South Africa’s small business sector continues to grow, with the Global Entrepreneurship Monitor report for 2016/17 indicating that SMMEs now account for over 36% of the country’s GDP. Yet these numbers do not reveal the many challenges faced by local entrepreneurs, many of whom are unable to sustain their business operations due to limited support and countless administrative hassles.
Many entrepreneurs also suffer as a result of reduced opportunities for collaboration and networking, with many working from home or out of small offices that leave them with little exposure to other like-minded business owners, whilst their larger counterparts are able to build networks and push the boundaries of innovation by tapping into a wider spectrum of human capita.
Entrepreneurs have been largely left to fend for themselves, leaving them at an obvious disadvantage in the marketplace.Yet, with the recent emergence of co-working spaces, this pattern is slowly starting to shift, with small business owners now beginning to band together in the absence of appropriate support from those able to give it.
Why you need collaborative spaces
Not only do these collaborative spaces expose entrepreneurs to others facing similar challenges, but they also facilitate networking opportunities and much needed interpersonal interaction without a hefty price tag. In these 21st century workspaces, entrepreneurs are able to feed off one another’s energy, discuss and find solutions to administrative challenges and share resources so as to preserve that all-important cash flow.
Some co-working spaces also host regular presentations and events attended by industry luminaries, enabling business owners to up their expertise and connect with relevant big players in their respective fields.
Could this new way of working be the answer for the South African economy, which relies heavily on SMEs to sustain its growth? Sadly, the massive administrative and psychological challenges faced by small business owners are unlikely to be completely overcome without the necessary investment from government and the private sector. Inevitably, businesses need both money and time to survive and it is usually only the former that frees up the latter.
Co-working spaces offer a lifeline to new business
Nonetheless, there is certainly an entrepreneurial case to be made for the co-working space. While it might not be a complete entrepreneurial elixir, it does nonetheless offer up a lifeline for new businesses, affording them access to the people and networks that can elevate emerging enterprises from good to great.
That being said, not all co-working spaces are created equal and it is important that entrepreneurs seek out locations that best suit their businesses and working styles. Here are a few key things to look out for when embarking on the search for the perfect space:
Search for synchronicities
It is not simply enough to be around other entrepreneurs – if you want your business to thrive rather than simply survive, you will need to find a space populated with others in similar fields.
Naturally, you do not want to be sitting across from your biggest industry rival, but it is not going to do you much good if you are a marketing guru surrounded by a group of architects. So look for places typically frequented by those with complementary skills – it is the perfect kick-off point for great network building.
Do your research
Everyone has different working styles, so it is important that you find a co-working space that best suits yours. A loud, boisterous environment might be invigorating for some, while others prefer a quieter, more laid-back tone. By setting up camp in a space that facilitates productivity and energy, you’ll be far better placed to succeed.
Buy into the right benefits
Co-working spaces come in many shapes, sizes and price ranges. Ensure that you pick one that offers you exactly what you need without breaking the bank. While you’ll want your space to be adaptable in the event of growth, you also don’t want to have to invest in more square meterage than entirely necessary. By all means think big, but also preserve your bottom line for the time being.
You’ll also want to look into the other perks offered by your local co-working spaces. Many offer secretarial services, administrative assistance and other similar amenities, which are like gold dust for entrepreneurs who’ve started up their operations based on skills rather than savvy.
For other business owners, networking events and seminars might be exactly what’s needed to fast track your growth trajectory, so carefully weigh up the benefits and costs based upon your specific pain points and potential areas for improvement.
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You Can Motivate Your Employees Without Creating A Hyper-Competitive Culture
Creating work atmospheres where people choose to engage and do their best work for the right reasons will lead to sustainable success.
Recently, major companies – from the flashiest tech startups to centuries-old legacy banks — have made unwanted headlines due to unrealistic expectations and growth-at-all-costs behaviour.
Employees expressed concern that Uber favoured “high performers” over a safe environment for its female employees, as detailed by a former employee’s viral blog post; Zenefits created software to help its employees cheat on state online broker license courses to sell insurance illegally, and hired people with little experience in the highly regulated insurance industry. Also among companies reluctantly in the news recently, Amazon reportedly condoned workaholic behaviour to achieve its ambitions.
These companies exemplify company cultures that seem to focus only on results, leading to unintended consequences. Unfortunately, this corporate perspective is common to many Silicon Valley start-ups, as well as established companies.
In attempting to accomplish innovative feats, they ignore fundamental culture practices that will benefit every company, regardless of whether they’ve been around 30 months or 30 years and what metrics they’re trying to hit. Focusing on results without creating work atmospheres where people choose to engage and do their best work for the right reasons will lead to behaviours that put current and future business results at risk.
What can be done to avoid growth-at-all costs environments that continue to be an issue for many organisations? It begins with leadership.
How leadership can improve
Many leaders scale the ranks because they were effective doers – they got the results they wanted through hard work. These leaders often don’t understand that when they assume a new role as manager of a team, their purpose in the company shifts as well. Their primary responsibility is to influence the work of others rather than do the work themselves.
Often, inexperienced or poor leaders can be micromanagers who unintentionally put unhealthy pressure on team members, rather than taking a step back and creating an environment in which people can do their best work.
Connecting to purpose
Leaders cannot force their employees to do something, but they can give their employees the choice to engage. The best motivator for true engagement is to help the employee connect with the overall purpose of the company, rather than driving performance through fear or pressure.
Is your company simply driving results for results’ sake? Now might be the time to connect the results to an end benefit for the customer and to share that greater purpose with your employees.
People aren’t lazy
Many leaders hold the misconception that people are inherently lazy and will slack off if highly competitive cultures aren’t cultivated or goals aren’t mandated. They believe that if people don’t have structure and steep quotas to reach, their natural tendency is to not produce.
The reality is people want to make a difference. People want to do great work and achieve what hasn’t been done before. If they feel their work is connected to a deeper purpose and the overall mission of the company, they will willingly spend more time on projects, rise to the occasion and hit targets, without undue pressure.
Recognising rather than penalising
Employees want to achieve great work, but they also want to be recognised for it when they do, rather than penalised if they don’t hit the mark. They want a culture that celebrates wins of individuals and teams instead of one that instills fear. A recent study conducted by my company found that of the six most common motivating factors that cause employees to produce great work, recognition is by far the number one factor.
We live in a competitive business world in which every company wants to go above and beyond the industry standard. Establishing aggressive goals and focusing on results is important; however, unless leadership works to create cultures where employees are motivated to do their best work for the right reasons, they may unintentionally reinforce unhealthy and unethical behaviour that puts the very business results they seek at risk.
This article was originally posted here on Entrepreneur.com.
How To Build Organisational Wealth Through Increased Efficiency
Using the right business systems can allow your staff to become more efficient through best-practices and better process flows.
As your business grows, the demands of running and managing all its parts increase. Fortunately, technology can help you standardise, streamline and adapt your operations in order to meet these increased demands. Let’s have a look at some of the ways in which you can increase efficiency to build your organisational wealth.
Integrated business units
It can be difficult to get a holistic view of what is going on in your business if information is floating between different departments and/or locations. Manually pulling data together can be very time consuming, causing delays and leaving greater room for human error.
By implementing an integrated business management solution, you can significantly increase efficiency among all your business units, allowing departments to easily share and access information. This real-time, inter-departmental integration allows you to get a birds-eye view of the performance of your business at the click of a button.
Business process automation
You can significantly save time by automating key business processes with an Enterprise Resource Planning (ERP) system. Accounting, for example, is much easier when details of all transactions are quickly and automatically shared between departments (no need to manually upload or download information).
Automation will enable your teams to respond to customer enquiries with alacrity and maintain optimal stock levels. Through automatic alerts and responses, relevant managers will be notified when stock reaches predetermined minimum levels. When these levels are reached, purchase orders for replenishment stock are automatically generated.
Automation also enforces consistency in your business’s day to day operations by following local and industry best-practices built into the system.
Synchronised customer data
The success of any small to medium sized business depends on getting new customers and providing excellent products and services to existing customers. Collating and sharing customer data across all departments is essential for effective customer service. SAP Business One, for example, provides the tools to track and manage the entire sales process, from initial contact and invoicing through to project management and after sales support – playing a pivotal role in customer retention management.
This complete view of past, present and prospective customers, along with historic purchases will help you to better understand your customers’ needs, behaviours and preferences. This will enable you to respond to clients effectively in order to boost satisfaction levels, increase sales, maximise profits and ultimately promote client retention. In addition, your marketing team can better plan campaigns based on insights from accurate data about prospective and current customers.
Instant access to information
You have to be able to plan properly to stay ahead of your competitors. Having access to up to date, relevant and accurate business data removes the guesswork and empowers employees to make informed business decisions. With an integrated business management system, you will be able to better manage your cash flow and stock holding with a real-time overview of current stock levels, orders in process and outstanding payments. This, in turn, will save time and allow you to better manage your procurement process and help build organisational wealth.
Who doesn’t like it when a plan comes together and things are working well? Working smarter and better – not harder – is what increased efficiency is about. Your teams will share the benefits of increased efficiency as you grow your organisational wealth together.
Mi Casa Es Su Casa: Achieving Positive Corporate Culture
How to achieve positive corporate culture in a group company.
According to management consultant Peter Drucker: ‘Culture eats strategy for breakfast’. And there’s a good chance of this being true, especially since studies have shown a direct correlation between a strong, positive organisational culture and a business’s financial success.
The importance of culture
Prof JL Heskett writes in his 2011 book, The Culture Cycle, that a positive culture can make as much as a 20-30% difference in company performance, when compared with “culturally unremarkable” opponents.
Culture is also a form of protection – strong competitors may be able to copy a strategy, but can’t duplicate a culture. Indeed, when things go wrong in the economy, public opinion, or even the strategy itself, a company’s culture can serve as a safeguard against these, because employees are faithful to it.
But… while culture is a remarkable thing, it’s difficult to define and attain.
The definition of culture
Company culture is traditionally interpreted from a corporate perspective, to include the principles, opinions, basic assumptions, and mindsets that are shared by a group. But these don’t hold any value if they aren’t entrenched in a company’s processes. This is why culture is also about action.
A company can’t create an intelligible culture without people who a) agree with its core values or b) are prepared to commit the time needed to.
Further, those employees who succeed in a company are generally those who most closely associate with the culture. If the principles and ideals of an organisation are shared, a strong culture can even support recruitment through self-selection.
As a result, leaders should spend as much time determining, collaborating on, and communicating culture as they do on strategy.
Culture in a group company
With different and broad-ranging companies working together, the goal of building and sustaining culture in a holding company can be trickier than in other organisations.
In cases like this, it’s critical for every company in the group to hold onto its own distinct culture, in ways that fit the greater business.
Simultaneously, the parent company should create a culture for all of the holding companies to attach to. Because, without a uniting mechanism, real integration can be difficult to accomplish.
The problem is: which culture is the priority? The composition of a group company evolves as it acquires and sells different companies, so a root culture is necessary; one that current and new subsidiary cultures can buy into.
Where to start
- Develop a set of principles, behaviours, and motivators for culture, and define what these mean practically.
- Write a positioning statement to share what the organisation stands for, both externally and internally. For example, Google’s is “organising the world’s information and making it universally accessible and useful”.
- Generate a motto that summarises your culture. Google’s is: “Don’t be evil.” In other words: do positive things for the world, even if it means letting go of some short-term wins.
- Communicate these messages widely and repeat them continuously. (As obvious as this sounds, many group companies make the mistake of not communicating values to subsidiaries.)
- Invest time and resources into smoothing out the cultural differences every time a new company is acquired. This is important because an implosion of combined cultures can cost valuable talent, customers, or worse.
- Teach the culture. Not just through induction programmes for new employees, but through ongoing events, reminders, collaborations, and other ways that remind people what the culture looks and feels like.
- Share and ingrain the group’s root culture, as an element of unity.
The heart of the matter?
Peter Drucker highlights a potent triad in organisational transformation: Strategy, capabilities, and culture. He says that all three must be created together, aligned, and designed to be supportive of one another. This is more complex in group companies but, with strong communication and high levels of collaboration, a clear and productive culture is possible.
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