A Thousand Watts brings a little magic into people’s lives, creating robots that dance in time to music, floating luxury German cars across a lake and generally making it possible for grown-ups to have a good time.
Launched in 2000 by Jonathan Lang and two business partners, the company started small, focusing on décor and lighting for corporate events. By 2002, turnover had doubled, 23 staff were on board and the company was expanding at a rate of knots.
A year later, Lang’s brother-in-law Graham King became a shareholder and was put in charge of operations with Lang continuing to focus on creative concepts for clients. A decision to take the business in the direction of lighting, sound and stage equipment supply – all big ticket items that were expensive to maintain – was to be its downfall. Coupled with this change in direction was Lang’s move to Durban.
“The business was left in the hands of the wrong people, mistakes were made, and no-one was pursuing any new clients,”says Lang. “More than half the staff had to be retrenched and all our work dried up.”
In 2005, just days after Lang’s wedding, it was revealed that the company had accumulated losses of half a million rand a year in 2003 and 2004. Debt was mounting and the outlook was bleak. To make matters even worse, one of the partners came in with a lawyer’s letter exonerating her from blame.
She took the sole remaining vehicle in the business, leaving Lang, King and King’s toddler stranded at the premises.“Her family was extremely influential and we did not know any better at the time, so we signed,” says Lang, recalling how he wrote a two-page document on the day called “What Now?”
He and King were left with debt of R2,4million, a big chunk of which was owed to SARS. They also had four days to payday and no cash for 12 employees.There were two options: close down the business and spend the rest of their lives paying off the debt, or find a way to get the company back on its feet. They chose the second one, even though they were told it would never work.
With a R60 000 loan from Lang’s wife Georgie and a further R40 000 from King and his wife Alex (who had taken out a bond to renovate their kitchen) they started over. “I read every single business book I could lay my hands on,” says Lang. “I realised that we had to define what we were good at and stick to it.
What is unique about A Thousand Watts is our ability to conceptualise an event from start to finish and make it happen.”In addition to the money owed to suppliers,they had to find a way to manage cash flow. “We promised our suppliers that they would not go unpaid and then we requested their help,” says Lang.
Clients were hesitant to return, but there was one who knew the whole story. She awarded Lang and King the contract for a major show, demanding only that they personally guarantee its success, and paying them an upfront deposit that gave them a significant cash injection.
They also focused the business, setting processes in place, creating mission and value statements and sharing these with the staff. “We live by what we say and our people know that it’s the way we do things that makes us successful as a company,” says Lang.
The business still lives from hand to mouth, but where Lang and King used to get excited when they landed a R15 000contract, they’ve just secured an event with a budget of R1,7 million. Their client list includes Daimler Chrysler, Mitsubishi, FNB and Nu Metro. And with80% of their debt paid off, they aim to be flying high by financial year-end.
|Problem||Action Taken||Lesson Learnt|
|Focussed on key strengths||Do not alter or add to your service or product offering without thorough research and analysis of delivery capability|
|Greater involvement||Lead from the front-line, set up rigid systems and regularly measure all aspects of the business|
|Stopped driving new sales||Focussed on sales||Sales is the engine-room of a company|