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Creating Wealth…With Waste

Waste management can enrich communities – and it’s a great entrepreneurial opportunity.

Mannie Hirsch

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Waste management is a science that can be turned into an entrepreneurial opportunity if managed correctly. In South Africa, currently most waste management is handled by five multi-national companies, but waste management opportunities could be transferred through a community model, enriching communities rather than international companies.

An example of such a model is where waste is collected using small trucks owned by women. For every 80 houses one truck with two men can be used. Corporates have no business within communities, where money spent should be retained within the community.

Economic growth

While Government supports the development of small companies and local ownership, small community enterprises are not being developed. Another community enterprise opportunity is where organic waste can be transformed into energy, directing the flow of wealth into the hands of the people. An example of such community business is the fishery model developed by Gestalt.

Fish are a national asset and should be used for the community, yet fishing rights like waste management are currently granted to international companies. Salmon is imported, while the Gestalt fishery model can produce 200 tons of Salmon per year and Salmon can easily be farmed in South Africa in a controlled environment.

Businesses procuring from a local Salmon producer or waste management company can gain procurement, enterprise development and CSI points on their balanced scorecard, while enriching the local community. When business is given to community entities it creates economic growth and an upward spiral throughout the community.

Community control

When a need exists, an order is generated, there are technical partners and sound management, and the community is involved in the project to fulfil on the orders. The entity buying from such a community project is providing jobs and thus disposable income to the very same people that will buy from the purchaser.

Therefore the money stays in circulation in the community and is not exported to other communities or countries. At the same time community members are afforded ownership opportunities. The same is true for waste management, but it is important to understand the problem and the solution before embarking on a new business model.

South Africa has a bad record for failure with regards to community empowerment projects. The agricultural world abounds with stories of successful farms being given to communities, only to be turned into wastelands within a year or two. Farms are, however given to people with no farming or business experience.

The problem is that these new farmers are not receiving the training required to make a profit out of the farm. It’s not correct to start by saying ‘I have land, what can I produce on it’? The question to be asked is, ‘what can I get orders for’ or ‘what can I export’?

Agriculture is a complex business. When community members are given farm land, every possible step should be taken to contain the risk elements. South Africa has a wonderful climate that should be seen as an asset to be turned into money.

Similarly, if waste management is taken out of the hands of multinationals and rather controlled by community members, it is the South African Government’s responsibility to teach community members how to collect and manage waste effectively. As a result, unemployed community members will benefit from a community waste management business and jobs will be created, while the load on the local municipality will be much lighter.

Opportunities abound

Other entrepreneurial opportunities involve recycling waste in order to minimise the amount of waste management throughout South Africa. On the 4th of May 2012 the Department of Environmental Affairs published the National Waste Management Strategy, identifying eight goals to be achieved by 2016.

Targets are set to have 25% of recyclable waste diverted from landfill and include the creation of employment and business opportunities through waste management. Such opportunities will include recycling strategies and the development of a policy to export redundant electronic equipment. Other opportunities include the remediation of contaminated land, for which a remediation fund will be established.

Waste management can be classified into collection and removal, waste treatment, cleaning, spill management and inspection and analysis, each providing different entrepreneurial opportunities. In the US, 18 000 waste management companies have a combined turnover of $75billion.

Waste management can therefore be lucrative, but as in the US the danger exists that small community businesses will not be sustainable due to the strength of the larger international waste management companies. Operational excellence is required and therefore training and Government protection is of utmost importance.

Waste management is a regulated environment. Small waste management companies should be aware of all corporate governance requirements. Other threats will include a lack of landfill sites or rights to dump waste at a specific site. In South Africa there is little involvement in waste removal as residents of most communities are used to it being taken care of by the municipality.

For smaller companies to break into the market there therefore has to be a specific programme supported by Government or enterprise development programmes. It’s time for South Africans to take control of the business opportunities in waste management as in most other industries and create wealth and business ownership for our own people.

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Mannie Hirsch has consulted internationally on the development of emerging entrepreneurs. He founded The Gestalt Group in order to pave the way for emerging entrepreneurs to enter the mainstream of the South African economy. For more information, contact Mannie at mannie@gestaltconsult.com, on 011 781 7841 or visit www.gestaltconsult.com.

Business Landscape

Doing Business From Your Home, What Are The Insurance Implications?

Whether you run a small business from home or have a secondary home industry to supplement your income, it is critical to consider all the risks that your home business is exposed to in order to ensure that it is sufficiently covered.

Tarina Vlok

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Besides the standard damage risks of fire, water, and theft, that all policies should cover, people who run commercial operations from their home need to consider a number of other risks that may not be covered by their personal lines policy. These typically include:

1. Business contents

While most home policies will cover basic computer equipment and home office furniture, these policies will usually not cover stock, tools of the trade or machinery. People running business operations from home also need to consider risks relating to their computer equipment (especially if they remove portable equipment away from the premises), and the software related to their business.

2. Manufacturing risks

Any business that involves manufacturing or requires the use of flammable or dangerous materials, must be specifically insured under a commercial policy.

3. Employee theft

While “theft” is likely covered by a personal lines policy, it is important for home business owners to be aware that any theft or fraud committed by their employees will likely not be covered by a home policy.

4. Liability risks

Liability risks that are not insured against, such as a visiting client tripping and falling at the private home from where you operate your business, can have a massive negative impact on your financial health.

Related: Insurance For Small Businesses: What Should Be Covered?

5. Professional indemnity risk

Anyone who offers professional services or advice could be held legally accountable and it is therefore important to be covered for this risk under specialist commercial liability policies.

6. Products liability

If you make foodstuffs or manufacture cosmetic treatments from your home, you will likely require a commercial policy which is structured correctly to ensure that you have products liability cover.

7. Load shedding

Many home businesses need to consider the risk of business interruption due to interrupted power supply, as well as the potential power surges which can cause serious damage to any electronic equipment once the electricity supply is turned back on. Typically, these risks are limited under most home insurance policies.

8. Vehicle use

It is also important to read the terms, conditions and exclusions of your personal lines motor policy carefully to determine whether any vehicle you use for your business operations (to make deliveries or visit clients, for example) will be covered under the terms of your policy. It is extremely important to disclose to your insurer whether your vehicle is used for private purposes, or whether it is used for commercial purposes.

At the end of the day, when running any type of commercial operation from your home – regardless of the business’ size or nature – it is best to talk to a broker or your insurer to ensure that your policy (whether it is personal or commercial) covers the risks that you do not have the resources or appetite to  cover yourself.

Home business owners that are looking to upgrade their level of cover should do their research and find a suitable product that can grow with their business. The Old Mutual Insure product provides a comprehensive package that can be tailored to the insured’s specific needs. The insured can decide how much they can afford and add cover as the business grows. While the product is not specific to small home businesses, the advantage is that the policy will remain appropriate as the business grows and the needs of the insured changes.

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Business Landscape

How Black Umbrellas Is Thriving Through The Challenging Business Landscape

Even against the challenging economic climate, it is very encouraging and impressive to see growth by our clients and their businesses growing to being sustainable businesses of the future, explains COO Emmanuel Mdhluli.

Black Umbrellas

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Vital Stats

As an enterprise and supplier development incubation organisation, Black Umbrellas partners with the private sector, government and civil society to address the low levels of entrepreneurship in South Africa.

“The programme focuses on promoting entrepreneurship as a desirable economic path and nurturing 100% black owned businesses in the critical first three years of their existence through the provision of our nationwide incubators,” explains Emmanuel Mdhluli, Chief Operating Officer at Black Umbrellas.

“Our model is aimed at supporting emerging and existing black businesses through a three-year incubation programme, so that they are able to emerge as independent, viable businesses. By providing a structured and highly subsidised programme, using a national footprint of business incubation offices, clients are afforded the expertise, office infrastructure and resources to create the necessary foundations to achieve sustainable businesses.”

Currently, BU has eight incubators in Cape Town, Johannesburg, Pretoria, Mooinooi, Lephalale, Port Elizabeth, Durban and Richards Bay.

Client insights on Black Umbrellas’ tangible impact

Here are four examples of the direct impact BU has made to each of its selected clients including their turnover, net profit/loss, net asset value and number of jobs created:

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Related: How The Black Umbrellas Programme Can Boost Your Local Black Business

Black Umbrellas currently has clients in various sectors, including:

  • Construction
  • Industrial engineering
  • Pharmaceuticals
  • Oil equipment
  • Services and distribution
  • Consulting and advisory
  • Electricity
  • Telecommunications
  • Healthcare.

“Even against the challenging economic climate, it is very encouraging and impressive to see growth by our clients and their businesses growing to being sustainable businesses of the future,” says Emmanuel. 

Black Umbrellas’ Collective Impact

The collective SME turnover grew by 33% year on year from R2bn to R2.66bn. Job creation and preservation also saw solid growth of 15% on a year on year basis from 10 137 to 11 687 total jobs created since inception. For the year under, BU was able to remain operationally efficient with the average cost per job figure deteriorating by only 12% on a year on year basis from R32 286 to R36 262 at the end of the financial year. Despite the drop, this figure is still extremely competitive and is testament to the continued operational prudence employed within BU to ensure that capital and resources are optimised for greater impact.

“Most enterprise development service providers focus a lot more on financing mechanisms, whereas Black Umbrellas focuses on all aspects of enterprise development that are inclusive of business management training.” – Client Testimonial

What’s next for Black Umbrellas?

Over the past 5 years, Black Umbrellas has observed a growing trend by corporates to develop their own ESD programmes internally in order to fulfil their requirements. Being that ESD is not core business for most corporates, these organisations have tended to reach out to Black Umbrellas to seek guidance and advice for their internal programmes.

This culminated in the formation of Nextgen Consulting which was officially registered in November 2017. Nextgen Consulting offers Advisory services focused on B-BBEE and Supplier Development at full market rates to corporates, Qualifying Small Enterprises (QSE) and generic companies.

This is an exciting project that will see our third year and graduate businesses benefit from an opportunity to expand their businesses.

Black Umbrellas Contact Details

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Business Landscape

Why You Need To Use NDAs To Protect Your Business

Don’t think of them as aggressive – instead, think of nondisclosure agreements as a fast-track toward trust.

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I’m a small-business owner, and we’re in a stage of growth. Do I really need employees and potential partners to sign NDAs? – Chris P., New Jersey

There are many big-business practices that don’t necessarily apply to smaller companies. When you’re a start-up, you can cut a lot of red tape without worrying about repercussions. The use of NDAs – that is, nondisclosure agreements, which serve as legal contracts of confidentiality – is not one of those cuttable corners.

Chris, here’s a cautionary tale of my own early ignorance. When I started Pen Name Consulting, I used a basic NDA – just a file I found on the internet. I wasn’t blind to the importance of NDAs, but I was cheap and stubborn, even though my father is a lawyer and advised me against this move. (He eventually became my general counsel.) My NDA was flawed; it didn’t cover enough of the information at my company or place the right restrictions on how people could share it.

I discovered my error after a business meeting, where I mentioned a potential client and what they needed help with. The person I was meeting with (who signed my weak NDA) then went after that client themselves – ultimately stealing work from me. There was nothing I could legally do. It probably cost me $30,000 in potential revenue.

Don’t make my mistake. Creating a strong NDA for your business is simple and not that expensive. Even if you enlist the best lawyer, with a ridiculously high hourly rate, the value you’ll receive to protect your company and your ideas is arguably worth the potential value of the company itself. Or at least the value of one client.

Related: Understanding the Terms of Agreement

Now, I understand that it can be awkward at first to ask people to sign an NDA – it seems like you’re telling them you don’t trust them. But think of it this way: If you don’t value your IP, your thoughts and your inventions enough to protect them, then why the hell are you running a business in the first place?

An NDA doesn’t have to feel like a sign of distrust. Because of the scrappy nature of startups and small businesses, partnerships and strategic hires are the lifeblood of scale and smart growth – but they’re also rife with danger. Every potential partner is also potential competition. Every meeting for growth could be a leg up for the other guy. And every time you share your next big move, you need to know you can trust people.

NDAs are valuable because they force that trust. They make it legally binding. With the NDA in place, you can be vulnerable, open up and speak more candidly with potential partners. Rather than view the NDA as a barrier, it’s best to look at it as an exclusive invite.

This is a good thing – the NDA is the front door to learning more and being on the inside. The same can be said for hiring. The moment you have a signed NDA, you’ve connected with someone and you’ve closed the deal. It’s a sign of respect. And when you have respect, you have strong partnerships and hires. That is the foundation of growth for any business.

Pride and ownership are big parts of owning a company. If that comes across as a little “preachy,” it’s because you need to bear witness to a simple reality: Those who do not invest in protections for their business are likely to watch it fall apart. Or they will be too guarded with information to ever let others in. Either way, an NDA solves those problems.

This article was originally posted here on Entrepreneur.com.

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