Palesa Dube's lessons learnt as an entrepreneur

Palesa Dube gave up a senior position in a local bank in 2018 to start her own financial planning business. As it is for many other entrepreneurs it was a rough ride, intensified by the Covid pandemic. With her business partner, she survived the first five years, hit a high when she won the sought-after Financial Planner of the Year Award in 2022, and then late last year started all over again as the sole owner of a new business, Centillion Wealth Advisory. Her comfortable salaried days are a distant memory, but Dube has few regrets.

Did you always imagine you would run your own business?

I struggled to choose which degree to study after school because I wasn't clear on what I wanted to do. Looking back, I've always admired entrepreneurs.

I grew up in Spruitview where I had exposure to lawyers, accountants and other professionals. But the people I really admired were the ones that owned the supermarket and petrol station in my neighbourhood.

I've always had the entrepreneurial bug. But coming from a family where my mum was a mid-wife and my dad was an estate agent, I chose the secure route to a career and studied a B.Com in Investment Management. I worked for a bank and then in its wealth management division.

When I had been in the corporate world for more than 10 years, I wanted to start something of my own and realised financial planning lent itself to establishing my own practice.

How did you move from dreaming about a business to actually starting one?

I saw a need which was something I was passionate about. It helped me take the leap to do things the way I believed they should be done. In banking, I experienced friction between how I was expected to service clients and my training in financial planning.

Some corporate roles can be very narrowly focussed. Mine was focused on investments. I wanted to be able to assist the client more holistically. That was the seed.

When we started our first business, we spoke to established corporates about a financial planning franchise. But we realised it was more important to us to start a business that was independent and autonomous and in which we could have an equity holding.

So we applied for a financial services provider licence and started an independent firm from scratch.

Did you appreciate all that would be required to set up your own business?

Getting to grips with everything you need to do to start a practice is onerous. Even after candid conversations with other planners, we didn't fully appreciate what it would take.

You have to have strong conviction and believe in what you're trying to achieve to get you through the hard times.

I had a lot of support from my husband and family. Without it, I don't think I could have carried on as long as I have.

But I believe the contribution I can make to society, to the financial planning industry and to the financial services sector, is in establishing a reliable, reputable and respected wealth management firm that is owned and managed by a black woman.

Did you get any help starting up and what would you recommend?

Yes, we were included in a listed company’s incubation programme that provided working premises shortly after we started the first business. We also went through the Association of Savings & Investment independent financial adviser development programme.

This programme helped us think about aspects of the business we could have overlooked.

It gave us the framework to think more deeply about our value proposition and how to differentiate the business. It focussed us on our practice management and processes.

More established independent practices shared their successes and failures. We had exposure to software providers and thought about how to service clients and our marketing strategy. It really helped us set the right path to grow our business.

Was a business plan part of that process?

Yes, a business plan is one of the requirements for a financial services provider licence from the Financial Sector Authority.

The first time you draw up a plan, you don't really know what things are going to be like, so your plan is not sufficiently informed.

When I did a plan for my second business I had the benefit of five years of running an independent wealth management firm.

I have a lot more confidence in the Centillion Wealth plan and use it as a regular reference point for new employees, to brief marketing agencies or suppliers.  It’s a living document that we change and expand often to steer the business. Read more: Why and how should I draw up a business plan?

Did you invest your own money in the business?

Yes, directly and indirectly. We had to bootstrap quite a bit and save costs – using Zoom, Teams and online signing, out of necessity, well before Covid forced people to use it.

My family had always been a dual-income one, so I needed to have a very clear plan about the financial prospects of the business.

When we started, I made provision to fund myself for at least two years. But in retrospect, it wasn't enough. Two years go by very quickly and then we were hit by Covid.

Other businesses warned us it would take a good seven years for the business to be profitable. I thought “now we're going show you”, but lo and behold, they were right.  Read more: Should I use my own money to start a business?

Did you have financial concerns and were the risks worth it?

Yes, I have a young child and a family, so keeping finances on track was a focus. You should not assess the financial risk by only looking to see if your business is profitable or if you are earning the salary you earned before.

As you build a business you are building an asset that has great value and that helps you financially.

What surprised you about running a business?

The operational aspects of running a wealth management firm, the compliance requirements and managing personnel were a rude awakening. I have always been in client facing roles, so I did not fully appreciate everything that needs to happen in the back office, from acquiring laptops to the service providers that you are going to use. We quickly learned that we were not sufficiently capacitated.

This time around, I have been deliberate about capacitating the business sufficiently. We have a practice manager to look after the operational aspects, an admin assistant and a paraplanner. This gives me more time with clients, which is where I need to be to grow the business.

What mistakes do business owners make with their personal finances?

Entrepreneurs typically act quickly on a business idea or opportunity without giving sufficient thought to where they are taking the business, the 20-year view, how they will exit and how the business will fund their retirement. We assist them to articulate a long-term vision.

Business owners often over-capitalize on opportunities without clear measures and time frames about where they want to be. We act as an accountability partner.

We also assist entrepreneurs to take money off the table to reduce business concentration and invest in other businesses through unit trusts or share portfolios.