Lebo’s manufacturingrodeo no bed of roses

After dedicating her career to helping people buy and sell businesses, Gauteng entrepreneur Lebo Magagane in 2019 decided to invest in a business that was looking for suitors. 

“My background is in finance. We help sell businesses and help people buy businesses, we provide advisory services; that’s what I have been doing for the past couple of years,” she told Vukuzenzele in a recent interview.

Around September 2019, she was made aware of a potential client in the bed-making industry.

“Based on the brief, I thought it was too small for me to find a buyer but I thought, let me meet the guy and hear his story,” she added.

After the meeting, having asked the seller the “correct questions”, she proposed a bid to acquire the bed-making factory herself. However, stumbling blocks emerged. 

“It was eight months old so it didn’t even have a financial statement, and what he was asking for didn’t make sense. I told him that I would put my own money into it because it didn’t make sense for me to engage anyone else. I did that because I had done a bit of research on the industry and the possibilities,” she recalled.

She proposed to purchase a 51% stake in the business with the understanding that the seller - who was at the time emigrating to the United Kingdom (UK) – would stay on for another 12 months.

The wheels almost came off in March 2020 with the advent of COVID-19 before the transaction could be concluded. It was at this point that the seller reneged on the agreement and relocated to the UK.

“I then said to him; ‘I’ve done so much research, I’ve given you a value proposition, and I’ve started talking to people, if you don’t mind, I am still going to pursue this. I’ll start it from scratch because it’s a very low-bearer type of business.’ He said it was fine,” she said. And with that, Embedded Factory was born.

Buoyant, Magagane searched and found the appropriate bed-making machine in Durban. After finding a workshop in Kempton Park, a specialist arrived from Durban to set up the equipment in September. The specialist went on to become the business’s first employee.

“The next thing was to buy a bed, open it, and look what’s inside. I went around industrial areas asking where I could buy the different material – that’s literally how I found my suppliers,” she said. 

After the start-up began to manufacture the beds, it sold to friends and family to test quality. She then approached student accommodation establishments.

“Three years later, we’re here. We have 10 people employed and we sell on platforms such as the Makro online marketplace and Takealot. We also have a solid client base of student accommodations that we supply,” she concluded. ¥