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Business Landscape

Why SA Needs an Entrepreneurial Ecosystem

Professor Mthuli Ncube, executive director of Wits Business School talks to us about the state of entrepreneurship in South Africa.

Monique Verduyn

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According to the Global Entrepreneurship Monitor, only 31% of South Africans believe they have the knowledge and skills to start a business. How important is education in driving entrepreneurship?

It’s critical. I believe a three-pronged approach is needed: re-educating current entrepreneurs who have owned their own businesses for two to three years and need to move to the next level by doing things like creating a marketing department, sorting out operations and putting more sophisticated budgeting processes in place; reaching the youth in general, and unemployed black graduates in particular; and fostering entrepreneurship within the universities in departments such as engineering, architecture and law to make students aware of the possibilities open to them – it’s an initiative that has worked really well at institutions like Stanford and Massachusetts Institute of Technology (MIT).

What are the biggest shortcomings in secondary and tertiary education in this country when it comes to preparing people to run their own businesses?

We need to bear in mind that it’s never too early to start educating entrepreneurs. In countries such as Malaysia, it starts at primary school. We have some private schools which incorporate entrepreneurial education into the curriculum at grade 7 level with simple assignments that teach children how to think about business at a really practical level and we need more of these to be put in place.

At tertiary level, the biggest problem is gaining access to support. At MIT, entrepreneurship is encouraged through education and research, business and technology partnerships, and a community spirit that brings together academia, government, business leaders and the entrepreneurial community. This creates an entrepreneurial ecosystem, which is something that is missing in South Africa. We need to create one-stop shops where entrepreneurs can access training, mentors, research, funding and investors. Overseas, these types of ecosystems are often built around universities.

Do organisations that provide funding to develop entrepreneurial businesses really offer enough training, mentorship and support?

There is definitely room for improvement. Again, there is no support network in place. These types of organisations need to focus on creating entrepreneurial ecosystems for their specific target markets – if you need a million to start your business, you’ll go to the IDC, whereas the newly formed National Youth Development Agency (NYDA) provides funding on a much smaller scale.

How do we develop an entrepreneurial ecosystem?

Business is already required to become involved in entrepreneurial development as part of the BEE Codes. The Anglo Zimele programme is a great example of what business can do to promote entrepreneurship. It’s an investment fund which provides loan and equity finance to support start-up or expansion businesses and it looks for investment opportunities at operating divisions.

South African Breweries is another; the company makes beer but it has recognised that it does not need to own the trucks that transport it, nor the taverns that sell it. As a result SAB has enabled the development of a number of small enterprises that take care of this side of the business.

Truck drivers and tavern owners in turn support entire families. This is how ecosystems are created – by empowering suppliers. Mid-size businesses may not have the same opportunities open to them, but they need to look at outsourcing models that empower their suppliers.

How important is financial knowledge for entrepreneurs?

There is a link between financial know-how and business success, but at start-up level passion, motivation, hard work and self-reliance are equally important – it’s a lonely journey. That said, growing a business requires you to constantly refine your business model – and what is a business model if it’s not about finance?

That’s why companies with a four- to ten-year history are generally headed by people who have sound financial know-ledge and have undergone some level of training.

Banks interrogate business owners and you have to show that you are knowledgeable about money. And while newer entrepreneurs are involved in every aspect of the business, more established ones need to remain so too. You can delegate functions to accountants and bookkeepers, but you must always remain part of the financial control mechanism.

What are some of the key fundamentals of a good budgeting process?

Understand who your customers are and stay close to them. Understand your financiers and love your banker. Understand your competitors and know where your business is positioned in relation to them.

In a downturn, what’s most important is to stay afloat.

Create a budget that will enable you to survive the slump by controlling your costs and defending your revenues.

I also believe that businesses need to be careful about cutting to the bone as far as employees are concerned because you will need to be ready for the rebound, which is not that far away. Now, companies are cutting back on things like marketing, advertising and training. It’s appropriate to retrench when you are trimming costs, but remember that it’s often difficult to re-capacitate a business that has been drastically downsized. Is it not better to look at options like the three-day week?

That way, you don’t lose valuable people who you need to bring back into the business. I would advise companies to beware of jumping on the retrenching bandwagon. It can, however, provide a great opportunity to clean out the closet and get rid of underperformers.

How regularly should budgets be re-visited and what are the key indicators to focus on?

In the current circumstances, it’s best to look at the budget quarterly – check and benchmark the business’s actual performance versus the budget. Identify your biggest revenue drivers. Are your biggest cost drivers salaries, travel or entertainment? Where can you cut back?

Check your cash flow. Are you liquid? If not, stay close to your bank. What is your acid test ratio? Do you have enough short-term assets to cover your immediate liabilities without selling inventory?

The acid test ratio is a tough test that basically looks at what you can pay tomorrow, given what you have today. This is a critical consideration.

What are some of the best ways to align budgeting, sales and operations?

You have to take an integrated approach that unites vision with strategy. Once the budget is in place, look at what operations you need to achieve that budget, and then look at your marketing. It’s never easy;

vision can often run ahead of operations, or operations can become an impediment to appropriate market response.

What lies ahead for our economy?

South Africa has done very well in not being directly impacted by the global recession, but we have been affected nonetheless. I do believe, however, that we are seeing the bottom of the recession and all leading indicators are beginning to turn. The economy itself has not yet shifted, but we can expect full recovery by 2012. I would have said 2011, but the oil price remains worrying and will delay the upturn.

Where do the opportunities lie?

There are many opportunities for business in this country. Entrepreneurship represents our future beyond BEE. Where BEE was and is necessary to shock and propel our society in a specific direction, we need to start looking at what’s next. The momentum has been created and many sustainable black-owned businesses have been developed. We now need to take what we have learnt and get people to move into sectors that do not require a lot of capital, such as retail and catering, for example.

Fortunately, South Africans are entrepreneurial by nature. It goes back to where our society comes from, which is a culture of self-reliance. That’s why South Africans succeed abroad – we have grit.

Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.

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Business Landscape

Load Shedding – How To Stay Productive

We’ve all already had massive interruptions from load shedding and it’s not going away anytime soon so, instead of being caught out each time and losing productivity, let’s stay steps ahead of the outages and make sure that our productivity stays where it should be…

Warrick Kernes

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They say that prevention is better than cure and with load shedding the best cure is to have a generator, backup power inverter or UPS (Uninterrupted Power Supply) set up to kick in when the lights go out. If you don’t have this in place then you will want to understand when you will be affected and how to minimise the impact of this on your work.

The first step is to know when your area is scheduled for load shedding. You can find out by downloading the free app called Loadshedding Notifier which tells you when Eskom has scheduled areas to be turned off. We’ve already seen that the lights don’t always go out when they are scheduled to do so but it’s better to be prepared than to be caught in the dark.

Many entrepreneurs rely on their normal routine to drive their productivity but once you know that your routine is going to be interrupted then it’s time to re-plan your day. You could plan to get up earlier to avoid traffic or to start work super early so that you get through your priority work before the power goes off.

Arrange your to-do list so that you can get through the highest priority and income producing activities first and then you can get around to the rest of your work. Prioritising your daily actions becomes even more crucial when you have limited time. You can also plan priority work for when the power is out; just imagine how many sales calls you can make when not being interrupted by emails.

If you work from home check if the neighbouring suburbs will have power so you can go work at one of the cafes. Most cafes have free wifi but it can be slow and these networks aren’t always secured so it’s preferable to have your own 3G dongle so that you don’t rely on others for internet.

A few more load shedding quick tips:

  • Work in the cloud so that all your work is backed up automatically and not lost if you suddenly lose power.
  • Unplug devices when the power is out to avoid damage from potential surges when power is restored.
  • Keep your electronics charged up such as; headphones, cell phone, laptop battery, powerbank, 3G dongle.

If your computer battery dies or you run out of things to do then create a list of work that you and your team can do which doesn’t require computers or internet. An impromptu team building lunch or a good old brain storming session could prove incredibly valuable or if your team isn’t up for that then the storeroom could probably use a clean.

If all else fails don’t panic as you can always just go for a walk, meditate, spend time with the kids or go to the gym to clear your mind.

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Business Landscape

4 Tips To Create A Great Conference / Workshop / Event In 2019

Being able to host a great workshop or event is an essential skill for anyone in creative and innovative businesses. Your event will have a major impact – that is guaranteed. However, whether it is a positive or negative impact depends on the how well the event was put together and executed.

Revel Africa

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Your business is fantastic. You work with amazing people, and your industry is dynamic and evolving. There are so many exciting ways available to you to share your good stories: social media, podcasts, videos, live streaming, emails. But the trend we’re seeing of more workshops and conferences is the most exciting, and effective. Why? Because people still do business with people, and face-to-face still has more impact than anything digital.

Being able to host a great workshop or event is an essential skill for anyone in creative and innovative businesses. Your event will have a major impact – that is guaranteed. However, whether it is a positive or negative impact depends on the how well the event was put together and executed.

Here are 4 top tips to create and host amazing events this year

1. Purpose

Identify the purpose of the event. Is it to train clients or future clients on the latest trends in your industry in a bid to position yourself as the subject matter expert? Is it to bring a large multi-campus business together into one space to unite them and refocus and energise them? Is it to bring creative minds together to solve a problem? Answer these questions and you will know if you need a small, vibrant workshop, a large, slick event, or a creative team-building conference.

Plus, having a really clear understanding of why you’re doing this event is the best way to deal with the stress of putting it all together. Anchor yourself to the core reason behind the event, and it will not only propel you forward through the process, but will also make a lot of the decisions easier to make as you go.

2. Prepare

If you are going to host an event, then embrace the reality of late nights, money stress, volatile emotions and extended periods when your nearest and dearest, your social life and your free time take a back seat. There’s no nice way of saying it – an event is a huge responsibility and one that will take up a lot of your time.

The best advice we can give you is to find an event planner straight off to help you put your best foot forward at your event and deliver on your vision for the event. That way, once they’ve done all the heavy lifting, all you have to do is arrive on the day of the event looking fresh, fabulous, and stress-free and allow yourself to revel in its success. Your event planner would have handled everything for you, from haggling with suppliers, to sourcing the best locations at great prices, and should even handle the headache of RSVPs. In the Western Cape and Gauteng we highly recommend Revel Africa for bespoke events and innovative ideas that fit your budget.

Whether you use an event planner or not, you will need to think these through.

  • Decide on a theme – A theme helps to unify your ideas, source expert speakers, and market to the right people. Pick something simple, catchy and on topic. You can even go so far as creating a mission statement for the event to keep your efforts focused, such as, “We care a whole lot about this topic / industry / situation and we couldn’t find a conference that matched what we want and need. Our goal is to bring something that is welcoming and inspiring, where the talks are fresh, and the snacks are even fresher. We’d love you to join us and celebrate the people (including you!) who make this industry great.”
  • Prepare a budget and make bookings – Knowing what your budget is will help you set the price for delegates if it is not an in-house event. Here are the most common items you need to budget for, and book:
    • Venue – Once you’ve found a venue within the price and date range that you had in mind, you can fix the date for the event.
    • Transportation – For out-of-town delegates.
    • Catering – Events can rise and fall on the quality of the food provided. Shop around for this one and request taste-tests.
    • Speaker – Start thinking about speakers very early on, as all the good ones get snapped up fairly far in advance, so if you want your top choices, secure them as soon as possible. For interactive staff sales training we recommend Mark Berger, and for your MC / Inspiration needs, we recommend Warrior Ric.
    • Activities – Think of icebreakers and activities to get people out of observation mode and into participation mode.
    • Marketing – If this event is for external delegates, invest in a good marketing agency for social media, printed marketing collateral, banners, brochures, website updates, and paid media.
    • Team members – Select, and brief the team that will help you with this event.
    • Invitations – Once you have a date, venue, and keynote speakers, you can send out your invitation. Managing RSVPs and payment effectively is critical. Quicket can be a useful payment portal for events.
  • Daily emails: Once the conference has started, send out a daily email outlining the itinerary for that day. Keynote speakers and times, social events, meal plans, highlighted sessions, even the daily weather report can all help the attendee feel more prepared and connected when they reach the event. You can use Mailchimp or any other of the great bulk mailer platforms available.
  • FAQ: An FAQ is great for questions that come up again and again. The answers can be published on an event FAQ page on your website and the link sent in the daily mails. Questions like:
    • Are sessions be recorded? When will they be available?
    • Is parking available?
    • What’s the Wi-Fi password?

3. Productivity

Be mindful of who is attending the session and whether or not the session’s content is suitable to them. A talk that is too basic, too advanced, too demographically narrow, or too far off-topic for the conference – no matter how famous the speaker is – will bring the session’s productivity to a grinding halt.

Another great thing to consider is self-directed co-ordination as a great way to meet new people or to connect with people you’ve known for a long time. Using a Twitter hashtag, a Slack team, a Telegram group, are a great communication channel for the event to ensure attendees easily find information about how to network with each other. If your event is more technical, you could also create a wiki during the event to enable sub-communities to self-organise on the day and share content.

When it comes to how productive the sessions are, as the event planner it might be tempting to participate in the day’s events. However, as a facilitator your role is to remain objective and observe. You can’t facilitate and participate at the same time. Keep scanning the room to sense the mood and energy; keep discussions on track by asking great questions; constantly keep the end goal in mind. Typically, a good facilitator or event planner is often invisible on the day of the event.

4. Participation

There are many creative ways to structure the day’s proceedings to facilitate maximum participation.

  1. Campfire sessions – These start like a traditional presentation, with a speaker at the front of the room presenting an idea to a group of people. However, after 15 or 20 minutes, the presenter becomes the facilitator and shifts the focus of discussion to the audience, inviting comments, insights and questions from those around the room. Campfire sessions allow attendees to drive their own learning and share experiences with others, which also assists with networking.
  2. Birds of a Feather (BOF) – BOF groups are small, informal gatherings of people with a common interest or area of expertise who join up to work together, typically over lunch or during the morning coffee break. You can suggest BOF groups for attendees to join or they can create their own. Sessions don’t have a pre-planned agenda and are aimed at encouraging discussion and networking.
  3. Lightning Talks – As the name suggests, lightning talks give speakers no more than 10 minutes to make their presentation. Because speakers don’t have time to waffle, the presentations are to the point, which keeps audiences focused and energised. A window of between 30 to 60 minutes is usually given to lightning talks, which can allow for up to 12 speakers to be heard.
  4. Silent Disco Talks – This is where many speakers present at once within the same room, while delegates – wearing wireless headphones with channels that they can switch between – choose who they want to listen to. Delegates enjoy bite-sized pieces of information and are always tuned in to something that interests them.
  5. World Café – This simple, effective, and flexible format is ideal for hosting large group discussions. Start the first round of discussion with groups of four to six people sitting around a table, and present each group with a question. After 15 minutes, each member of the group moves to a different table. Once all rounds have been completed, key points from each table are presented to the whole group for a final collective discussion.
  6. Storytelling – This is where speakers tell real-life stories that help illustrate or enhance themes in the conference. The story should contain a beginning, a middle and an end, with characters and plots, like adversity and triumph. Stories should be 15 minutes long, with 10 minutes provided for Q&A afterwards.

Here’s to hosting many great workshops and events this year.

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Business Landscape

What Is Business Insurance And Why Does Your Business Need It?

Your business asset insurance cost will go up if you add on more items, but this is common with all insurances. Not sure why you need it? Find out more information below.

Amy Galbraith

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You need to protect your business against all eventualities. This means that you need to have the ability to pay for any physical or legal damages that might occur, such as a client claiming that they were injured while on your property or an asset being stolen from your property. And business insurance in South Africa is a necessity if you want to apply for business finance, as the bank will need to see that your assets are insured.

You might be wondering now, as a business owner, “What is business asset insurance?” It’s insurance which insures your assets, such as vehicles, electronic equipment, and your business premises. You can also opt to have business car insurance if you have a company car that is used by your employees. Your business asset insurance cost will go up if you add on more items, but this is common with all insurances. Not sure why you need it? Find out more information below.

It protects your assets

Whether you are a small business just setting up or an established company, you likely have assets that are important to keep your business functioning. This could be a business vehicle that you use to transport goods to clients or computers that are vital to your employees.

If you do not insure these assets, you will need to pay for repairing and replacing that might need to happen out of your own funds. And this can become extremely expensive, depending on what has been damaged, lost or stolen. Another reason why you need business asset insurance is that there might be a natural disaster or “act of God” that occurs, such as a fire or flood, which could damage your equipment, meaning that it needs to be replaced.

It protects you from legal issues

Some of the problems that businesses face include legal issues, which can become costly and tiresome. These issues can be handled easily and efficiently if your business insurance to help pay for legal fees and settlement fees with the client or employee who is issuing the complaint.

In the case of being sued or taken to court, it is useful to have a business insurance offering available to help you. If you do not have this type of insurance, you will soon see that legal costs can become exorbitant. Legal issues can also reflect negatively on your company in the eyes of other clients or employees, but having business insurance can help to clear up any problems effectively and without any drama.

Your business will not shut down due to incidents

If your business vehicle is stolen or if the equipment is damaged, this could lead to your business closing for a period while you try to recoup your loss of money. This could lead to you losing even more money which could be highly detrimental to the success of your business.

Your insurance company will be able to compensate you the lost funds, granted that the issue is covered by the insurance cover you have in place. This will allow you to stay open despite the fact that you are experiencing difficulties due to equipment not working or other problems. You could even opt for emergency assistance if there is a natural disaster which will keep you, your employees and even your property safe from damage.

Your employees will be protected

Your employees are the backbone of your company. And, as such, you should have protection in place for them. You should have workers’ compensation coverage in place so that should your company lose money or be unable to pay your staff, their needs will still be covered.

And business insurance will protect them from any possible lawsuits that could be lodged against them by clients or customers. It can become highly expensive to pay for these out of your own pocket. Protecting your employees protects your business, so be sure to invest in insurance which offers workers’ compensation as well as disability cover to protect your employees.

Think smart for your future

Having business asset insurance and business insurance is important to both small businesses and large corporations. This is because your assets will be protected from theft and damage, which can be costly to replace and repair. You will also be able to weather any legal storm that might come your way, as well as being able to protect your employees and their welfare.

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