According to Liz Zambonini, the chief executive of The Hope Factory, an established Enterprise Development Initiative of the South African Institute of Chartered Accountants, most businesses do not fail because the owner did not work hard – they fail because the owner did not have the necessary skills and knowledge to succeed.
It’s for this reason that a holistic and inclusive outlook is vital for the country to stimulate the growth of new businesses.
Zambonini says the most common challenges entrepreneurs face include lack of skills, limited access to markets, no seed capital, lack of work experience, and insufficient self-confidence. If any of these areas are not addressed the entrepreneur’s chance of success reduces dramatically.
Liz Zambonini, the CEO of The Hope Factory says most businesses do not fail because the owner did not work hard – they fail because the owner did not have the necessary skills and knowledge to succeed.
Director for the University of Johannesburg’s (UJ) Centre for Small Business Development (CSBD) Dr Thami Mazwai noted with “great concern” that only 1.4% of the South African population can sustain a business past four years.
Mazwai also shares some of Zambonini’s sentiments saying the key to improving the country’s low level of entrepreneurship lies in providing fledgling entrepreneurs with mentorship, grants, loans, skills training, access to market and variety of solutions including preferential procurement and investment.
It’s estimated that home-based enterprises provide R6 billion to the country’s annual Gross Domestic Profit (GDP), which is why supporting fledgling entrepreneurs must be the focus for all stakeholders going forward, says Mazwai.
In addition, entrepreneurship is important for economic growth, productivity, innovation and employment, and can lead the way in overcoming the many economic, social and environmental challenges the country is facing.
Before the country can fully reap the substantial rewards that entrepreneurship can provide, policy makers and other stakeholders must first understand and address the obstacles facing entrepreneurs.
Lack of a supportive and co-operative environment is just one of the barriers faced by would-be entrepreneurs in South Africa. Other impediments include crime, poor infrastructure, costs and regulations, all of which restrict new business development, says Mazwai.
According to the latest report from the Global Entrepreneurship Monitor; Small, Medium and Micro Enterprises (SMMEs) contribute 40% of South Africa’s GDP and employ more than half of the private sector workforce. This makes small businesses an indispensable player in the economic growth of South Africa.
With an estimated 33% of people in the country between the ages of 15 and 34 being unemployed, initiatives like the third annual International Soweto Entrepreneurship and Small Business Development Conference are vital. Their aim is to allow township entrepreneurs the chance to engage with experts from all over the globe about how to enhance their skills and overcome the challenges they face.
This year’s CSBD’s International Conference held recently at UJ’s Soweto Campus looked at among others issues, steps to developing a successful entrepreneurship:
Spotting Opportunities - the entrepreneur must be able to identify a market. Often this need is seen through inefficiency in the market - something that doesn't work quite the way the entrepreneur would like it to. As a result, the entrepreneur works out a potential solution and the opportunity is born.
Assessing Opportunities - many entrepreneurs keep a journal that details the myriad of opportunities they come across each day. While it takes a creative skill set to identify opportunities, it takes an analytical skill set to assess them. Each opportunity should be assessed to determine its likelihood of success and the financial and human resources required to execute upon it.
Selecting Opportunities - entrepreneurs should assess their potential opportunities and come to a firm decision regarding which one to execute. Once selected, the entrepreneurs cannot second-guess themselves. To do so would lessen their focus and drive towards the selected opportunity, both of which are critical in achieving success.
Executing Upon Opportunities - execution or the ability to generate the most value out of an opportunity, requires a unique combination of creativity, passion, persistence, focus, responsibility, intelligence, planning and energy. Having an expertly written business plan will allow the entrepreneur to see the outline of the actions that must been taken to ensure success.
Understanding the four steps to entrepreneurship enables entrepreneurs to better understand the path that they are embarking upon. It’s a path filled with potential pitfalls, but also filled with tremendous excitement, satisfaction and potential to build enormous value.
Mazwai says people in townships think their problems are unique, but that couldn’t be further from the truth. If we are to be successful in establishing, sustaining and growing new enterprises, we must encourage the belief that entrepreneurship is a worthwhile and important endeavour,” he urged.
Research by The Hope Factory shows that by growing the pool of entrepreneurs, not only do the individuals themselves profit but it also supports the country through a reduction in social grants, an increase in employment and lower crime and poverty levels.