It is critical for any economy to maintain a positive level of growth.
A key factor in this growth are the efforts made by entrepreneurs who are willing to take the plunge and risk investing their time, money and skills in starting small businesses.
SMEs are in fact the building blocks of the economy, with a surprisingly high number of SMEs providing employment in big economies across the globe – for example China sees 84% of employees in SMEs, Germany 62.7%, Japan 69%, and France at 63.9%.
What is the situation elsewhere?
Darlene Menzies, established entrepreneur and CEO of SMEasy and finfind, recently visited Kenya to contribute her knowledge and experience at Dot Finance Africa. While there, Menzies made some keen observations regarding Kenyan vs South African entrepreneurship.
“Everyone you meet in Kenya is an entrepreneur and has some kind of business interest. People working full time in corporates have their own businesses on the side or are involved in investing in small business ventures if they can’t give their time. They don’t see full time employment as a security as the labor laws aren’t as strictly regulated as they are in SA – so you can find yourself out of work anytime.
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“There is a genuine spirit of entrepreneurship there, it’s the norm; if you don’t have a business of your own you’re the exception not the rule. It’s so different to SA where only nine in 100 people start their own businesses. Here having your own business is typically perceived as being second best to being employed…generally people feel that only if they can’t find a job or if they lose their job should they consider starting a business.”
Where are all the South African entrepreneurs?
According to a recent article in The Times, titled ‘Where have all our entrepreneurs gone?’ The Global Entrepreneur Monitor South Africa report, released in May 2016, states that the number of South Africans interested in starting a business has halved since 2010. The decline has been particularly sharp among black people and women.
“The question we must ask is why there is this decline and what can we do to address the issue?” says Menzies.
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She believes “we need a massive mind-set change” while the article states that government policy is a ‘culprit’, access to finance and lack of training and education are also significant contributors to the problem.
While Menzies agrees that the realities of red tape experienced by South Africans can hinder our entrepreneurial growth she maintains that the same is in fact experienced by the Kenyans for example. The only difference is that the Kenyans are not deterred by these hindrances and actively seek solutions.
Access to finance
The access to finance problem has a solution for example here in SA. Services such as finfind, a revolutionary, free one-stop solution for access to finance for small business can greatly assist.
Another tool to help entrepreneurs starting a new business is SMEasy, the easy-to-use, online business management and accounting software that is specifically designed for entrepreneurs entering the small business market.
With this in mind, a significantly positive observation from the report is that ‘South African entrepreneurs are more innovative than their counterparts in the rest of Africa and have a better global orientation with at least a quarter of revenue coming from global sales.’ So there is definitely hope in restoring South Africans commitment to starting small businesses.
“While the figures are down from the previous year, it’s definitely not the end of the road for entrepreneurship in SA” says Menzies.
Take the risk
“South Africa has moved forward in leaps and bounds over the last two decades and in order to maintain this growth we need to focus on giving our talented entrepreneurs the proper policies, access to finance, education and training, ensuring we can continue to grow. Also, encourage your children to start businesses, teach them to risk and be courageous, to persevere through hardship.
“Teach them that failure is a normal part of life and should be embraced not avoided. Foster a mentality of overcoming and breaking through. Help raise future entrepreneurs – the true builders of our economy “concludes Menzies.