I am passionate about the laws of economics and how they relate to business – and business growth in particular. Here are my ten rules, which I believe can lead to real growth in your business.
1. Honour your community
The community deserves the same honour as a father and a mother. When you establish a profitable venture, it is your duty to ensure that the community benefits as well. People within that community must be trained and employed on the project. There must be a transfer of skills which will then remain in the community and contribute to its empowerment.
2. Educate your children
Poor education lies at the root of South Africa’s dire unemployment statistics and the inability of entire communities to enter the economic mainstream. Government and the private sector need to work together to bring quality education to the children of the nation. It needs to start at primary school level and be followed through to tertiary level. A priority is to reopen the teachers colleges and urgently address the training and performance of teachers. The passion for teaching needs to be rekindled.
3. Do not lower standards of education and training
Solutions must be found to support those who cannot meet the entry level standards at any educational institution. There can be no lowering of the bar if we are to participate in the global economy. This applies to all levels, from primary school, through to matriculation pass rates, to teacher training and to college and university entry levels.
4. Give women the power to run things
Women are community-minded visionaries. They care about supporting families and children. They understand that people come first and that best practice means doing what is in the interests of the people. For example, mothers in disadvantaged communities should be allowed to run the school feeding schemes or scholar transport services as community enterprises – it would immediately put an end to the corruption and incompetence that plague these critical services.
5. Don’t import
Local manufacture and production need much stronger support. Government should impose strict controls to discourage imports into the country, provide strong incentives for growing local production, and introduce regulations to ensure that necessary importation is balanced by added value exports.
6. Do not employ foreign labour (outside the continent)
Bringing in skilled workers from abroad does tremendous damage to economic growth. Our focus should be on growing our skills base at home and, by extension, on the continent. Companies should have the foresight to build a skills pool to meet the country’s needs.
7. Do not front
Black economic empowerment cannot be achieved if fronting is practiced or tolerated. A primary objective of BEE, including the broad-based Codes for BEE, is to drive the development of sustainable black-owned businesses and black-owned industries. Fronting has been a serious impediment to establishing a black capitalist class and opening the economy to all.
8. Match reduced wages with increased profit share
If people are to be employed at a below-regulation wages, in the interests of stimulating business growth and job creation, then this should be matched with commensurate profit share. The labour unions are routinely criticised for their stranglehold on job creation, yet we need to be vigilant against exploitation of workers and our hard-won labour rights should remain protected. An equitable solution is to implement profit sharing that benefits all the people who work in an enterprise.
9. Enable community ownership of assets
Marginalised communities have to break free from the apartheid legacy of being excluded from property ownership if we are to open the economy to all. Those who enjoy the privilege of asset ownership (which includes the state) have a moral responsibility to find ways of spreading the ownership of assets. The Gestalt model calls for developers to include a structure for community share of ownership in new ventures, whereby the developers can make a profit but ultimately withdraw and sell the asset to the local community.
10. Buy local
Let the money spent on a project stick to the fingers of the community. This means procuring goods and services from the local community, promoting local manufacturing and enterprise development (supported by capacity building and skills training as required) and commitment from government to long-term procurement contracts from new local businesses. Multi-national companies that come in to a community to make a profit have a moral obligation to support and nurture the local economy in the areas where they operate, and leave a legacy of empowerment and growth.
[box style=”grey map rounded shadow”]
How To Choose An Expansion Path. The answer starts with your strategic plan. Click here.
Why Smart Business Growth Means Smart IT Budgeting
(…And how to do it)
For any business today, no matter its size or sector, getting the IT budget right has become a critical part of success and sustainability. The difference between a three-device network and a fifty-device network has significant ramifications for your IT spend and your overall budget outlook.
Let’s take a closer look at several potential costs and how to plan for them…
Network: The driving force
Essentially, the network is the backbone/core of your IT infrastructure. It needs to be reliable, fast and efficient. Often, a young and growing business will have a piecemeal network in place, bolting on new sections over time. This can lead to the network becoming inefficient and slow.
The important thing to note is that when you have reached capacity on your current network, is it’s sometimes better to start from scratch and also leave room for expansion down the line (rather than adding to the existing network as a quick fix).
While it may appear more costly (and scary), the end result is a reliable network that you won’t have to worry about revamping for many years.
Licensing: Pricey but critical
Software licensing often comes as an unexpected (and unpleasant) cost to many business owners and their financial teams. Indeed, purchasing legal software can be pricey if you aren’t prepared for it (and don’t understand how it all works!). However, if you buy software licenses in bulk, or commit to a longer term, they can cost far less…so again, budgeting intelligently for your business growth can save you money in the long term. Also remember that many software licenses nowadays can be rented on a per user per month basis so its flexible and always up-to-date.
Maintenance: Be realistic
As the business grows and expands, so too will your IT maintenance needs. The key factor to note is to carefully consider the potential costs of IT failures and hardware issues. You need to take into account that you will undoubtedly have to spend money on maintaining your computers and overall network – and breakdowns can be extremely costly in downtime and lost productivity.
Some businesses find that it makes good financial sense to employ someone to be an IT technician in addition to taking on other responsibilities – but this person may not have the right expertise and experience to manage everything. The other increasingly popular option is to outsource your IT management. With flexible pricing options now available to businesses, this is becoming a viable and often much more flexible route to take.
Think Beyond The Box
With a holistic view of your business finances and admin in place, Sasfin’s new digital banking platform is engineered to help you grow your business.
Welcome to the banking platform designed to support your banking needs. In response to more than 50 years of financing and supporting SMEs, Sasfin has launched a digital banking platform, B\\YOND, to help address the pain points and pressures that business owners face in South Africa.
“We’ve spent decades understanding what makes SMEs succeed or fail, and a lot of it begins with how well a business owner understands their finances,” says Sasfin CEO, Michael Sassoon.
“Failed SMEs often tend to either neglect or become completely consumed by their finances and admin. We wanted to create a platform that could help them take control of these factors, and give them a full 360-degree view of their businesses.”
B\\YOND was built to enable businesses to attend to their finances and admin seamlessly, thereby ensuring that entrepreneurs can focus on their clients — driving revenue and enhancing their products and services in the process.
Everything you need on one platform
According to Sassoon, entrepreneurs on the B\\YOND platform will never need to set foot in a branch again. The sophisticated technology incorporates many value-added services at no additional cost, including:
- B\\YOND online applications: Businesses with multiple shareholders and directors can apply online, by uploading documents and signing the application digitally.
- B\\YOND payroll: A simple-to-use and SARS-compliant payroll function enables business owners to perform their own payroll management.
- B\\YOND invoicing: Businesses can create and send personalised quotes and invoices directly from the platform.
- B\\YOND insights: Smart dashboards generated through clever account and transaction classification and tagging helps manage revenue and expenses, and keep track of projects.
- B\\YOND integrations: Direct-feed integration into Xero ensures that small businesses and their accountants can safely and seamlessly connect their Sasfin Bank transactional data with Xero, the fastest growing cloud-based accounting software provider in the world.
Serving the entrepreneur
While there is much in store for the next versions of B\\YOND, the platform currently offers business leaders the basic tools they need to run their businesses smoothly in one place at no additional cost, with the ability to bank at their convenience.
“Sasfin has always existed to serve the entrepreneur and investor, the two key drivers of the South African economy and it bothers us that there is such a high failure rate of entrepreneurs in our country. We have spent the last three years building B\\YOND — a future-fit digital banking platform to help these entrepreneurs,” says Sassoon.
Engineered for success
Sasfin has gone above and B\\YOND to bring you a new digital banking platform that gives you the tools to make managing your business simple and profitable.
B//YOND is a value-add to all Sasfin Transctional Banking clients
Bank outside the box
The Sasfin Transactional Banking Business Account is designed for SMEs who want to focus on what they’re most passionate about — their business — while their banking platform not only sweats the small stuff for them, but helps manage and grow their business.
- Do you spend unnecessary time on banking?
- Does your bank pay you market-leading annual interest rates?
- Does your bank give you easy cash management in real-time?
- Would you like to manage your payroll and invoicing from your bank account?
- Does your bank help you keep track of your cash flow, manage your admin, and provide you with the set of tools you need to help run your business successfully?
Sign up today and have access to a whole new world of banking better for your business.
Call 0861 SASFIN for more information.
A Short Cut For Corporates To Digital Innovation: Start-ups
Charlie Stewart, co-founder and CEO of Rogerwilco shares his advice for turning to start-ups for solutions.
If there is one anathema in corporate culture, it is failure. With profit to be made and share prices to increase, failure is simply not an option. And yet, when listening to stories about success in the digital space, failure is there to put one on the right path to success. The phrase ‘Fail fast, Fail often’ is often bandied about, and innovation can be seen as a constant process of iteration, test and failure, repeating this until a well refined service or product is on the table.
Many corporates are waking up to the uncomfortable fact that at a structural level, the type of innovation required to grow in today’s digital landscape, is out of their reach, at least when trying to come up with it internally. So what to do? Charlie Stewart, co-founder and CEO of Rogerwilco shares his advice for turning to start-ups for solutions.
1. The start-up solution
Corporates comfortable in the digital space – Apple, Alphabet, Facebook and Amazon – have been buying startups for years, and now companies are realising that when it comes to Blockchain, artificial intelligence and machine learning, they need to turn elsewhere. And they are. Matt Garratt, Vice President of Salesforce Ventures noted that of the roughly 1500 tech acquisitions Stateside in 2016, half of them were bought by non-tech companies, showing that buying a start-up is a quick way to acquire new technologies, skills or patents.
But purchasing a company with a fully developed product can be an expensive and often risky play. Instead we are beginning to see a trend where corporates are framing agile startups as solution providers, offering them seed funding to come up with answers to digital headaches.
In the US, defence contractor Lockheed Martin has turned its investment strategy around, focusing on young startups instead of more mature companies. In the region of $20 million was ploughed into startups in 2017, helping Lockheed Martin to get a slice of the pie in fast moving spaces such as cybersecurity, autonomous vehicles and nanotechnology.
2. Outsourcing the problem
For corporates turning to start-ups, there are two benefits. Firstly, by doing so companies are casting their net a bit wider, with not only more eyeballs on the problems but, importantly, without the restraints of the corporate boardroom. There is more out-of-the-box thinking involved, no internal politics to worry about and far less of a threat of somebody’s career being jeopardised.
Secondly, if a start-up comes up with a solution, investing in the fledgling company can be cheaper than purchasing one with an established solution. If a buy-out is on the cards, it is less risky too since the due diligence process has been worked through and cultural challenges have been ironed out.
But not all start-ups actually want a buy-out. Some rather prefer access to market and skills transfer, especially around the commercial side of business. Yes, they do need investment, so companies can provide them with a proof of concept to take their idea forward, or potentially a more structured form of investment in their business.
3. Cape Town: the start-up hub of Africa
Locally, Cape Town can be seen as the tech start-up hub of Africa, and is certainly a good place for corporates to start sniffing around for that digital innovation golden ticket. Events such as last year’s AfricArena conference proved that Cape Town can be a fruitful hunting ground. 80 start-ups from across Africa attended the inaugural event, and were tasked to find solutions to problems provided by corporates beforehand. Air France, for example, was looking for innovative mobile solutions, the City of Cape Town wanted to see how technology can be used to improve the tourism industry, while RCS asked for a loyalty programme to match a new credit programme.
By all accounts the event was a major success, connecting start-ups with corporates and investors, both attending the event and dialing in. The winner of Air France’s challenge, mobile payment solution provider WeCashUp, received multiple offers of investment and the project has moved on to the proof-of-concept phase.
4. The start-up lifeboat
Many companies need to face up to the fact that the current corporate structure they are working within does not allow for the type of innovation required to adapt to, never mind thrive, in a digital world. South African companies were perhaps sheltered from the digital tsunami that has eviscerated the analogue business world, but the wave has hit our shores. If it is innovation that is needed, it is time to turn to agile startups, far better adapted to a sink-or-swim digital environment, to come up with the solutions.
Snapshots2 weeks ago
27 Of The Richest People In South Africa
Self Development1 week ago
5 Inspiring Quotes From Madiba To Stir You Into Action On Mandela Day
Angel Investors5 days ago
A Comprehensive List Of Angel Investors That Fund South African Start-Ups
Entrepreneur Profiles14 hours ago
Karl Westvig Of Retail Capital Shares His Insights Into A Year-On-Year Double-Digit Growth Business
Ongoing Learning3 days ago
15 Of The Best And Most Unusual Online Courses For Entrepreneurs
Lessons Learnt3 days ago
11 Things Very Successful People Do That 99% Of People Don’t
Small Business7 days ago
Even SMEs Can Use Big Data: Here’s How
Lessons Learnt2 weeks ago
Brian Tan Of FutureLab.my – Bridging The Knowledge Gap Through Social Learning