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Successful Entrepreneurs Limit The Downside To Maximise Profits In The Future

The year ahead will be tough, but commercial businesses that can process increased complexity and drive an entrepreneurial agenda are likely to outperform, says Standard Bank.

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Commercial businesses, which earn revenues of between R300 million and R1.2 billion, are seen as a fast growing market segment despite the economic headwinds due to their ability to adapt quickly to changing circumstances.

Head of Business and Commercial Banking at Standard Bank, Craig Polkinghorne, says while conditions will be tough, businesses that thrive will be able to limit the downside and thereby maximise their long-term futures.

“Growing entrepreneurship is a priority for us. It is time for Africa to scale up growth, but businesses still need to bring the right ideas to the table so they can be guided on their journey. Education is becoming increasingly important in this regard, as is the ability to make sure short-term challenges do not scupper a good business opportunity,” says Mr Polkinghorne.

Related: Spring-clean Your Business and Bear the Fruits of Increased Efficiencies

He says an entrepreneur is a person who “relentlessly pursues opportunities regardless of the resource constraints that get in the way”. So entrepreneurship does not simply relate to small start-ups.

“A successful business ready to take the next step is equally important and we look to support and partner them,” he says.

Growth and economic activity globally is likely to come from this mid-tier and entrepreneurial business segment.

“It is an area which is likely to see outperformance, as big firms face margin pressure and look to shed jobs. Mid-tier businesses have an opportunity to move quickly and get to market more effectively,” he says.

Funding Opportunities

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According to Mr Polkinghorne, one of the risks entrepreneurs face is using short-term funding to fund long-term assets.

“It is important that we understand and advise on appropriate funding levels – this is where we can get it right and we are already having those conversations.”

However, due to the complex nature of the global market and regional value chains, education is becoming increasingly important to ensure businesses are ready to take the next step to thrive.

In this regard, Standard Bank has set up two incubators in Johannesburg. The Business Incubator based in Rosebank, that provides mentoring, coaching, and access to training in enterprise development and the Technical Incubator at the University of Johannesburg.

A Virtual Incubator, meanwhile, will provide entrepreneurship co-working space at Workshop 17 in the Watershed, Cape Town, and offer access to development opportunities. Additionally, three satellite incubators run by Standard Bank’s partner LifeCo, will support social entrepreneurs operating in the Free State, Limpopo, and KwaZulu-Natal.

Related: How to Put your Small Business in the Best Position to Get Credit from a Bank

Once an innovator has completed a programme at one of the incubators, the Standard Bank Incubation team will monitor his or her business for the next twelve months, measuring the growth and viability of the business.

Mr Polkinghorne says about half of commercial businesses are looking to expand into Africa, but increasingly need a solutions driven, bespoke response.

“The ability to process complexity and receive on the ground sector expertise and assistance to help drive growth is crucial. We see Africa as our home and will continue to drive her growth by helping businesses maximise the opportunities on offer,” he says.

Mr Polkinghorne believes Africa should look to solve its own problems. “We have the capacity to support business growth and development, for example. But there are a host of potential investors who can assist in driving the African growth story.”

A major focus area needs to be an improved understanding of the impact of macro-economic factors on value chains.

“All businesses have a value chain, but managing this is becoming more complex as more goods cross borders and regulatory burdens increase. In the short-term, businesses need to manage their working capital and be aware of every facet of their business at all times with trading partners,” he says.

Related: How to Fund your Small Business

Mr Polkinghorne says a “relentless pursuit of opportunity” gives a commercial business every chance of being successful over the medium term.

“There are big trends that will sweep well prepared businesses along. Long-term forecasts in population growth, mobile penetration and the use of technology that leap frogs legacy infrastructure is not going to change, and those businesses well positioned to benefit from the upside will thrive,” he says.

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Standard Bank SA is the largest operating entity of Standard Bank Group, Africa’s largest bank by assets. Standard Bank SA provides the full spectrum of financial services, with more than 720 branches and over 7 100 ATMs. Independent surveys of customer satisfaction consistently place Standard Bank at or near the top of their rankings. The personal and business banking unit offers banking and other financial services to individuals and small-to-medium enterprises. For further information, go to community.standardbank.co.za

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The Alfa Romeo Stelvio – More Than An SUV

The All-New Alfa Romeo Stelvio draws inspiration from the legendary mountain pass linking Italy to Switzerland, with 48 hairpins in quick succession.

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The All-New Alfa Romeo Stelvio draws inspiration from the legendary mountain pass linking Italy to Switzerland, with 48 hairpins in quick succession. The Stelvio pass is widely seen as one of the most beautiful and engaging roads on the planet.

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Enhance Your Entrepreneurial Flair With An Online Postgraduate Diploma From The University Of Pretoria

The Department of Business Management at the University of Pretoria, a leader in business management education, will be offering an Online Postgraduate Diploma in Entrepreneurship for the 2018 academic year with some seminars to enrich your action learning experience.

Dr Alex Antonites

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The Department of Business Management at the University of Pretoria, a leader in business management education, will be offering an Online Postgraduate Diploma in Entrepreneurship for the 2018 academic year with some seminars to enrich your action learning experience.

The programme content focuses on the start-up processes, creativity and opportunity recognition, business planning and marketing as well as financial management. Furthermore, the programme emphasises entrepreneurial growth and small business policy development with relevance to the enabling environment.

Who should enrol?

The programme is designed for pre-, nascent and start-up entrepreneurs who want to attain an advanced degree in entrepreneurship. It is also intended for individuals who work in an entrepreneurial environment and are involved with small business policy development. Although many students in the programme have academic credentials in entrepreneurship or business management, the programme is also appropriate if your education and/or experience may be in other disciplines (e.g. engineering or medicine).

Admission requirements

A relevant bachelor’s degree.

Related: This Enterprises UP Expert Explains Why Start-Ups Really Fail

Additional programme information

The duration of the course is one year. The language of tuition is English and the course will be presented in two blocks by means of the blended learning method (70% online and 30% contact sessions). Students need continuous access to the internet to complete the course.

Course Contents

Overview of modules for Block A

  • Ideation-to-market: Starting up
  • International Business Venturing
  • Venturing Strategy Building (Part 1)

Overview of modules for Block B

  • Entrepreneurial Marketing
  • Entrepreneurial Supply Chain Management
  • Entrepreneurial Finance
  • Venturing Strategy Building (Part 2)

Click here for more information.

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Win A Business Makeover With Retail Capital To The Value Of R250 000

Retail Capital is giving SMEs an opportunity to win a makeover to build their brand with an investment of R250,000.

Retail Capital

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Retail Capital is giving SMEs an opportunity to win a makeover to build their brand with an investment of R250,000. During the summer campaign, SMEs are encouraged to share the vision of how they would like to see their business grow, and led by a team of experts, Retail Capital will work with the winning SME to help make their vision come true.

While South Africa’s economy is not faring well, Retail Capital CEO Karl Westvig remains optimistic about the country’s retail and hospitality sectors. “We are seeing some green shoots, with an increase in turnover in these sectors – starting from the end of September. Economic conditions remain very tough, but businesses seem to be trading well into October and we’re hoping this continues into the festive season trading.”

According to recent statistics from Statistics South Africa (Stats SA), South Africa’s retail sales rose by 5.5% year-on-year in August 2017, following a downwardly revised 1.6% gain in the previous month and above market expectations of 2.3%. It is the biggest gain in retail trade since August of 2012.

Related: How To Raise Working Capital Finance

“I do believe that these sectors will see an improvement during the summer season. But, key to this will be for small business owners to ensure that they have the right amount of stock, adequate cash flow, as well as other systems in place to meet the ever-changing needs of customers,” says Westvig.

For many small businesses, however, continually adapting to market changes requires cash injections that they don’t often have.

The prize includes the following:

  • Business plan/consulting
  • Marketing strategy
  • Design and branding
  • Website and social Media and,
  • R50k capital to gear your business.

Westvig explains that the summer campaign tagline ‘Your Vision. Our Belief’ really speaks to why Retail Capital first opened its doors. “Our goal is to see the potential of small businesses and to work with them in making these become a reality.”

He adds that the idea is not to simply help one business during the campaign either. Westvig points out that one of the biggest challenges that small businesses face in the sluggish economy is enough foot traffic through their doors. “Generally, the main hurdle in creating brand awareness and projecting credibility of their establishments boils down to establishing a strong online presence.”

“One of the first ways that South Africans identify a business or service provider that they want to work with is over social media – even in a country where the digital divide has traditionally separated the technological haves from the have-nots,” he says.

He explains that companies that don’t have a social media presence are running the risk of being overlooked entirely. “They may attract customers in their own community with signage or word of mouth, but to grow a business, they need to expand their reach – and that’s where social media comes in.”

But, the reality is that resource and time constraints mean that for many SMEs, social media is not prioritised. “Unfortunately for the average small business owner, they don’t have the time or expertise to get connected.”

Understanding the importance of having an online presence, Retail Capital has also committed to developing the digital presence of all campaign entrants. This would include setting up each entrant’s digital presence on platforms such as Google, Facebook, Twitter, Tripadvisor, Zomato and any others that may be relevant to their specific market or industry.

“As a partner to many SMEs in South Africa, we are continually looking at new and innovative ways to help provide them with the much-needed support in order for them to realise their visions. SMEs need to be supported with initiatives like targeted education and training, supportive legislation, and funding opportunities that collectively help them grow our national economy,” says Westvig.

Related: 6 Great Tips For A Successful Shark Tank Pitch

Who we are and what we do:

“More than R1.25 billion has been extended to a range of businesses including food trucks, hair salons, restaurants, spas and franchised retail stores. Many of these businesses have not been able to raise funding in any other way, other than to go to unscrupulous lenders,”says Karl Westvig, the CEO Retail Capital, a company that provides working capital with the help of innovative lending technology.

“We have also estimated that for every R160 000 we lend, we create a new job. This means that 625 jobs have been created purely by enabling small businesses to get the funding they need for working capital requirements or expansion opportunities.”

Retail Capital’s system, which enables it to advance funding to small businesses, based on real time information on credit card transactions, is providing a new funding alternative to entrepreneurs who have previously been turned away by banks. Because it is able to get actual sales information, it can approve funding immediately, and allow for flexible repayment options based on sales cycles of the particular businesses it is funding.

“This creates significant opportunity for small business owners to focus on their business and grow volumes or look for expansion opportunities rather than spend their time frantically trying to repay debt or keep the business alive after debt repayments have eaten away at any cash reserves they might have had.”

Retail Capital funding is repaid by it taking a percentage of a business’s recorded credit or debit card sales, with repayments fluctuating in line with their business cycle. This has the effect of ensuring that it isn’t overburdened with debt.

“In the past six years since starting the business, small businesses have had the benefit of R1 billion in funding they would have been unable to get through traditional channels,”says Westvig.

Against the backdrop of recessionary conditions in South Africa, Retail Capital’s client information reveals growth in informal sector turnover across a number of industries.

“We believe that growth in the informal sector is outstripping that of the formal sector,”says Westvig.

As a large proportion of the businesses it funds are women- and black-owned, there is evidence that entrepreneurs who have previously been excluded from access to finance are now enjoying success now that their access to finance problem has been solved.

Win A Business Makeover with Retail Capital

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