Over the years entrepreneurship research has been unclear about indentifying the factors that contribute to success when founding and growing a new venture. Researchers have largely struggled to find the magic recipe for entrepreneurial success. However, the one thing that has emerged as a robust predictor of entrepreneurial survival and success, is a network of relationships.
How networks promote success
Research has clearly highlighted that both personal and organisational networks contribute to the success and growth of a new venture in at least five different ways:
- Networks influence the breadth of ideas and technologies that a person is exposed to as they search for a new business idea.
- Relationships provide people with links to funders of new ventures.
- People in your network often open doors to cheap sources of supply and are very often the link to hiring talented employees.
- The first few sales of most entrepreneurs will be to people they already know.
- A strong network of relationships provides more flexibility in dealing with crises and contingencies when they arise.
Getting by with few resources
To make this a little more real, it is valuable to reflect on aspects of my own entrepreneurial journey; I discovered the value of relationships as I walked this road. In 2003 I decided I wanted to be master of my own destiny and escape the trappings of the corporate world – I wanted to launch a new business.
I entered the financial training industry because that is what I had been doing internally at my previous employer and I was familiar with the latest ideas, technology and concepts in corporate training. My business partner and I developed a suite of offerings and products to fill market needs that we learned about by talking to colleagues and associates in the corporate world. As we built the business we drew on a broad base of relationships to help us get up and running. A friend I had helped set up a Web design company three years earlier did all our Web and IT work free of charge. A student who had been in one of our classes did all the graphic design and we drew on family and friends to test all our products, often around the kitchen table with a bottle of wine and a take away pizza on hand.
Our first client was our previous employer; our former boss hired us to deliver some of our products in the organisation where we had worked. Our second client was introduced to us by a university friend of my business partner; he commissioned us to create a financial literacy board game for the company where he worked. Our third client came from a referral; one of our previous colleagues referred us to her husband who owned a company that had a need for training. We did not take on any outside capital; the capital to fund our first year of operations came from the sales revenue from our first three clients. As I reflect on the diary that I kept of my first 12 months in business I am amazed at how we managed to do so much with so little and it was largely because we were drawing on the people we knew to help us keep the business afloat. The bottom line is that a network of relationships is a very valuable resource when starting and growing a business. In this article we will explore what kinds of relationships are valuable in an entrepreneurial context and how to build an entrepreneurial network.
Types of relationships
It is important to recognise that not all business relationships are the same and that different kinds of relationships serve different purposes in developing an entrepreneurial venture. One way to distinguish between diverse relationships is the strength of the tie. Strong ties are deep relationships that develop over an extended period and usually take effort and energy to maintain. Weak ties are looser relationships that form as a result of relatively brief interactions with others. Both weak and strong ties serve useful purposes in an entrepreneurial venture but their purpose is distinctly different. They each take different amounts of energy and effort to maintain and entrepreneurs need to maintain a balance between strong and weak ties to give their venture the best chance of success.
Strong ties are important for three reasons:
- Bouncing ideas for new products, services or business strategies.
- Mentoring and support.
- Information sharing.
Firstly, entrepreneurship is about creating something new and doing things differently. Developing new products or services is an uncertain activity. When engaging in an uncertain activity we need people we can trust with whom we can share our ideas and get honest feedback. Such a discussion is best had with someone with whom you share a good relationship – a strong tie.
Secondly, an entrepreneurial journey is a tough and lonely road and one reason that entrepreneurs fail is because they give up. They become drained and disheartened when things don’t go well or they take it personally when people don’t buy their products. It is at times like these that you need to get support and advice from someone you can trust. Thirdly, in an entrepreneurial venture, information is often a source of competitive advantage. If an entrepreneur hears about a request for tender or a new piece of technology before anyone else then they can quickly position their venture to take advantage of that situation. Really valuable information very often flows only through close relationships. Therefore strong ties are regularly a source of the most valuable incoming information in an entrepreneurial venture. Because of the depth of relationships in strong ties, they take time and effort to maintain and require reciprocation – doing for others what they do for you. It is often challenging to maintain many strong ties and successful entrepreneurs often supplement a few deep relationships with a broad base of loose relationships, or weak ties.
Weak ties extend the reach of an entrepreneur across a much broader base of people and provide valuable information flows for a lot less effort than strong ties require.
Weak ties, or loose connections as they are often called, serve three clear purposes:
- They are often the source of information about a new sales opportunity.
- They provide connections to potential employees and service providers.
- They serve as a source of reputation in the market place.
Because entrepreneurial firms often work from a very low resources base, they cannot hire expensive sales people, invest in big media and marketing campaigns or use the services of a professional recruitment firm. They depend heavily on a network of loose connections to keep the business alive with word of mouth marketing and referrals, accessing free or low cost suppliers and hiring friends, or friends of friends. The key to effectively using a network of relationships as a valuable resource in developing a new business is balance. You need to maintain a few strong ties to serve as a critical support system and source of information when required, while broadening your reach with a vast number of weak ties to garner the benefits of information, referrals and leads.
Steps to build your own strong networks
If you become sold on the idea that it is valuable for you to foster a broad set of relationships as you build and grow your business, what does this mean practically? Fostering relationships is not rocket science. It requires the application of a few simple practices. Although these practices may seem obvious and uninteresting, they are incredibly powerful. Disciplined application of these practices can create huge leverage for a business owner by extracting big results for relatively little effort.
Practice #1: Be honest and genuine
Valuable relationships are based on trust. Trust is forged when people are honest with each other. People you interact with will very quickly assess whether you are being fully honest with them and this will set the tone and the parameters for the rest of the relationship. If they decide early that you are dishonest or untrustworthy, you are doomed. That relationship is unlikely to be of any value in the future. If others trust you, you will probably be allowed to forge a relationship with them that may serve you well in future.
Practice #2: Ask and listen
Relationships are built around connecting points. Connecting points emerge as a result of disclosure. To find connecting points with others you should ask open-ended questions that allow people to disclose something about themselves or their business. Then listen carefully to the answers they provide. Build on their answers as you follow up with another open-ended question and before you realise it you will be involved in a valuable conversation that can forge the foundation of a new connection.
Practice #3: Share your story
Stories are one of the most powerful mechanisms for enabling others to remember key ideas and insights. This is why The Bible is filled with passages phrased as stories and why so many people can remember the key message from the fable “The Tortoise and the Hare”. Our minds are more able to latch onto ideas that are shared within a story and if you want people to remember who you are and what you do, tell them a story. Spend a bit of time crafting your personal and business history into an interesting and concise story. The next time someone asks you what you do, tell them your story and you will be blown away by how much more they remember. The more you tell your story, the better you will become at telling it concisely and effectively and the more people will connect with you and remember you.
Practice #4: Follow up
Research has shown that a single follow up from an initial interaction can significantly change the trajectory of a relationship between two peple. Dropping someone an email or a call or sending them a thank you note after that first engagement changes peoples’ perception of the relationship and significantly increases the likelihood that the parties will interact again at a future date. If you want to benefit from the interactions you have with others, get in the habit of following up with them.
Practice #5: Connect others
The value of a network moves to a new level when you are able to effectively connect others in your network with each other. People will begin to truly value their relationship with you if you are able to connect them with others in a meaningful and valuable way. To do this effectively you need to understand the needs and abilities of both parties and have a trusting relationship with both. As you begin connecting people in your network with one another, they will begin connecting you with others in their network. Over time your network of relationships will begin to multiply many times over.
Practice #6: Maintain an up-to-date contact book
This piece of advice might seem absolutely obvious but I am amazed at how many business people don’t have all their contacts in one easily accessible place. A contact will only create value for your business if you can quickly call on that person at the time that you need them. Creating value from contacts is often about timing and if you cannot find a person’s contact details to call on them at the right time, the window of opportunity might pass you by. These days one can easily use technology to maintain a database of contacts and that database, if well populated, will undoubtedly serve as one of your business’s most valuable resources.
Invest in relationship assets
Relationship building in business is not a new recipe for success; it’s not a fad or some amazing new discovery. It is one of the oldest and most fundamental principles for business success. Yet it is more relevant today than it has ever been. In a world where we have access to more information than we could ever imagine and in which people are often fickle and fast, having a broad but balanced network of people you can call on and trust will be one of your business’s most critical assets. If you are serious about business then it is worth getting serious about your business relationships.
How TomTom Telematics Can Keep Your Business Moving Forward
Successful businesses need to find ways to improve their margins while still delivering excellent and efficient customer service. VDM’s CEO, Deon van der Merwe, explains why this wouldn’t be possible in his business without TomTom Telematics’ solutions.
When TomTom Telematics entered the South African market in 2010, the local team took a deep dive into the different industry verticals they were servicing.
The more they got to know their customers, the more they realised a different solution was needed to address local conditions, and a subscription model was introduced whereby customers didn’t need to invest a large capital outlay into TomTom Telematics’ technology, but would receive the tech and software, including installation, at no extra cost, in exchange for a monthly subscription fee.
This model gives SMEs affordable access to TomTom Telematics’ solutions, but it’s had another benefit as well: As TomTom Telematics introduces new innovations, existing customers can benefit — without the costs associated with replacing all of their existing technology themselves.
An indispensable tool
For a transport and logistics business like VDM Group, which has more than 160 vehicles on the road, this means they have access to incredible new offerings, without needing to replace their TomTom units themselves.
“TomTom plays a critical role in our business,” says Deon van der Merwe, CEO of VDM Group. “It’s an indispensable tool in ensuring quality customer feedback and the management of KPIs for all supply chain stakeholders.
“Earlier this year, TomTom Telematics launched their New WEBFLEET product. We were very satisfied with what we had, and yet they still approached us and offered to replace all our existing units with new tablets, and they’re covering the installation costs,” explains Deon.
“New WEBFLEET is the result of TomTom innovating their product based on customer feedback from around the world, and the local team wanted to ensure we had access to the additional functionality and innovations that had been introduced.”
Seamless integration with your network
According to Deon, the new TomTom PRO 8275 units seamlessly integrate VDM’s fleet scheduling software with information they extract from TomTom, including individual vehicles’ standing time and arrival notifications.
“The software from TomTom is open API, which means that all our various applications can communicate and interact with each other,” he explains. “From a productivity perspective, we no longer need to manually capture any trip information.
In addition, we have every conceivable piece of data available that will assist us to run a leaner, more cost-effective fleet, enabling us to ensure that we are delivering on all our KPIs — particularly with regards to meeting our customers’ needs.”
VDM is a large transport business, but Deon believes the benefits for SMEs are as great, if not more so. “Many SMEs don’t have the back-office support that we do. The ability to capture and use this information without a team of admin specialists at your disposal is a huge competitive advantage for smaller businesses,” he says.
Offering you the competitive edge
VDM offers a specialised logistics service that creates custom-made options for clients. In order to ensure the most optimal and cost-effective solutions, while still ensuring top quality delivery, they need to consider special and complex individual customer requirements, from the point of origin to the point of destination, before finalising a customer-specific solution.
“We take into account a host of factors, including inventory carrying costs, volume requirements, product specific factors and route to market,” explains Deon.
“Road transport significantly impacts total supply chain costs, and if not managed properly, can have a severe impact on the sustainability of any particular channel. We try and manage this risk by continuously improving our service through innovative logistical solutions, the use of advanced technology, vertical integration and a team of passionate and talented experts.
TomTom assists in creating differentiators
“This focus has helped us to develop a market offering that includes dedicated and completely flexible inter-modal solutions, which is a big differentiator for us. TomTom Telematics plays a key role in our total productivity, helping us measure the performance of road transport across our supply chain.”
Deon believes that what you don’t measure you won’t know.
“TomTom provides updated fleet statistics that allow us to constantly benchmark our fleet against pre-defined route surveys and, in so doing, enables massive savings in fuel and total turnaround time.
Communicating via the WEBFLEET platform also helps us save time and creates a formal trail of correspondence with our drivers. I don’t believe it’s possible to successfully run a business like ours without a solution like this.”
Sasfin Continues To Support SME Growth
Sasfin’s equity stake in fintech lender Payabill set to enhance SME growth.
In another major step forward in supporting growth in SMEs, Sasfin today announced that it has acquired a strategic stake in fast-growing fintech lender Payabill.
Payabill, a 100% digital lending business, provides working capital and/or trade finance to small businesses. The collaboration between Sasfin and Payabill accelerates financing opportunities for customers.
Sasfin, South Africa’s leading business challenger bank, last year successfully launched its digital platform, B\\YOND, for SMEs.
“Sasfin has been investing in fintechs, building digital capabilities (such as B\\YOND) and working with third parties (such as XERO Accounting) for a number of years with the aim of adding value to our business and wealth clients. Payabill has made huge strides in giving businesses access to digital finance and we are thrilled to announce this investment,” says Sasfin CEO Michael Sassoon.
Payabill CEO Eli Michal launched the pioneering fintech start up in SA in 2017. Payabill settles suppliers directly for its clients and allows clients to select their own extended payment terms. “We are incredibly excited by the opportunity afforded to Payabill by having Sasfin as an equity and debt partner. Sasfin will provide access to new channels and much needed funding that enables us to support the growth of small business finance in South Africa,” says Michal.
Michal started the fintech as he “wanted to enhance access to finance for small businesses in South Africa. We all know that boosting small business creates jobs and enables growth. Traditional lenders have neglected this segment of the market due to the high costs associated with on-boarding and assessing these customers, as well as managing their credit risk. It made no sense to us that a retail consumer could get multiple forms of credit, almost instantly via electronic channels, but small businesses could not. They were being neglected. With this in mind, we set out to build a completely paperless, digital solution to address this market’s unique requirements.”
Currently, Payabill offers loans of up to R150 000 to businesses. The intention is that with the investment made by Sasfin, Payabill will be able to offer larger loans to SMEs in the near future.
The alignment of Payabill’s aims and Sasfin’s long-term focus on small business in SA made for an ideal partnership. “SMEs can now borrow digitally, via Payabill, and bank via B\\YOND from Sasfin – reducing admin and costs which often stifles small business growth. Both B\\YOND and Payabill are gaining meaningful traction in the SME market and there are a host of additional digital initiatives that we are working on to further help small businesses thrive,” says Sassoon.
“While Sasfin has always offered a trade and debtor finance solution, this was largely for more established businesses. The new offering speaks to smaller businesses that are passionate about growth, and our larger Trade and Debtor Finance offering will be there to support businesses that reach the next phase in their development,” says Sassoon.
Sasfin Holdings Limited (“Sasfin” or “the Group” or “the Company”) is a bank-controlling company listed in the “Financials: Investment Services” sector of the JSE Limited (“the JSE”). Sasfin and its subsidiaries provide a wide range of complementary banking, financial and related services.
Driving Your Business Growth Towards More Customers
Designed to help its customers get the most from their businesses through the right telematics solution, New WEBFLEET can help you reach your customers quicker, get more done, improve efficiencies, save costs and boost your revenues.
Europe’s highly regulated operating environment has made telematics ubiquitous in business. On the one hand, this means industries across the spectrum have become safer, more efficient and highly productive across the EU. On the other, it’s much harder to stand out from the crowd when everyone follows the same best practice standards.
“We don’t have those same stringent regulations in place,” says Justin Manson, Sales Director, Africa at TomTom Telematics. “Our clients have realised what a huge competitive advantage this actually offers them though.
“Locally, everyone understands the role that telematics plays in tracking what your drivers are doing right and wrong, and use it as a tool for encouraging good driving practices, but there’s so much more to this solution, and we’re making it our mission to help business owners really use it to their benefit.
“When deployed across the organisation to its full capabilities, a telematics system can radically improve productivity and workflow. Done correctly, a business can save up to 10% on its bottom line, and redeploy that cash into the company’s growth, thanks to drivers reaching customers quicker and getting more done. The right data also increases productivity and ensures better turnaround times.”
Thomas Schmidt, MD of TomTom Telematics, loves visiting South Africa for this very reason. “Because so many business owners aren’t using telematics to their full extent, there’s such a huge opportunity for us to assist businesses in their growth here,” he says. “We deliver a high-value stack of products that can change the way companies operate, and most importantly help them save money and make money. The challenge for us is educating our customers so that they understand what our solutions offer, and the incredible impact they can have on a business. We consistently improve these solutions based on customer feedback as well, making them very much from customers for customers.
“Anyone can buy a map for less than R100. Why invest in such expensive devices? The answer is because we’ve developed solutions that change lives. With the right data — and access to that data — you increase safety, simplify your business, drive efficiencies, increase your output and customer service, and ensure you are always productive and reliable — across the organisation. And that impact can be measured, and given a real ROI value.
“Imagine the impression companies that operate at that level make on their industries. They stand out from their competitors. There is so much room for growth in South Africa as we deploy these solutions.”
As an organisation, TomTom Telematics is focused on continuous growth and innovation as well, constantly learning from market conditions, its customers and industry needs to improve its product offerings.
The result is the launch of New WEBFLEET in February 2018. “We’ve increased the value we offer our customers,” says Thomas. “We’ve collated data from hundreds of thousands of customers around the world who gave us their feedback through surveys, and New WEBFLEET is a window into easy-to-use, smart fleet management that is a game changer for companies.”
“TomTom Telematics is in the business of helping businesses,” agrees Justin. “Our goal is help our customers master their challenges. The right data at your fingertips will help you change the way you operate. That’s our goal. How much cash is being left on the table in an organisation because of inefficiencies?”
Introducing New Webfleet
The smartest way to manage your vehicles and mobile workforce
TomTom Telematics’ state of the art Software-as-a-Service (SaaS) fleet management solution, with best-in-class user interface, is inspired by two decades of working together with customers to achieve more for better fleet management. New WEBFLEET is everything you need to manage your vehicles in the cloud, in real time. It allows you to monitor reports and dashboards, manage orders/workﬂow, and improve driving behaviour, safety and service, helping you save fuel and reduce costs.
Best-in-class user interface
- A future-proof platform with a completely renewed interface, based on the latest HTML5 technology and driven by continuous innovation.
- Simple and clean interface, with minimised clicks for faster working.
- Intuitive functionality, means it is more accessible for greater impact across your business.
- User rights management and state-of-the-art data handing ensures the highest level of data privacy and data security.
- Fast access to the right information.
Know where your vehicles are and where they have been. Different map options such as Google, Google Street View or satellite map are enriched with traffic information, giving you a more detailed view on what’s happening on the roads. Toggle between different types of information on the map such as traffic, addresses and areas and create specific views, so you only see the information you need.
New WEBFLEET’s dashboard gives an overview of performance at a glance. Up to 27 KPIs can be used to track the performance of vehicles, individuals, benchmark teams or give a simple overview. This helps you to track real-time performance against your pre-defined KPIs.
New WEBFLEET gives you instant access to the information that matters, meaning you can spot trends over time and use real-time information to make smarter and more informed decisions. You can instantly download or schedule reports to help you stay on top of everything — from fuel efficiency and legal compliance to quality of service.
Manage on the move
New WEBFLEET is optimised so you can manage your fleet on any device by entering WEBFLEET through a web browser or by downloading the WEBFLEET Mobile app on your smartphone.
Send routes direct to drivers
- Plan accurate routes in New WEBFLEET by adjusting multiple variables such as location, time of departure/arrival, traffic and vehicle type.
- Get a choice of alternative routes, as well as suggested fastest route with traffic.
- Customise your route by simply adding new waypoints, or dragging and dropping existing waypoints on a route. Then choose from guided or forced route* options.
- Send planned routes directly to a TomTom PRO driver terminal to keep your drivers on the right track.
Personalised Map views*
- Create your own saved map view to reach information you need fast.
- Switch between vehicle groups or areas, without needing to adjust the map filters and zoom levels. n
Many ways to customise WEBFLEET to suit individual requirements from personalised views to adding information to make what you see more informative on one page.
Plan a route the way you want it
Use multiple variables (including waypoints) to give fastest or most efficient routes.
Across different device types, allowing you to always stay on top of business.
Simple, clean and easy to administer
Toggle between views to get the right information to focus on the task in hand. Get the right information to the right people at the right time, keep data secure and in the right hands.
Send routes to driver terminals
In real time, ensure drivers follow or avoid specific routes.