Healthy disruption of SA’s gym industry

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Tumi Phake
Tumi Phake

Tumi Phake, owner and chief executive officer of the Zenzele Fitness Group, is a man with a mission.

He wants to disrupt the fitness and wellness industry by becoming the first black dominant player in Africa and aims to list his company on the JSE.

Even though his formal studies took him into banking, Phake told Fin24 he had always dreamt of becoming an entrepreneur and running his own business.

He was born in Katlehong township and grew up in Tembisa on the East Rand, and the 33-year-old describes himself as “very adventurous” as a child.

He was active in sports such as basketball, athletics and long-distance running, cross-country, weight lifting and soccer.

Phake said he had a vision for people to achieve their potential and improve their lives through health.

“In my community there was a lack of access to facilities; we wanted to play sports, have access to gym facilities, but there was none.”

Phake started his business on the side while still working at the bank – he did a lot of short courses in business and finance management and then enrolled at the University of South Africa for a BCom finance degree.

After graduating, he worked as a private banker, managing a R100 million lending portfolio.

He said that, as a former private banker, he had an advantage as he was used to dealing with extremely wealthy individuals.

He was fortunate enough to get his first client before he quit his job.

Phake seems confident, a go-getter: his resilience seemingly lies in his upbringing and support structure.

He was raised by his grandmother after his mother got married and left him in a household of twenty other children. He went to Bryanston High School in Sandton.

Phake is passionate about his mission.

He already owns 10 gyms across Johannesburg, Pretoria and Limpopo, and he told Fin24 he plans to spread his wings to Cape Town towards the end of 2017.

The business began in 2014 and now employs 50 full-time staff.

Where it all started

He started working early in life to support his independence after his grandmother died when he was only 19 years old.

He worked three jobs at a time – he worked in a book store and a music store, and he waitered at a coffee shop.

Phake said it was when working at the book store that he became interested in studying finance.

While working for the bank, he started researching the industry, meeting potential investors and drawing up a business plan.

“The first 12 months were all about calling people, banks and other funders, and equipping myself with the right skills for the business.

“Eventually, funding came from Awethu Project, an entrepreneur incubator.”

Phake worked from home, refining his idea, designing the logo, pitching to investors and trying to structure the business.

The make-or-break first year

The first year was extremely hard as Phake had no experience and people were reluctant to invest in his business.

“Basically, the first 12 months were about building a footprint. I got my first client and that allowed me to build my first gym.

“Awethu Project funded the first gym when it granted me the initial R5 million funding. The first facility cost around R2 million.

“My experience in the finance industry helped me. I understood what investors were looking for,” Phake said.

He owns all his gym branches and has no franchise model.

His initial dream was to become a professional basketball player. He wanted to pursue a scholarship to go to the US but, in time, that dream faded.

How much was your start-up capital?

We started off with R12 million, including the R5 million from Awethu Project.

We are currently working on raising another R12 million by the first quarter of 2017.

The investment funding is a mix of equity, grant and debt funding.

The other initial R7 million was funded by a commercial bank.

What are the hard lessons you learnt?

Your staff are the most important people in your business; without them your business will not scale and realise its full potential.

You need to become a generalist as an entrepreneur and get involved in multiple tasks to equip yourself to be a strong leader within your organisation.

What do you count as your successes to date?

First up would be the ability to raise R12 million to start my business.

Then, being selected as one of the Mail & Guardian Top 200 Young South Africans (2015).

I was also selected to be part of the Mandela Washington Fellowship Young African Leaders Initiative. This is a President Barack Obama leadership programme and I went to the US to study at Virginia Commonwealth University through the Business and Entrepreneurship Institute and meeting Obama was a highlight for me.

But my ultimate success is fulfilling my dream to help people reach their full potential and change their lives through health.

What advice do you have for other aspiring entrepreneurs?

Never settle for a mediocre life.

In business, always surround yourself with people who are smarter than you. – Fin24

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