In 2015, the South African economy is facing several headwinds. Increases in fuel levies, personal income taxes, growing unemployment as well as electricity shortages and other administered tariff hikes will likely dampen growth.
Despite the challenges, South Africa’s private sector continues to score highly in global competitiveness rankings and remains a foothold for local and international organisations to establish a presence in Africa and take advantage of its growth potential.
During challenging economic times, businesses have to be very focussed and strategic and, for example, often have to scale down to ensure efficiency, profitability and long-term sustainability, without compromising on quality and customer service.
A key strategy is to convert fixed costs to variable costs through outsourcing, for example, accounting, manufacturing, transportation, etc. It could also explore new technologies or invest in new markets.
David Tew (Investec Private Capital) says that these circumstances create potential gaps in the offering of established businesses or initiate a need for new products and services.
“In this scenario, entrepreneurial opportunities exist. Successful entrepreneurs are always on the look-out for opportunities across industries and do their homework thoroughly in terms of potential, demand, risk, price, sustainability etc. The challenge is to identify these timeously, find creative solutions, secure financial backing and turn it into profitable realities.” This is where Investec comes into the equation.
Tew comments that Investec’s entrepreneurial culture and history ensures they are uniquely positioned to understand how entrepreneurs think. Investec’s strategic approach has always been to support established entrepreneurs and form long-term relationships with them spanning numerous opportunities.
“We back people not necessarily ideas,” Tew says. “Our clients don’t approach Investec for just the capital. We believe that any lasting relationship is based, not only on honesty and trust, but also on sharing the risk and reward. This creates a successful partnership.”
Through its vast local and international network of established entrepreneurs, Investec often plays ‘matchmaker’ by introducing individuals and businesses that can take an opportunity or idea to profitable fruition. “Our specialists identify and highlight the risks and challenges and together with the entrepreneurs find a solution.”
“Importantly, we give our clients quick answers to enable them to capitalise on opportunities, before someone else does,” Tew concludes.