels. And they trusted West Chauffeurs with their clients, Owoloja says.
The empowerment fund and the vehicles West Chauffeurs had purchased bore fruit which helped the business make more than R1 million ($96,000) after only two years in the concierge industry.
They bought new cars for the expansion and even got into lease agreements to finance the rest of the cars to meet the requirements of their contracts in Cape Town.
“We hoped that the expansion to Cape Town would afford us the opportunity to scale the business and as a result be able to increase revenue and profits,” Owoloja says.
But they had entered into unfamiliar territory, an international tourist city that already had well established hotels and services. West Chauffeurs struggled to find its place in the market, and because it relied heavily on the hotel’s guests for business, the company experienced relatively low sales as the hotels were new and in the process of growing their own client base.
“For a small company, expansion should be managed very carefully. We were profitable in our first year, but we did not think that move carefully. We expanded very quickly without the structures to manage the expansion in terms of cash flow, record keeping, etc,” says Owoloja.
The revenue from the Cape Town branch was very low in comparison to the cost of running it. At the end of every month, West Chauffeurs was short by about 65% which they had to source from the profit made during the previous year.
“It dried up very quickly. We tried to get overdrafts to pay salaries, but it was quite difficult. We picked up heavy losses in Cape Town, but those are lessons learned. They were painful,” he adds with a chuckle reminiscent of the tough times.
“It was a very difficult time for me and as a matter of fact, all of us, including employees. I reckon it is so much more difficult to run a business that doesn’t make profits than one that is profitable.”
West Chauffeurs lost millions. Their biggest mistake, Owoloja says, was for the company to go without management accounts and financial statements for nearly a year.
“With the benefit of hindsight, negotiating better terms with our clients could have saved us the considerable losses we incurred in Cape Town,” he says.
But that’s all in the past now. In early 2011, West Chauffeurs packed up office in Cape Town after 16 loss-making months to focus on the business in Johannesburg.
“We decided to focus on our Johannesburg operations which were profitable. It remains profitable and we plan to make it more effective and hopefully be able to make a little more money without additional investments,” he says.
They relocated from Sandton to the affluent suburb of Melrose Arch to run African Pride Melrose Arch Hotel’s travel desk. It is one of Johannesburg’s trendiest hotels. The guests of the hotel are typically discerning travelers who are accustomed to world class services and that became an opportunity for the company to recover from the Cape Town setbacks and also further its growth prospects.
From then onwards, things started to look up.
“We went from nothing to quite a bit. There’s this very nice feeling that comes with making things work,” says Owoloja.
West Chauffeurs currently has 17 employees including drivers and consultants.
Their client base includes companies who use their services for visiting dignitaries. They include Commonwealth Bank of Australia, First Bank of Nigeria, Liberty Life, Musa Capital, Openwave, Union Bank, clients from Barclays and many other private patrons.
Now that Nigeria has bragging rights as Africa’s largest economy, after overtaking South Africa following the West African country’s rebasing of the gross domestic product data after 24 years, West Chauffeurs’ expansion plans can be accelerated.
“Many doors have been opened especially in the hospitality industry as a spin-off from our hard work and dedicated approach to tasks we were entrusted with. In the not too distant future, we will be partnering with an international hotel group on their expansion efforts into Africa, starting with Nigeria,” says Owoloja.
This time, he’ll be armed with the lessons learned from Cape Town.

The City Of Leisure That Brought No Pleasure

Sola Owoloja has been working in the business for five years; he understands how to please. He had to transport a comb from New York to Johannesburg. It must have been a very special comb. He naturally said: “Yes”. You have to.
The patron staying at a Johannesburg hotel had left the comb, given to her by her dying mother, in a hair salon in New York. West Chauffeurs got in touch with the New York hotel and within 48 hours the comb was hand delivered to the patron.
Running around, chauffeuring, catering to and cajoling the rich is what makes concierge services pay. On another occasion, a patron asked to deliver an elephant across the Atlantic to the United States as a gift to his daughter. Luckily, the request was not followed through, again Owoloja would have said: “Yes”.
“Integrity is very important. If you make a promise to your guest, you have to keep that promise. We made a promise to our guests. We will bend, we’re flexible. We’ll do anything to keep them satisfied,” says Owoloja.
In 2008, Owoloja and Kagiso Dumasi saw a gap in the market for a concierge company in South Africa that would cater for the needs of wealthy travelers. Owoloja oversees the operational, financial and recruitment side of the business, while Dumasi looks after the marketing.
West Chauffeurs can make dinner reservations; find scarce theater tickets and presents in a hurry, as well as deliver combs.
Nigerian-born Owoloja learnt early on at home, in Lagos, that you have to do business however you can.
In Lagos, while in his twenties, he dabbled in the supermarket business with a friend. He moved to South Africa with the hope of running an oil services company, but failed. He moved back home but later returned to South Africa to start a business with the little entrepreneurial experience under his belt.
“When the chips are down, in the face of adversity and massive challenges, you need to still inspire people to get them to see beyond the challenges of the day,” says Owoloja.
Their Johannesburg business prospered through a link to Quintessentially, a global luxury lifestyle company, known for its high net-worth clients.
With a little help from the National Empowerment Fund, West Chauffeurs increased its fleet from two cars to eight, after making more than R1 million ($108,800) in its second year.
They relocated from the central business district of Sandton to another affluent suburb, Melrose Arch. This opened up the business meetings market. The company had to swear its drivers to secrecy as many deals were struck on the road.
Towards the end of that year, an opportunity came to run the travel desk for two new five-star hotels in Cape Town but it all went downhill from there. The two found that they had expanded too quickly.
They had entered into unfamiliar territory, in an international tourist city that has well-established hotels. West Chauffeurs found itself exposed, a small business that relied too much on the hotels for guests for business. The two new hotels were unable to fill up enough rooms to secure business for West Chauffeurs. The Johannesburg office had to keep Cape Town afloat.
“For a small company, expansion should be managed very carefully. We were profitable in our first year, but we did not think through that move carefully. We expanded very quickly without the structures to manage the expansion in terms of cash flow, record keeping,” says Owoloja.
At the end of each month the business was short of around 65% of their costs, which they had to source from the profit made during the previous year.
“It dried up very quickly. We tried to get overdrafts, personal funds to pay salaries but it was quite difficult. We picked up heavy losses in Cape Town but yes those are lessons learnt. They were painful,” he adds with a chuckle.
Owoloja says a big mistake was for the company to go without a management account and financial statements for nearly a year.
But that’s all in the past now. In early 2011, West Chauffeurs packed up office in Cape Town and focused on business at its headquarters in Johannesburg, where the company was doing well.
They signed a contract to run the travel desk for the five-star African Pride’s Melrose Arch Hotel located in the trendy precinct. Again, they struggled with being too small and having to run a high occupancy hotel with demanding clients. The hotels patrons were skeptical about making use of their services because they were much smaller than established car rental companies.
Through it all, things started to look up. The company now turns over nearly $800,000 annually.
“We went from nothing to quite a bit. There’s this very nice feeling that comes with making things work,” says Owoloja.
West Chauffeurs currently has twelve cars and employs 17 drivers and consultants. They drive clients from First Bank of Nigeria, Liberty Life and Barclays, to mention but a few.
One of their biggest achievements was beating more established companies to drive members traveling with the British Lions during their rugby tour to South Africa in 2009.
The softly spoken Owoloja says they are wary of leaping without looking, the scars of the Cape Town run deep. For now, their plans are to grow other services within the West Chauffeur brand in Johannesburg and capture the leisure market.
Surely, when the time is right, the answer will be: “Yes”.

Tag: West Chauffeurs

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