Episode 1 |The Finance Team | We talk entrepreneurship and the importance of having a sound financial base.

David Watts [00:00:00]:
David Watts on mix 93.8.

David [00:00:04]:
Welcome to it. It's a Monday night. It's what's involved. And my special guest in studio with me tonight, from the finance team, we've got the MD of the finance team, Grant Robson, as well as Richard Angus, the CEO. Gentlemen, good evening.

David [00:00:18]:
Welcome. Hi, David. Great, thanks for having us. Again, can't believe it's been almost, almost a full two years since you were lost in. In studio. So thanks very much for the, for the invite.

David [00:00:28]:
Yeah, well, that's what I was saying. I mean, I couldn't believe it. I was insistent that it was a year, but no, it's not. It's nearly two years.

Richard Angus [00:00:33]:
Been two years. Dave, thank you so much for having us.

David [00:00:35]:
I am. You can see the gray hairs and everything.

Richard Angus [00:00:37]:
Yeah, I can testify to two years if I can see it.

David Watts [00:00:41]:
Two years of hard life. We can see us for two years.

David [00:00:44]:
But I thought it would only be fitting. I mean, we finished off the last show with you guys. You guys did walk a bit of a journey with us and I think it was, it was great fun and I believe we set a standard and we, we set a standard for what a business should be about, not just in terms of the entrepreneurial side, but in terms of business to business development, motivational stuff. And the show was missed. The testament to that today was when I posted on Facebook, man, everybody wants to listen and everybody wanted to come on the show. So that's nice. And I think it's a testament to what you guys have done as well.

Richard Angus [00:01:17]:
Well, thanks for giving us the opportunity to be here this evening. It's great to be here.

David [00:01:20]:
So when, when we were first talking that two years ago, as I said, finance team, you guys have been running for a while, you were kind of doing your thing. What's happened in two years? How is the finance team? How are you guys doing?

David Watts [00:01:36]:
Yeah, thanks, Dave. We've. We've grown nicely over the last two years. I think last year was a. Was a tough one for all South Africans. I think the economy took a. A bit of a backseat. So, you know, we, we saw it in our clients.

David Watts [00:01:50]:
Things really stagnated a bit last year, but, you know, on the whole, over the last two years, we've done very nicely. We've got a team of close to 30 associates on board now, mainly here in Gauteng, but we've got a small team running down in Durban and a small team in Cape Town, so on the whole we can't complain. But I think last year was quite tough for Everybody.

Richard Angus [00:02:12]:
Yeah, I think we've definitely seen, I've definitely seen a fundamental shift coming out of the ANC elective conference into the start of this new year. People's attitudes have definitely shifted. I think with Cyril Ramaphosa as president, I think we've really seen a shift in mindset. If nothing else, I want to get.

David [00:02:30]:
Onto that at some stage because you guys sort of keep fingers very closely on the pulse there because I've seen lots of hysteria lately running around land acquisitions. It's time for us to leave. So let's touch on that maybe if we can later on. But more importantly, Richard, tell us what, who are the finance team? What do you guys actually do?

Richard Angus [00:02:51]:
Okay, so the finance team, we provide part time and interim financial executives into companies that are looking for the financial experience and skill set to assist them in growing their business. Our primary focus is really on providing people with the experience curve without having to go through the expense of having a full time resource. So five days a week we also provide interim support to companies. The traditional, let's call it, maternity leave. Somebody's sick, somebody's resigned, we need somebody to fill a hole. We also need another set of hands. We're doing an acquisition, a disposal, whatever it may be. We need a good, experienced skill set.

Richard Angus [00:03:32]:
For us, it's all about giving our clients people that have been around the block multiple times. They're experienced, they're knowledgeable, they're able to bring their knowledge to bear very quickly and very efficiently with clients. And we're actually able to add value from day. We really strive with our no long term contract approach. So literally you're a 30 day commitment with us and we really try to add value from day one. And we don't lock you into any long term contracts. It's about value add and it's about making sure that we're actually able to help you grow your business. So that's what we focus on now.

David [00:04:04]:
Grant, what sort of, what size businesses? I mean, just from, from talking to you, I'm guessing sort of mid level, up to the very big, big corporates.

David Watts [00:04:15]:
Yeah. So, you know, if we look at the two different kind of models that we look at, the part time and the interim, typically your part time engagement would be, you know, getting a part time FM or a part time FD into your business. And that could be from anything from one one day a week to five days a week or a combination of full days and half days. And those companies are typically in the region of probably Nothing less than 10, 15 million rand all the way up to privately owned company that's turning over a billion rand. And then on the, on the interim side you've got your larger corporates as Richard mentioned that, that need somebody to come in five days a week for a project, three months, six months, or come and hold the fort for a certain amount of time. And they're looking for very experienced people that have been there, done that, hit the ground running from day one. And those can be anything from three months to two years. And those, those kind of companies can be, you know, multi, multi billion rand turnover companies.

David [00:05:12]:
Now the question I'm going to ask you and I'm going to direct it at you Richard. So I mean what makes you guys qualified to do this? Because this is, you're talking serious stuff. I mean obviously you're going to have to pick your team, etc, etc. So a little bit of your background, where do you come from that qualifies you to do this?

Richard Angus [00:05:29]:
Okay, so both myself and Grant are qualified CAs. We've both got experience. I held of 13 years of banking experience in the First Rand Group. Grant spent time in the Mvelopanda Group. We've both been CFOs of large entities and worked with large entities where you have to have your finger on the pulse and be able to actually make the decisions that our clients are having to face every day. So we've helped and worked with people from, let's call it your entry level people who processing transactions all the way through to boards of directors and the likes. So we know and understand when we sit opposite CEO or CFO or an fd, we know and understand exactly what they're experiencing because we've been in those seats and we understand the issues that they're facing. You know, this isn't a case of oh well, somebody send us an email and that'll be the brief that you'll work from.

Richard Angus [00:06:28]:
In fact we have an approach where we say we'd like to sit down and meet with the business line manager, the CFO, CEO, etc. And if we're unable to do that, we're not actually sure we're able to assist you. Because what I can gain in a 15 minute conversation, you can write, you can write pages for me and I still wouldn't understand the real issues. So it's about that conversation and understanding where the organization is and what their challenges are. And you only get that through the experience curve.

David Watts [00:06:55]:
Okay, great. And just to add, you know, we've, Richard and I've been in this industry now for Close on nine years and we've had hundreds of clients that we've seen come through the doors. So we've had a lot of good experience in terms of what goes wrong in these clients. More importantly, we know our people very well. We're not a recruitment company as such. We're more of a, of a consultancy. So we choose the profile of individual that we want to come on board and represent our brand. We take a proper brief from the client and as CAs, hopefully we can get that right.

David Watts [00:07:27]:
And I think we do most of the time. But probably more importantly for the client is that we don't provide them with five CVs. We come back and we'll say, here's the one individual that we know very well. They're in our team, they've been chosen by us and more importantly, we know they can get the job done. So, you know, interview them. If you don't like them, obviously we'll have a look at it again. That's never really happened, I don't think in the last five years that we've been under the TFT banner. So it takes a lot of the risk away from your typical kind of recruitment environment where, you know, CEOs and CFOs of companies are having to go through hundreds of CVs and then sit down and take more time to go and interview people.

David Watts [00:08:08]:
We come in with, okay, what is your issue? We understand your issue. More importantly, here's the one person that we know can get the job done.

David [00:08:15]:
Because I would imagine fit would be incredibly important.

Richard Angus [00:08:18]:
So I perhaps push the, the limit on this. I always say 40% of what we do is technical. 60% is about getting the fit right. If you don't get the fit right, if people aren't able to trust the people that are on the ground dealing with their financial affairs and their financial management, all the reality is we probably cannot assist you and we cannot help you. Getting the fit right is critical. If that trust factor isn't there, it's not what's on the email or on a piece of paper, it's the conversations, it's the know, stuff that you hear at the water cooler, so to speak, that actually becomes the real fundamental issues in your business. I mean, Grant and I often talk about it, but when you're, you know, you're a small company, you, you can make one or two minor errors in judgments and calls and you probably will survive. But when you're a, you know, 50 million rand company and you make a fundamental, you know, decision and it's Flawed.

Richard Angus [00:09:16]:
You, you can actually say goodbye to your company if you're not careful. One or two key decisions that are not informed by. We talk about financial science behind in your numbers. If you don't have those numbers and you don't have high levels of trust in those numbers, you can make some really bad calls and that could be the end of your company.

David Watts [00:09:36]:
And just to add onto that, you find that most entrepreneurs that have built their businesses from the ground up and that have survived four or five years and got to a certain stage, they haven't got there by chance. They've got there because they're damn good at what they do. They know the industry well, they know their products or their services very well and they're very good at executing it. But they do lack sometimes on that, on that financial science that Rich is talking about. So when you talk about putting financial science behind your gut feel as an entrepreneur, we can provide that by putting somebody into your business that can run the numbers for you. You know, all your income, all your costs, your margins, have that be thought out correctly. Come up with a cash flows. Cash flow? Yeah, cash flows.

David Watts [00:10:17]:
Have you got enough cash actually to get where you want to go? And I think once entrepreneurs have got the, you know, the gut feels good and the numbers and the science backs that up, they're a lot more confident to go down, go down that, that road.

David [00:10:32]:
So yeah, you know, it's, I'm smiling now and I mean it's, it's, it's a pretty. Well, it might well be on television so you could see me smiling. But I was smiling because I've started a business before, I've run businesses before. And then I kind of went into the consulting thing and then I went into. It was sort of like a full time contract where I was, I was being the GM of a group of companies and I just don't play well in the sandpit with other children. So I decided I was going to venture out again on my own with my own business. However, before when I was very much. Don't bore me with the details this time I've got a partner and an investor and let me tell you, it's very, very different.

David [00:11:20]:
And I know when I start I'd like to talk a little bit about that and share something with you guys because I know you're gonna laugh. Because when I'm gonna tell you some of the things, it's stuff that we've spoken about before and I kind of poo pooed it at the time time entrepreneurs don't bore me with the details. We'll do this thing, we don't need any of that. And it struck me how important it is. It is what's involved on this Monday night. And I'm David Watts, my guest in studio from the finance team. We've got MD Grant Robson and the CEO Richard Angus chatting to us about a little bit about the finance team and we're chatting about entrepreneurship in general. So we'll be back in just a bit with that.

David Watts [00:11:56]:
David Watts on mix 93.8.

David [00:12:00]:
It is what's involved on a Monday night. We're going to be back each and every Monday between 6 and 7. My guest in studio with me from the finance team, the MD Grant Robson and Richard Angus CEO. So just before the break we were talking and I said, okay, I'm going to share this with you because I, when we last met I was kind of going off radio and I was, I had been running my own sort of consultancy for a bit but it was very much a one man show. Went in as a, as a GM position on a contractual basis for somebody else. Didn't play well in the sandpit with the other children. I'm very much like, you're not the boss of me, don't tell me what to do. And then decided that I was going to go into what's involved and turn it into essentially a media company, a content creation company.

David [00:12:50]:
Realized that I needed an investor. I couldn't do this by myself. And it sounds like a great idea but it comes with a whole bunch of responsibility and my partner is an entrepreneur as well, but very, very much financially minded. And I was just saying over the weekend, I was saying to my girlfriend, ah yes, When I started off, you know, what are you going to do for this year? I'm going to make a million rand, first year in business. Million rand. I think that's not too sort of, you know. No, no, because when we had to sit down with budgeting and everything, I need a whole lot more to make a profit. And it's the most amazing thing because you guys and I remembered some of the lessons that you taught me about budgeting and forecasting when we, when we spoke before.

David [00:13:38]:
And it is, I must admit, as soon as you, you start scaling the business up, it's those little things that can, that can trip you up. Am I correct in saying this or am I just being an idiot?

David Watts [00:13:49]:
I think you 100% correct. What we find with, with entrepreneurs is they've got great products, they've got great services, but they tend, as they, as they grow, they tend not to get the foundations right. They don't get the basics right. And what I mean by that is they don't, they don't get, you know, people, systems, processes, those kind of things are ignored. And when you start scaling your business and you start getting to a certain size, that's when that starts to come and bite you because you haven't got the capability to grow at the right speed that you need to in order to maintain your profitability. So, you know, that's, we often go into clients and we find we have to overhaul systems and people and processes and becomes a really critical part of what we do and then, yes, the really critical elements. Again, where are you going with your, with your business? Are you doing budgets? Are you doing forecasting? Do you understand the profit, the profit engine of your business? Do you know what your margins are? Do you understand your working capital and how that cycle is working? Are you converting or turnover into cash, your profit, cash. And most small companies don't get there quick enough.

David Watts [00:15:06]:
And what happens then is when they start scaling and they start growing too quickly, they get caught in a cash.

David [00:15:12]:
Flow problem, which is amazing because I mean, I've often said that running your own business is the most exciting, scariest thing you can ever do in your life. I mean it is. Unless you've done it, it does. It is scary. You get that horrible feeling in the pit of your stomach, particularly when it gets to month end, like, am I going to make target this month? Am I going to be able to pay the people that are relying on me? And, and I've noticed I'm used to essentially running a one man, a one man band now. I have staff, I have people that work with me, I have a support structure. Now suddenly there's all of those people to worry about as well. Richard, I see you nodding.

Richard Angus [00:15:51]:
I always used to laugh back in the days of banking, in my banking days we used to, you have the concept of the self employed individual and the salaried individual. And I always used to laugh because I would see these home loan applications coming in from self employed individuals who would be given, I tell you, they would be put through the wringer by the credit guys and the banks looking at their financials and their business and like really getting intensely engaged. But that same person's secretary would merely produce a pay slip and should be getting her home loan. And I used to laugh at this and used to think to myself, who's actually in control of the destiny here? The employee or the entrepreneur that's running the business.

David [00:16:37]:
It hasn't changed, eh?

Richard Angus [00:16:38]:
Yeah.

David [00:16:38]:
Can I tell you, it hasn't changed. You guys have heard me talk about him before. You've met him. A very good friend of mine, we do a lot of work together. Tim Keys, he owns a company called the Sales Institute. He's just been through that very thing where eventually sort of three his hands up in the air and went, what else do you need? Do you want to know what color my underwear is and what shoe size I am? And yet his sister who does he does some finance stuff for him, is a salaried employee home loan. 1, 2, 3. Have a nice day.

Richard Angus [00:17:08]:
Yep.

David [00:17:08]:
So it still carries on and it.

Richard Angus [00:17:11]:
Just shows how people perceive risks around entrepreneurship and business ownership versus ding ding. 25th of the month. That's the SMS with the money arriving in the bank.

David [00:17:24]:
There are days, I will be honest, there are days, I long for this, that simple. Ding ding, you know, and it's, you know, then you get to moan and complain about it's not enough and how am I going to do it? Once you're on the other side of the fence, you're like, I'm just so grateful I made it. And of course, you know, when you're starting off, it's, it's, it's so, so important to get those kind of things right now. You guys, as the finance team, a little person like me, under normal circumstances, I'm way too little a fish for you. However, do you guys still have that same philosophy that you, that you more than happy to dispense advice? I mean, I know on your website you've got some amazing resources.

Richard Angus [00:18:05]:
Yeah. So, you know, the, the reality is we're providing a service to a client base. They have to be able to obviously afford that service.

David [00:18:13]:
Yeah.

Richard Angus [00:18:14]:
So there is a, there is almost, let's call it a cutoff point in terms of size, that makes sense. But the reality is a lot of the information that we have out there, our blogs, the, you know, the stuff we've done, shows on various radio stations, etcetera, Those are all there. We put them out on our website, www.thefinansteam.co.za and people can go and download them, have a look, read the blogs, we've got a few ebooks. So yeah, just the reality is the information is out there. There's some great publications as well. Entrepreneur Mag is always a good place to go looking for some insights. And yeah, there's stuff out there. People have to, though, put in the effort to Read and engage.

David Watts [00:18:59]:
And I think also Dave, we realize that it's an expensive resource in a high level financial executives. They don't come cheap. But I think our model is suited to the entrepreneur because we can be flexible in terms of delivering that service. So you know, we want to get involved with companies and be with them for two, three years. In fact, we've got some of our clients that we've had. I think three or four of them have been there for four years now, four years plus. And we only go in maybe a day, a week or two days a week because of exactly what you're talking about. They can't afford so many four days a week.

David Watts [00:19:32]:
So your delivery is obviously going to be extended in terms of time because you're only there one or two days a week. But you know, we try and make it as affordable from a budget point of view as we, as we possibly can while still delivering a good service.

David [00:19:47]:
I mean I found, like I said, I mean I know that we've, we've done a number of shows on different topics in, in the past. You've been on other radio stations, you've got, as, as Richard said, you've got those resources on your website currently your, your newsletter. I read that every month. I skip over the long words I don't understand but I mean it's very informative. The last one was, was all about the budget and, and what to do and how to do.

David Watts [00:20:12]:
I wrote that one.

David [00:20:12]:
Yes, I know, that's right. Long words.

David Watts [00:20:17]:
It's like Marmite.

David [00:20:20]:
But it is so vitally, vitally important if there are people. And I think maybe what we should do is we'll come back and then we'll talk about this for people who are in my position currently who are just starting up their business. So it's, it's still, it's a fledgling, it's their baby and it may be from somebody as simple as a one man show up to, up to bigger businesses, maybe people get funding, etc, etc. I'd like to just chat a little bit about entrepreneurship and how you guys define it and what we're all about and what things people like me need to look out for because I know that there's a couple of things and there's some pitfalls. You guys have come across it so you know what to do. There it is. What's involved on a Monday night. My guests in studio from the finance team, Grant Robson and Richard Angus David.

David Watts [00:21:12]:
Watts on mix 93.8.

David [00:21:15]:
It is what's involved on this Monday evening. I'm in studio with Grant Robson, Richard Angus of the finance team. So just before the break, we said that we were going to talk about, you know, people that are in my sort of business. Starting off, going to resources, what to do, how to do, why to do. Just a quick one where I mentioned your newsletter to. To get onto your newsletter, just the financeteam Co za.

David Watts [00:21:40]:
Sign up there, sign up there and you'll get. Once a month we sent out a newsletter so you'll be on that mailing.

David [00:21:47]:
List, which is brilliant. Okay, so now off. And isn't this typical of radio or fair? Very often most of the interesting conversations happen and I think that's maybe because we can use more colorful language. But we were talking where I am now and I'm sort of. I come from the background of having a CC initially and then being a sole proprietor. Now suddenly I'm staring down the barrel of a PTY and it scares me. So I'm thinking automatically, okay, it's PTY. I need to get you people at 120,000 rand a month.

David [00:22:20]:
Is this the case?

Richard Angus [00:22:22]:
We don't mind if you want to pass. More than happy there, Dave.

David Watts [00:22:27]:
Yeah, I'm not necessarily, Dave. I think it shouldn't be scary at all. In fact, trading as a sole proprietor opens you up to a hell of a lot more risk, actually. So if you are running through a PTY or the old ccs, they're still out there, but you can't, you can't register new ones. You can register P2 unlimited, but what you're doing there is you're effectively creating a new legal Persona and that legal person has got their own limited liability. So you as an owner of that company, as a shareholder of that company, you will be limited in terms of your liability. So don't be scared of it. In fact, you should actually rather embrace these legal avenues that have been afforded us through the Companies act and use them accordingly.

David Watts [00:23:11]:
I think, I think what, what might scare people is how you actually go about running these, these companies. All the red tape involved around the admin, such as income statements, balance sheets that have to be submitted to sars, VAT returns, pay as your own return. I think that's more scary than the fact that you have to or want to operate through a P2I limited company.

David [00:23:32]:
That scares me. I wish the rest of our government was as efficient as sars. Richard, you had something you wanted to.

Richard Angus [00:23:38]:
Yeah, I was going to say, Dave, I think what we must remember is the Companies act has been redone recently and in terms of the new Companies act, you know, people talk about PTY limited companies and they immediately go massive audits and you know, a whole lot of compliance requirements the new Companies act actually takes into account and it uses a principle called the public interest score. So what it does is it actually recognizes that they are small companies and large companies and the requirements actually scale based on the public interest score. So I. E. How much, how much exposure you have as an entity to general public out there and how much more you you should be compliant and how much more compliance you should have. So for example a small entity, your one man entity, like you're referring to a small partnership, you're not going to have a high public interest score. So you're not for example going to require an audit. You require what's known as an independent review.

Richard Angus [00:24:38]:
Now an independent review is tantamount to what your accounting officer was doing in a close corporation. So they brought those two worlds very close together. On the other side, when you're a big listed entity, your public interest score is significantly higher and you will find yourself with a requirement to have two to auditing firms. If you're a bank or a financial institution, you know, and, and the requirements are out there and you will be required to rotate auditors and all of those requirements are all there but they don't necessarily apply when it's Dave's PTY Limited.

David [00:25:13]:
Okay, so now just, just going back to that for somebody who's, who's sort of in that deciding, can you still get. I remember when I started off I got a shelf cc, a shelf company and then just had to go through the renaming process. So two part question, can you still get CC shelf ccs and what would your advice be to somebody that's in this position where I am, it's like I've got PTY looming over here and a business partner that says that is the only way to go and me going, it's a bit scary.

Richard Angus [00:25:45]:
So ccs as they at the time of the new Companies act, any CCs that existed at that point still remain in existence and are not forced to become PTY limited. You can convert a CC to a PTY limited on an election you don't have to convert. So there's no forced conversion. What's really important to remember is that a CC cannot have non natural persons as a member. The only exemption there is a trust that can be a member of a CC but then the trust cannot have more than 10 beneficiaries being natural persons. So the maximum number of let's call it natural members of a CC is up to 10 and there is the trust element that you could use. But then you're also restricted on the size of the trust. Once you're an entity that's going to have more than 10 people involved in terms of membership, you're forced to be a PTY anyway.

Richard Angus [00:26:48]:
Okay, the reality is, if you were to say to me, should I be a PTY or CC or keep. Should I keep my CC that I have right now or convert it to a PTY limited. The reality is the PTY limited is the way the world has moved. The South African economic system has moved. If you remain a cc, you may not have any downside directly, but there is a perceptual downside perhaps. And I think you have less credibility because you almost seem to be stuck in the past. You know, you've kept your CC status, you haven't moved into a PTY unlimited. Why haven't you done this? You know, why would you not want to do a conversion? People may start asking questions further down the line.

Richard Angus [00:27:33]:
I'm talking five years down the line, etc.

David [00:27:35]:
Well, that. It makes sense now that you explained that to me, that you can have sort of, you know, you don't have to have those massive auditors. But I'm assuming like in my circumstances where it's essentially a company that is investing in my company, then it has.

Richard Angus [00:27:51]:
To be, then you don't have a choice.

David [00:27:53]:
Then it's, then you've got to be.

Richard Angus [00:27:54]:
A PTY and it's got to be a pty. And you asked a question also about things like shelf companies.

David [00:28:00]:
Yes.

David Watts [00:28:00]:
Okay.

Richard Angus [00:28:01]:
So shelf companies have, there's always been a, a number of issues around shelf entities. The reality is with CIPSEA going the way they have in terms of electronic registration of companies, etcetera, it is often quicker to register a brand new entity and get all your paperwork done online than to buy an entity and then do a name change, which is often done manually and takes longer. So people always used to say, oh, I'm buying a shelf because the company's already there, I just need to change the name. Well, you can register a company now in, sometimes in measure it in days, whereas a conversion of a name of an existing company could take you in the weeks. So that kind of rationale has been done away with because of the way sipsea has done their electronic systems. They've just made it so much easier to create the companies. The other problem that you've got when you buy a shelf company, you've got to be really careful about where that company comes from because if you're not dealing with a reputable agent who's selling you the shelf, you could very well be inheriting somebody else's problems. Problems.

Richard Angus [00:29:08]:
Tax issues, legal liability issues. Remember, it is a legal entity, it has legal standing. And if it's been used before without your knowledge, you could very well find yourself with, with a challenge. Be very, very careful about where you buy and who you use to register shelf companies.

David [00:29:27]:
But essentially, I mean, you've demystified quite a lot the, the PTY thing. So, so the advice is move with the pty, particularly looking to the future grant. Anything to add on that?

David Watts [00:29:40]:
Maybe, you know, just going back a step or two. You mentioned before the end of the last break about, you know, some advice on to entrepreneurs and I think around, around their, their financial structure and the kind of people they bring in to look after their finances. It's a bit of a chicken egg and I think it takes quite a, it's a bit of a balancing act because, you know, you don't want to, you want to get value for your money, you want to get bang for your buck, as we like to like to call it. But you don't need to bring in a, you know, FD that's had 40 years experience into an organization that's been going for two years with a couple of thousand transactions. It's really going to be a debit and credits and a really simple trial balance in a roundabout way. What I'm trying to say is you need to be very careful about the amount of spend that you're going to be spending on your financial expertise at the right time in your business. And I think there are definite cutoff or growth spurts that you can identify when you would need to bring in, number one, bookkeepers and clerks and then accountants, financial accountants, financial managers and financial directors. And a lot of entrepreneurs out there don't know the difference and they don't know the difference between somebody who maybe did a BCom in financial management as opposed to somebody who did a BCom accounts or CTA.

David Watts [00:31:01]:
In terms of a technical ability, there is a big difference and they wouldn't know that it does come with a, with a, with a bigger price tag as well. So we could certainly advise people accordingly as to what level of individual they should be bringing into their companies so as to get the right timing and the accuracy of the information. Because at the end of the day, that's what it's all about. An entrepreneur an owner of a company, he wants a trial balance and he wants an income statement and a balance sheet and a cash flow that's on time and it's accurate because that is what's going to be used to make decisions. And at the end of the day, if you can't get that, you can't make the right decisions. Yeah.

David [00:31:39]:
And I think, you know, I don't know if it's just me, if you guys have had this experience as well. Very often when you, when you get into the business and you're starting to grow, it's you sort of at the coal face the whole time and, and you tend to, in weird and wonderful ways, inherit staff or people that are working for you and you become used to this. But then you get to that stage and you're now needing to make those kind of decisions or even decisions based around who to hire next. Have you had experience like that?

David Watts [00:32:11]:
Well, I think the easiest way to answer that question is when we get called into a client and we sit down in front of entrepreneurs. And I'm not talking now sitting down in front of a CFO of a large corporate, I'm talking about a CEO of a company, a family owned business. I think I can pretty much guarantee that if I had a list of 10 pain points that that individual have, at least five of those 10 will come up every single time that we sit down with, with an entrepreneur. And it typically comes down to things like my information that I'm getting. I just don't have no comfort with the information. It doesn't seem to be accurate. It doesn't fit, doesn't fit with my, with my gut feel, the margins that I should be getting. I'm, I'm not getting, I don't understand where my cash has gone.

David Watts [00:32:51]:
My stock levels are too high, my working capital is a mess. And this is the reason why they stopped bringing in more highly qualified and experienced financial individuals. I don't know if that's answered the question.

David [00:33:02]:
Absolutely it did. It's again, it's almost time for us to wrap up. Before we do, though, I said I wanted to ask you the question. I know you guys very much in terms of the financial state of the country and what's happening. You monitor that kind of stuff very carefully. Obviously you have to, considering your backgrounds, the clients that you deal with. So you, you sounded very positive, Richard, earlier on when you said with the sort of change of president, you know, that that seemed like a good thing. So Ramaphosa seems like a good person.

David [00:33:37]:
And then I was also very, very sort of positive. I thought this year was going to be a great year. And then suddenly we hear these, these murmurings and it becomes more than murmurings and there's, I don't know, am I right in saying almost a sense of hysteria about land invasions and land claims, etc. Etc. Is that media, Is that hype? How is the country sort of poised to look at this kind of stuff from a financial perspective? Oh, hang on. If I turn your mic and it.

Richard Angus [00:34:08]:
Works, Dave, I think, you know, the big issue for me is at the end of the day, you know, you've got to actually look at the financial fundamentals that underpin a country and its economy. At the end of the day, as I always say, you can make any political policy you like, but somebody's got to pay for all of this. The taxpayer's got to pay for it. At the end of the day, government can only borrow themselves to a certain point. And we're kind of at that point where you can't borrow any more from the markets. You know, there is an upper ceiling. It's just, it's not never, never ending money tree out there. So the reality is you've got to keep your fundamentals inside the country stable when you start raising questions about assets and asset ownership.

Richard Angus [00:34:56]:
And remember, I mean, everybody's having a big thing about land, but actually the statements actually go a lot further than land in some of the statements that are being made. You know, the reality is that, you know, the, the rational part of me says, everybody take a deep breath. Let's just think this through. In my opinion, it's a nice, let me call it, emotional card that has been pulled out and played. It is getting an emotional response from, from many quarters. It is getting very, you know, almost, let's call it illogical response from some quarters, both for and against. And I kind of sit back and say, well, guys, let's just think this through. If you want to, you know, put land ownership on the, on the line, for example, basically what you're doing is you're saying you're happy for every bank in this country to go and do unsecured lending.

Richard Angus [00:35:59]:
There's a little problem with that. Every single bank in this country has a fiduciary responsibility in terms of the banks act to protect depositors funds. Okay? That's the money you and I put into the bank, okay? That money is used to lend to people to buy homes and farms and all the commercial enterprises. If that's under threat, well, then your money that you put into the bank is under threat. Are we ready to close the banking system in this country? Has anybody thought that one through yet? Is that on the EFF ANC list of things that they would like to see collapse? Because that has fundamental issues in the, you know, in the bigger economy. Are we all going back to the dark ages and the candle.

David Watts [00:36:39]:
Yeah.

Richard Angus [00:36:40]:
You know, and, and when you say that, then everybody go, it's like, oh, but reality, guys. The moment you tell a bank that you can take land without compensation effectively, what you're saying is all banks please stop lending immediately and you know, you freeze the system. They're not thinking us through. So there's. Yeah, there's a lot of rhetoric if you ask me. A lot of. I think, I think there's a lot of intent and people trying to redress issues of the past, but they're not thinking it through.

David [00:37:09]:
It's not being done properly. Grant you, you wanted to add something.

David Watts [00:37:12]:
Yeah, you know, I think Richard's 100 right. And in respect to the fact that there's, there's a, there's an election next year. Right. I mean that in itself just says a hell of a lot. There's a lot of emotional issues that are being put out there for, for votes. I think a lot of it. So next year we're going to, we'll see how far that gets people. I think from, from my personal point of view, if you look at what happened in South Africa in 94 and the lead up to 94 from, from 1989.

David Watts [00:37:44]:
1990 when Mandela came out.

Richard Angus [00:37:46]:
Yeah.

David Watts [00:37:46]:
The reason why we got to a negotiated settlement in the country is because Nelson Mandela was able to sit down with different races, different creeds, different colors. He showed them all the right kind of respect. And as a result of that, we were able to sit around at Cadessa and come up with an agreement. We call that our new constitution. I think what's missing now is that there's very little respect shown to certain individuals and certain parties and certain maybe races in, in South Africa that's polarizing people. It's actually, I think the, the aim is to, is to, is to create a divide between people. And if you don't get that right, it'll be very difficult to. To handle these issues that be to very, very emotional, very sensitive and very topical issues that have to be.

David Watts [00:38:35]:
Have to be sorted out. But you're not going to do it. You're not going to do it when you're showing people disrespect. And we. Where are the Nation builders in 94, in 1991, they were around. I'm betting to see the nation builders around me at the moment. And I think if we can, if we can find them and if we can sit around behind tables and negotiate these critical areas, there's a future for South Africa. If not, we could be in trouble.

David [00:39:00]:
I'd like to believe I'm a bit naive. I'd like to believe that there is this emerging middle class that is a huge percentage of our population at the moment. And I'd like to think that those people are like you and I and we want growth, we want prosperity, and we want the best for our country and we want to be able to bring our children up in a safe environment. I think cooler heads will prevail, I think.

David Watts [00:39:27]:
But if you just look at the, at the results of the last elections, the national elections, the municipal elections, you know, I think it's your first, your fringe elements that are really radical. The majority of South Africans doesn't matter if you're black, white, Indian, colored. We just want to, we want to live together. We want to make our country great.

Richard Angus [00:39:45]:
Yeah.

David Watts [00:39:45]:
I mean, and probably most importantly, we want to make it a country where we don't have this rampant poverty and you look around every day and see people living on the streets and begging at every street corner. Who wants to see that? None of us want that. And the only way we can get out of that is if we do work together and we come up with policies and solutions and solutions that are going to benefit all South Africans, black and white. So hopefully we've got the right leaders out there now that can get this, get this, get this plan on. On the road.

David [00:40:15]:
I believe we do. I always up. Gentlemen, thank you so much for coming in the first edition of what's involved for 2018. It's been absolutely fantastic having you guys here again. If you'd like to get hold of of the finance team, it's the financeteam Co za we also on my website in the next couple of days, we're going to be putting the. The audio of this. I'll make the audio available to you guys as well. So putting out in podcast film.

David [00:40:42]:
We have filmed it as well. So if you'd like to watch it. I just have to speak to Donovan about editing my ugly mug out there, but we'll see what happens. I noticed Grant and I have both been sitting a little shot sideways tonight. Richard, however, like an absolute star.

David Watts [00:40:57]:
It's my best side.

David [00:40:59]:
Gentlemen, thank you so much. Have yourselves a fantastic Monday, and I'm sure we're going to have you back in the studio, and I do look forward to it.

David Watts [00:41:06]:
David Watts on mix 93.8.