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Are You Suited to Entrepreneurship

Is Entrepreneurship Dying In SA

No says Darlene Menzies – but we have some lessons to learn.

Darlene Menzies

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It is critical for any economy to maintain a positive level of growth.

A key factor in this growth are the efforts made by entrepreneurs who are willing to take the plunge and risk investing their time, money and skills in starting small businesses.

SMEs are in fact the building blocks of the economy, with a surprisingly high number of SMEs providing employment in big economies across the globe – for example China sees 84% of employees in SMEs, Germany 62.7%, Japan 69%, and France at 63.9%.

Related: Sage Supports Government’s Call To Grow SA Entrepreneurship

What is the situation elsewhere?

Darlene Menzies, established entrepreneur and CEO of SMEasy and finfind, recently visited Kenya to contribute her knowledge and experience at Dot Finance Africa. While there, Menzies made some keen observations regarding Kenyan vs South African entrepreneurship.

“Everyone you meet in Kenya is an entrepreneur and has some kind of business interest. People working full time in corporates have their own businesses on the side or are involved in investing in small business ventures if they can’t give their time. They don’t see full time employment as a security as the labor laws aren’t as strictly regulated as they are in SA – so you can find yourself out of work anytime.

“There is a genuine spirit of entrepreneurship there, it’s the norm; if you don’t have a business of your own you’re the exception not the rule. It’s so different to SA where only nine in 100 people start their own businesses. Here having your own business is typically perceived as being second best to being employed…generally people feel that only if they can’t find a job or if they lose their job should they consider starting a business.”

Where are all the South African entrepreneurs?

According to a recent article in The Times, titled ‘Where have all our entrepreneurs gone?’ The Global Entrepreneur Monitor South Africa report, released in May 2016, states that the number of South Africans interested in starting a business has halved since 2010. The decline has been particularly sharp among black people and women. 

“The question we must ask is why there is this decline and what can we do to address the issue?” says Menzies.

Related: The Era Of Entrepreneurship

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Mindset

She believes “we need a massive mind-set change” while the article states that government policy is a ‘culprit’, access to finance and lack of training and education are also significant contributors to the problem.

While Menzies agrees that the realities of red tape experienced by South Africans can hinder our entrepreneurial growth she maintains that the same is in fact experienced by the Kenyans for example. The only difference is that the Kenyans are not deterred by these hindrances and actively seek solutions. 

Access to finance

The access to finance problem has a solution for example here in SA. Services such as finfind, a revolutionary, free one-stop solution for access to finance for small business can greatly assist.

Another tool to help entrepreneurs starting a new business is SMEasy, the easy-to-use, online business management and accounting software that is specifically designed for entrepreneurs entering the small business market.

With this in mind, a significantly positive observation from the report is that ‘South African entrepreneurs are more innovative than their counterparts in the rest of Africa and have a better global orientation with at least a quarter of revenue coming from global sales.’ So there is definitely hope in restoring South Africans commitment to starting small businesses.

“While the figures are down from the previous year, it’s definitely not the end of the road for entrepreneurship in SA” says Menzies.

Take the risk

“South Africa has moved forward in leaps and bounds over the last two decades and in order to maintain this growth we need to focus on giving our talented entrepreneurs the proper policies, access to finance, education and training, ensuring we can continue to grow. Also, encourage your children to start businesses, teach them to risk and be courageous, to persevere through hardship.

Related: Eva Longoria And Social Entrepreneurship

“Teach them that failure is a normal part of life and should be embraced not avoided. Foster a mentality of overcoming and breaking through.  Help raise future entrepreneurs – the true builders of our economy “concludes Menzies.

Darlene Menziesis Chief Executive Officer – Finfind. The World Economic Forum named Darlene Menzies one of six Top Female Tech Breakthrough Entrepreneurs in Africa for 2017. She is a technology innovator and serial entrepreneur with 15 years’ corporate IT experience with ABSA Bank and ICT outsource giant BCX. Since leaving corporate employment in 2001, she has established several successful technology businesses and has firsthand experience in what it takes to start and grow a successful enterprise. She is a public speaker, a media spokesperson and recognised expert on the SME sector.

Are You Suited to Entrepreneurship

Build Solid Back-Room Basics For Business Success

What do South African entrepreneurs really know about what goes on behind the scenes building of businesses?

Marc Wachsberger

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South Africa has a vibrant start-up culture with great ideas starting out with a bang, but closing down with a whimper because entrepreneurs picture the glory at the destination, but not the nitty gritty of the journey to get there.

Be smart about scale

When I started out, I literally did everything myself. I negotiated and signed leases, I arranged the furnishing for our apartments and managed the interior décor process. When guests started using our apartments, I signed them in at reception, and then carried their bags.

At that stage, there was no money in my business to pay for attorneys, interior designers and decorators and there certainly wasn’t enough money for porters.

However, when we got to 70 apartments, it didn’t make sense for me to be a porter any longer, so I hired someone to do that job, explaining clearly what I expected of him. Before I did that, though, I spent time designing incentives for him so that he would be more affordable for me, and so that he could earn as much money as possible.

Related: Training Is A Two-Way Trick

Know your talents – and your limitations

There are certain things I’m really good at, but I know without a doubt that sales isn’t one of them – and without sales, you don’t have a business. I couldn’t afford a top-flight salesperson, but I knew that I could attract the right talent with the right business model. I set some high targets for Pamela Niemand, but offered her one third of the business if she met them. We both won: she earned a share in a successful, trend-setting business, and my trend-setting business became successful!

Use your skills – but know when to hand over

My background in corporate finance meant that I had all the accounting skills I needed when we first started out, but I knew that the time would come when I would need someone focused on that side of the business full time. Doing it all myself first meant that I could brief my first full-time accountant clearly and with a deep understanding of what would be required – and that I could help that person find and fix any challenges based on my experience.

In summary, my simple advice to anyone starting out would be to bootstrap your business yourself without investors or staff for as long as you can, but don’t over-extend yourself. Know when to delegate tasks away so that you can focus on what you’re really good at – but don’t do it before you have a solid understanding of what’s required. Know what you’ll never be able to do, and bring in that resource from the beginning – but do it based on performance-based incentives, so that your fledgling business doesn’t lose out if your early hires don’t perform.

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Are You Suited to Entrepreneurship

The Myth About The Relationship Between Entrepreneurs And Taking Risks

This is the true relationship between entrepreneurs and the apparent illusion of risk.

Lisa Illingworth

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“I can’t be an entrepreneur or start a business. I don’t have the appetite for risk.” This line is spoken regularly to brave few that leave the perceived safety of a job, take the plunge and venture into the unknown world of being an entrepreneur. However, there is a gross misunderstanding in the appetite for risk that entrepreneurs are believed to have innately inside of them.

The little-known truth is that the majority of entrepreneurs don’t like taking risks and according to Luca Rigotti and Mathew Ryan in their paper that explores a model for quantifying risk and its translation into enterprising action, the results were very interesting.

Risk is explained by these theorists as taking action where the outcomes are unpredictable as well the factors leading to that outcome are unknown. One of the theorists in this area, Saraswati, who coined the term “tolerance for ambiguity” has a more accurate description of what the outside world deems taking a risk.

In simple terms, entrepreneurs don’t go head-first into the shark infested water because they like the idea of danger and potentially being eaten alive; or the thrill of being able to say that they survived whilst others perished in a pool of maimed flesh. They carefully calculate that the sharks have been fed recently, some of the sharks are ragged tooth sharks that whilst looking like they are set to devour a human being, are actually incapable of opening their jaws wide enough to bite. For those sharks that still have space or who smell blood and can’t resist the urge to kill, the entrepreneur has a cage set up that he can retreat into quickly and a knife with which to protect himself.

Related: 5 Infamous Risks Every Entrepreneur Must Face

Tolerance for ambiguity is the careful evaluation of what is known at the moment where a decision must be made and an open-mindedness for what is not known. This, coupled with the agility to change course when new information is presented, has earned the label of high risk appetite. The appetite is not for the risk, but it is the ability to move down a path, when all the information is not known.

I likened it to a person moving around in the dark holding a candle. The candle casts a light that illuminates a limited parameter around the person holding the candle. What is beyond the light that the candle casts, is unknown and potentially a risk. But as the person moves forward, the light reveals what was unknown and in the shadows. As the light reveals new information and new challenges added to what they have already learnt, the person can make better informed decisions. The tolerance is in not knowing what lies in the shadows yet to be illuminated by the candle and then the confidence in his or her own ability to act on what new information is discovered.

None of this behaviour is risky or irresponsible. There is careful consideration for what is known and a tolerance for what is unknown. And once there is more information available, a calculated next step is taken and more information is assimilated into what is now known. This is the true relationship between entrepreneurs and the apparent illusion of risk.

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Are You Suited to Entrepreneurship

7 Skills Every Entrepreneur Needs To Adopt Today

Want to know what skills can help you build confidence and your business? Here are seven…

Nicholas Bell

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For some people, becoming an entrepreneur is as easy as stepping off a bus. They have a big idea, they bring it to life, they hire employees and the next thing they are in a building smothered in branding and living the business dream. For others, the idea and the passion are there but they are unsure as to how they can make these into a sustainable reality. Entrepreneurial spirit isn’t like instant coffee – you don’t add ideas and suddenly get all the skills you need to thrive.

Want to know what skills can help you build confidence and your business? Here are seven…

1. Believable vision

Make sure that your vision is believable and achievable. It has to live in the realms of possibility, not as a blue-sky idea that looks good on paper but wouldn’t work in reality. You need to be able to live this vision so make it realistic and achievable. This will not only keep you on track, but your employees as well.

2. Be inclusive

You need to ensure that every person who works with you feels as if they are part of your vision and understand it. They need to relate to where the business is going and how it plans to get there. Many leaders don’t understand why employees are not engaged with their business and it’s because many of them don’t actually understand what the business does.

Related: 4 Ways To Improve Your Budgeting Skills

3. Communication is critical

If you don’t have fantastic communication skills, then now is the time to hone them. When it comes to building employee morale, commitment and engagement, nothing works as effectively as constant communication. The same applies to client relationships. You need to repeat the vision and ethos of the company at every opportunity and you need to be part of the team that does this communication.

4. Be visible and transparent

You are communicating, now you need to make that communication genuine by being both open and clear. People respond incredibly well to transparency. They feel as if they are part of something that recognises their value and contribution and it fosters a more inclusive company culture. Often toxic cultures come about thanks to a lack of communication and visibility. People know when things are being kept secret and react negatively to it, regardless of whether they’re an employee, a customer or a manager.

5. Be practical

You aren’t going to build an empire in a fortnight so focus on a realistic and practical business strategy that has clear benchmarks and even clearer goals. Communicate these with the company and keep everybody on the same page. Practical and achievable means long-term success.

Related: Crucial Skills You Need To Be An Entrepreneur

6. Build opportunities

As people become immersed in your company and part of its growth they will also need opportunities to grow. You need to tie their careers to the business and create opportunities for them.

7. Be human

It takes people to build a culture, a company and a future. It’s essential that you are human in your interactions and your treatment of others. The impact that a down to earth and authentic attitude can have on a company is extraordinary.

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