Business Lessons from Ronnies Sex Shop
I recently had the privilege of sharing a strategy weekend with my MBA students of the University of Stellenbosch Business School. In addition to the great socialising we all shared and experienced, a number of businesses were visited. The last one was Ronnies Sex Shop, halfway between the two small towns of Barrydale and Ladismith in the Western Cape.
To the uninitiated, Ronnies Sex Shop has nothing to do with sex. I must admit that the first time my wife and I drove past this “new” building in the middle of nowhere, the name did draw a lot of attention. Ronnies is also not spelled Ronnie’s, but Ronnies. He (Ronnie) initially named his pub, because that is what it is, Ronnies Shop. He woke up one morning to find the name outside had been altered by his friends to Ronnies Sex Shop. And from then onwards, as we say, the rest is history.
Ronnie told this story and answered all the questions put to him by all the students and myself. A number of guests also listened quite attentively. The following are the lessons I took from this experience.
First of all, Ronnie places a lot of emphasis on his customers. He states that you need to know who they are and what they want. You need to pay them the courtesy of giving them what they want, which is attention. And you need to respect them! According to Ronnie, he is not the cheapest in the neighbourhood, but they still buy from him. He makes the point that you need to listen to your customers. They will tell what they want and what they do not want. You don’t need to be a brain surgeon – just listen to your customers.
He also trusts his customers. To a fault actually. He told a number of stories where he would give people the opportunity to pay their bill in the next town. The number of people who had opted not to pay their bill is minuscule! Once someone wanted to buy a mirror that he fancied, but he did not have the money. Ronnie suggested that he leave the money at the café in the next town. The customer was so astonished he asked Ronnie whether he trusted him. Ronnie’s response was classic: “Are you going to steal a mirror?!”
The second learning I took away was that you had to be different and unique. Here you have a pub where everything (well, close to everything) goes. The pub ceiling is full of bra’s from visiting women. The walls, both outside and inside, are full of graffiti, some of it not of the kind you would read to your parents or younger children. Opening hours are somewhat arbitrary. I really appreciated his attitude. He did not want to be better than or cheaper than. He placed his trust on being different from his competitors!
My third learning was that you had to focus on that what you are good at. Stick to the knitting! He is adamant that his business is about the pub. He has a small shop where he sells memorabilia, but that’s as far as it goes. Even the “restaurant” – The Road-Kill Restaurant – does not form part of his business and is run on an outsourced basis. Simplicity is the name of the game!
The fourth learning has to do with personality. Ronnie is somewhat eccentric, one of the last hippies. His stories are great to listen to, and he has a keen sense of humour. He says he is a drunk and not an alcoholic. The difference is that an alcoholic goes to meetings, while he goes to pubs. However, you would make a mistake were you to underestimate this so-called drunk. In the same way, you would make an equally big mistake were you to underestimate his business sense. You need to differentiate between the businessman and the personality. His quiet charisma adds a lot to the ambience of the place. You do not need to be this 2 meter giant with an extroverted personality to be successful! According to one of my students, Monique, Ronnie’s pub seems to be an extension of his personality, and I couldn’t agree more. While its good while he is still around, the challenge will be to keep it successful once he is no longer there.
My fifth learning is the notion that you need just as much control that is necessary to prevent chaos. According to Ronnie, people do not what to hear they can’t bring their animals to the pub. If buses drive past and want to use his toilet without buying something, he lets them. He himself is a smoker and his pub is therefore a smokers’ pub. He tells the story where they hosted a lot of bikers. One of them asked Ronnie what he wanted for the carpet in his pub. He mentioned some or other ridiculous figure. The guy subsequently paid the money, took his bike, and burnt a circle in the middle of the carpet! Too many rules and controls place constraints on the customers.
Another of my students (Charlie) made the point (Learning 6) that success is not a “paint by numbers” story. You need to be on the lookout for whatever comes your way, while still being true to who you are. There is no simple step 1, then step 2, etc. Also, nobody has the recipe for success. Ronnie first wanted to start with a farm stall. Apparently that did not work. So he decided to start a pub, with the reasoning that if that did not work out, they could at least be their own best clients and drink up their inventory! Deal with the complexities and try to simplify them.
Learning 6 is closely aligned with Learning 7, namely the power of serendipity. It was apparently only after his friends painted the “sex” after Ronnies and before Shop, that the pub became a hit and a tourist destination. Also, had his farm stall been somewhat successful, he might have stuck with it, and found himself far less successful than currently the case.
Learning 8 is an old one, i.e. cash is king! This is especially true for a small business such as Ronnies. You cannot afford to have too much cash and your margins need to be high enough to ensure that you can make a living. All of this obviously without scaring off your customers! The trick is to charge what the market will bear!
Learning 9 is going to be important. Ronnie has officially retired. As with all family businesses, succession planning is crucial. Ronnie’s son has taken over. Will he be able to continue his father’s success? Does he have the same charisma as his old man? Only time will tell!
Learning 10 is also an old one. You need to enjoy yourself and not take yourself too seriously. Ronnie is clearly having fun and enjoys himself thoroughly! We all could take this lesson to heart!
The biggest lesson of all is probably that no entity is too small or insignificant to learn from. It all depends on your attitude! Thanks Ronnie. Your attitude and approach is a lesson for us all!