01 October 2014
Antonio Iozzo on the cover of Entrepreneur Magazine


You might never have heard of it, but IUM is a R350 million business, which places it in the top 1% of South African companies. If you’re in the trucking business or own a motorbike, chances are your insurance is underwritten by them. They need R25 million sitting in the bank at all times to comply with insurance solvency laws. Antonio Iozzo and his brother began their entrepreneurial journey in a small store above a fish and chips shop, and they’re proof that what you need to launch a multi-million rand business is grit, determination, and a will to do what it takes to achieve your dream.

WHEN ANTONIO IOZZO was ten years old his father was diagnosed with multiple sclerosis and stopped working three years later. From the age of 15 Antonio worked as a pizza man at a local restaurant to help support his family. He was always willing to work hard and had entrepreneurial DNA. That grit has certainly paid off.

Antonio’s office today is a far cry from the fish and chip shop- office he and brother Nicola launched in 1999. Mont Blanc Financial Services, a business today owned and run by Nicola, employs 45 people, and IUM employs 75 people. Antonio also heads up their property development company which employs over 35 permanent staff and over 100 workers.

In IUM’s building, a state-of-the-art gym has been installed on the bottom floor, complete with state of the art equipment, yoga and pilates studios and six personal trainers.

Each IUM employee has a compulsory membership, for which R200 is deducted from their salary each month. “I have found that healthy employees are happier and more productive, I didn’t want to leave the option of being healthy completely in my staff’s hands,” says Iozzo. “That’s why we decided to make membership compulsory. We can’t force anyone to go to gym, but we can certainly incentivise them to do so. There were a lot of complaints when we first started building the gym – staff who didn’t gym regularly didn’t want to spend R200 on the membership. What’s interesting is that the biggest complainers now use the gym the most. They’re feeling better for it, and since our focus was getting everyone healthy, we see it as a win.”

Iozzo isn’t forcing anyone to do something he doesn’t do himself. He’s fit and healthy, and believes that staying in shape not only focuses the mind, but instils a discipline that is vital for success in business and in life. Looking at IUM’s success, it’s easy to see the

Antonio Iozzo - IUM's Background

benefits of that discipline has paid off, particularly considering that his first foray into business. It was in a completely different industry (a restaurant, a far cry from short-term insurance), left him with R60 000 in debt, and could have damaged his entrepreneurial spirit. Instead, he picked himself up, went back to the drawing board, and made sure he learnt from his mistakes.

The restaurant that wasn’t

In 1996, Iozzo opened a pizzeria together with his mother and brother. Their father could no longer work, and the brothers wanted a way to support their parents while also scratching their entrepreneurial itch. They found a store whose previous tenants had been foreclosed on, and had left all their equipment behind. The owner was looking for a tenant fast, and was willing to waive the usual three months’ rent in cash or bank guaranteed cheques. All that the three partners needed to do was redecorate and start trading. It looked like a dream come true. Iozzo was 19 and had just graduated from hotel school. He focused on the menu, his mother would do the books and admin, and his brother, who is a people’s person, would run the front store. For six months the trio worked long hours, seven days a week, aiming to make just enough money to pay rent and honour their bills. Iozzo had no business experience, and they had zero start-up capital – just sheer determination to make it work.

“In hindsight, the restaurant was far too big to bootstrap. It was a big premises, with high rent. We’d jumped in, gung-ho and excited, without thinking things through properly, but we were scraping by.” And then the landlord, six months into the contract, called in his bank guaranteed cheques. “We hadn’t been expecting that at all. As far as we were concerned, he’d waived them, and we certainly didn’t have the spare cash to pay him.” Unable to pay, the landlord closed and padlocked their doors. It was a bitter pill to swallow. “We had no income, everything in the restaurant had been sold by our former landlord, and we had to settle R60 000 in supplier bills, not to mention that we no longer had a business.”

As the years have since proven however, Iozzo has a strong resilient streak. In every failure, there’s a lesson to be learnt, and it’s better to fail at 19 when you don’t yet have large responsibilities, and hundreds of employees relying on you.

“That kind of loss really focuses the mind. Sure, we could have laid all the blame at the feet of an unscrupulous and uncaring landlord, but we needed to take responsibility for our own role in the disaster. It was a hard lesson to learn, but I walked away understanding that business is a game of chess. You need to predict what the other players might do in order to make provisions for every eventuality. It takes time and patience to work out all the possible angles, but it’s also the only way to build a large, sustainable business, and to protect your interests. You can’t expect anyone to do that for you.”

The power of responsibility

Iozzo’s own ability to take responsibility for the decisions he’s made in business and in life extends to his employees today. “I think that a lot of entrepreneurs start a business, run it themselves for a while, and then believe that they’re the only person who knows how to do anything properly in their company. The result is that they never learn to delegate effectively, or to give their managers enough trust. As the business owner, I’m ultimately responsible for the fate of the company and my employees, but great businesses are built on managers and teams who take and embrace responsibility themselves as well. What’s the point of me being extremely disciplined if I don’t expect the same of my team, or extend them the courtesy of being able to really grow within the organisation I’ve built?”

Antonio Iozzo in BDA Gym

For Iozzo, building responsible employees starts with knowing the good from the bad. “Every business has top employees, average employees and below average employees,” he admits. “Don’t ignore this. Rather, know who’s who so that the below average employees don’t taint your other employees. Likewise, give your top employees more and more responsibility. It takes trust, and they won’t always get it right, but they will learn, and, if you’ve judged them correctly, they’ll fly.”

Iozzo works on a simple system, based on what he calls A, B and C employees. “‘A’ employees are the foundation of my business. They’re extremely good at what they do, they work hard, and they’re rewarded for it. We’ve invested a lot of time, money and training in them. They know the ins and outs of the business, and

the more responsibility I give them, the more they thrive. All of them started as ‘B’ employees and moved their way up. They treat my money as their money, and my business as their own.

“‘B’ employees are the worker bees. They come in every day, do their jobs and can be relied upon. They arrive when they’re meant to, and they leave when we close. Some will move on to become ‘A’ employees, others are happy to remain as ‘Bs’. That’s okay. Great businesses need both, and you shouldn’t penalise the ‘Bs’.

“‘C’ employees are the bad apples, and when we spot them we get rid of them as quickly as we can. It’s not because they’re necessarily lazy or inept; more often than not it’s because of their attitudes. They don’t take responsibility for their own happiness or success, but instead blame their managers, colleagues and the business for their failures. They’re incessant complainers. I’ve found a ‘C’ employee can turn a ‘B’ into a ‘C’ quicker than you can blink. They tend to be incredibly negative, and they whisper in everyone’s ears about managers, company policies – anything they can complain about. The sad thing is that negativity spreads far quicker than positivity, and you can’t fix them. Don’t waste your energy on ‘Cs’. Get rid of them. You should be spending your time on ‘As’ and ‘Bs’ – they’re the foundation of your success.”

Part of this foundation is the willingness to offer second chances though. “I’m firm about my ‘A’, ‘B’ and ‘C’ policies, but I’ll also give anyone a second chance, as long as they apologise and show me a change in that behaviour. If I do make the decision to offer a second chance, I don’t hold a grudge. Things should be dealt with and then

“As the business owner, I’m ultimately responsible for the fate of the company and my employees, but great businesses are built on managers and teams who take and embrace responsibility themselves as well.”

everyone should move on from a clean slate. This is particularly important as you give your ‘As’ more responsibilities. They won’t always get it right, but it’s important that they try – and to do that, they need to trust that you have their backs.”

Learning your trade from the bottom up

And Iozzo does always have his employees’ backs. He believes a lot of this stems from the fact that he and Nicola started from the bottom when they first entered the short-term insurance industry, and they’ve never forgotten those early lessons, even as they’ve built businesses worth hundreds of millions.

“Entering short-term insurance was a massive shift from my first love, which was food, but our first business attempt had failed, and the next time round we were going to be smarter – plus, we had a few new tricks under our belts: We would start small, with minimal overheads; we would create a business in which we could go out and get customers – we wanted more control than waiting around for customers to come to us. We would make sure that the foundations of our business were right, even if that meant slower growth.”

They had patience, matched by the determination to get it right. It meant getting to know the industry from the inside out though. “Too many wanna-be business owners aren’t willing to really learn an industry from the ground up,” says Iozzo. “Today we sit at the top of our respective businesses overseeing hundreds of employees, but it wasn’t that long ago that Nicola and I were cold-calling, pounding the pavements and handling rejection ourselves. We understand what our business is built on, what our clients need, and what our employees face, and that has made a significant difference to our success.”

This attitude meant that the brothers didn’t simply try and launch a new business immediately following the disastrous failure of the restaurant. They went out and got jobs. They had a debt to pay, a mother and father to support, and they realised they needed to take things a bit slower this time.

“It was Nicola who first entered short-term insurance, pulling me in soon after,” says Iozzo. And while the two brothers were now ‘employees’, their entrepreneurial flair hadn’t been dampened. “Looking back I guess we found the one industry where everything is based on commissions,” admits Iozzo. “Our destiny was firmly in our own hands, and the harder we worked, the more we made.” Iozzo was learning the industry from the bottom up, studying through the Insurance Institute of South Africa, while working full time as a sales agent.

Making sales by thinking out the box

The brothers soon developed a great strategy for securing leads.

They bought the Autotrader each month and called up everyone who was selling a car. It stood to reason that if they were selling a car, they were buying one, and that new car needed insurance. “So we’d offer to do a quote, and then drive anywhere in the greater Joburg and Pretoria region to write the policy. We were always willing to go the extra mile. It’s something that really marks our businesses today as well.”

But they were also always looking for a way to maximise their incomes. “Cold calling is all about lead generation. The more leads you have, the higher your closure rate. As two people, we could only source so many leads. What we needed was some help.”

And then they hit on a gold mine – high school students who were looking for afternoon jobs. “Our first ‘employee’ was a girl who was home schooled, which meant she could work almost full time for us while she studied. We paid per lead, so the more she worked, the more she earned.” She would also be their first employee when they launched their new company. From there, the brothers recruited a few more students. They fetched them from school each day, and set them up with phones. “They multiplied how many cold calls we could make each day, which left us free to close deals. We were basically running a small business within a business.”

“It took longer to get here, but we’re in a very stable place because we took the time to find our niche and become the experts in our field. Patience and determination always pay dividends.”

By 1999, Nicola left employment to start their own business. They named the company Mont Blanc Financial Services, and set up shop above the already-mentioned fish and chip store. Iozzo carried on working full time to support the business and pay their bills while Nicola got things set up. It would be a year before he joined the business full time.

“For anyone entrepreneurially-minded, launching your own business is an obvious step, but you need to understand that we were comfortable earning big commissions and living the high life. We were both doing really well. We were two young guys who for the first time in our lives had money to spend. My mom’s bond was covered, we had bought a townhouse together and I was even driving a BMW M5. Life was great.” And yet they were willing to give up the comfort afforded by a secure, high-paying job in favour of the long-term promise of something much greater.

Patience, patience and more patience

Like all great businesses, it takes time to build a sustainable foundation, but the insurance industry in particular requires patience and determination to be successful. You can’t operate in the industry as an agency without securing a licence from the Financial Services Board (FSB), and that can take up to a year.

“Only when you’ve got your licence can you start securing agencies, but the problem is that you need an existing business to get an agency – and an agency to get business. It’s not easy to get off the ground.”

In a nutshell, a brokerage won’t simply become an agent for the big insurance industry players like Santam and Mutual & Federal. You need to first get your foot in the door and write policies for much smaller insurance companies. Once you have a few agencies, you can build up your book and approach the bigger insurers.

“The tricky part in all of this is that you’re first selling policies for smaller insurers, but you can’t get it wrong and end up writing policies for a bad insurance company that doesn’t pay up. At the end of the day, clients know (and trust) their brokers, not the insurance companies. You’re their contact. If they don’t get paid out, it’s your fault, and your reputation will suffer.”

After a long, painstaking process, the business started to gain traction and build up a portfolio of clients and top-tier agencies. “What we really got right from the beginning was specialisation,” says Iozzo. It was this specialisation that would make all the difference for future growth.

Less is more

It often sounds counter-intuitive that the greater your niche, the larger your chances of success. Many businesses fall into the trap of trying to be everything to everyone, particularly when they’re starting out. You need cash, and you’re willing to do almost anything to get it. The brothers had a different plan. They would specialise in short-term insurance, earn their commissions from big, well known brands, and focus on the motor industry, which was regarded as high-risk, and required special insight.

It was this specialisation that ultimately has made Mont Blanc, and later IUM, go-to names in the trucking, transport and motorbiking industries. “Large insurance companies cover everything across the board, which is why they partner-up with smaller, niche companies that have the expertise to provide their clients and brokers with flexible, expert advice and policy solutions. It took longer to get here, but we’re in a very stable place because we took the time to find our niche and become the experts in our field. Patience and determination always pay dividends.” EM

Nicola, brother of Antonio Iozzo