Businesses that have failed and have subsequently been turned around are a source of never-ending interest and debate. A classic example of what can be achieved is O'Hagan's, the Irish pub and restaurant franchise established nation-wide some years ago.
Its new owner, John Weir-Smith, says the elements for success aren't that difficult to divine. First on his list after he bought the O'Hagan's business out of liquidation in September 1999 was a conscious decision to avoid putting too much pressure on franchisees. They were already fractious, worried and rebellious.
Then he applied a policy of adhering rigorously to ethics. This amounted to ensuring that no kickbacks were permitted, and passing back to innkeepers any savings that were made.
This fitted nicely with running a lean head office - Weir-Smith employs only 12 people nationwide - and in elevating efficiencies. Last on his must-do list was that he demands innkeepers apply O'Hagan's disciplines daily.
The result is that from a loss of R470 000 in the first year of operation under his control, O'Hagan's will deliver a net profit of about R1,3 million this year.
The group began when Basil O'Hagan opened his first Wine Bar and Grill in Dunkeld, Johannesburg. The business went belly-up but O'Hagan promptly took the concept and franchised it - a case of building on an idea, not a success. A fundamental mistake was that innkeepers were asked to pay too much. In addition to a joining fee, the cost of fitting out an O'Hagan's pub could cost between R1,2 million and R1,8 million.
After the company was listed, O'Hagan went on a shopping spree. He bought the Baron group for R13 million, Giuseppe's (the pizza franchise) for R2 million, Mortons (the Cape Town restaurant) for around R8 million, the Charlies coffee shop chain and the Fisherman & Farmer, among others.
Overburdened by debt and a massive head office structure (about 100 employees), the group went into liquidation. Its debts stood at around R110 million. Weir-Smith bought the O'Hagan's business for R9,54 million.
Curiously, among his competitors during the bidding was King-co, the company controlled by East London businessman Tony Cotterell, much in the news for his involvement in the Paradigm debacle. The differences between Cotterell's efforts to turn Paradigm around and Weir-Smith's success at O'Hagan's couldn't be more marked.
Essentially, or so it seems to me, they boil down to examining what's on offer and embracing all those aspects that will lead to enduring profitability.
O'Hagan's now has 33 operating sites and more are planned. The possibility must exist that, one day, it will make a triumphant return to the JSE Securities Exchange.
I have been much intrigued by last week's news that the Financial Services Board's case against Brett Kebble, whom I've known for many years, has been referred to the public prosecutor. The case relates to an allegation of price manipulation when Kebble was trying to defend JCI's control of Randfontein from a hostile bid made by Harmony.
When news broke of the actions he had taken, it was suggested that he might be fined, if found guilty, as much as R1 million. I note that this has escalated - according to my press colleagues it's now either R5 million or five years or both.
The last time Kebble and Harmony knocked heads was the end of last year when they vied with one another to buy Elandsrand and Deelkraal mines from AngloGold. Now that AngloGold's remaining Free State mines are in play, I can't help but wonder whether all this isn't a precursor to another war.
Minister of trade and industry Alec Erwin owes it as much to citizens as to himself to appraise frankly just how successful he's been in the job.
I can think of two reasons he should take a lengthy sabbatical. The first concerns a small company called Monyaka, established in 1997 as a joint venture between local business chambers and UK- based Bass Leisure. It was established to manufacture gambling machines and install them in she beens and taverns.
By the end of 1997, Monyaka laid off nearly half its workforce because of inexplicable delays in the issue of gaming licences and the promulgation of the necessary regulations. Despite intensive lobbying, Bass withdrew from Monyaka in September 1999 because the department had still not produced the regulations and licensing protocols. Strike one. Now Erwin's ministry has lost us a R1 billion investment by Malaysian textile group Ramatex. Namibia will get the plant instead. Strike two.
One more of these and the answer will be inescapable - we cannot afford Alec Erwin.