Johannesburg. 24 November 2011. The South African Breweries Limited (SAB) Foundation and Endeavor South Africa, an affiliate of the premier emerging market entrepreneurship support network, has boosted the growth aspirations of 5black owned businesses through grant capital.
The SAB Foundation’s Grant Capital Investment was created to provide support and financial assistance to high-impact, black-owned businesses in partnership with Endeavor. It is one of a number of programmes the SAB Foundation has established to address the challenge of economic growth, job creation and innovation through entrepreneurship.
This cycle’s winners are Cynthia Mkhombo of Masana Hygiene services; LemaoMotaung, owner of Medupe Electrical Supplies; Sakhumzi Maqubela, owner of Sakhumzi Restaurant, Musa Maphongwane and Amos Mtsolongo, co-owners of Katsy Gaming Zone, as well as Nkhensani Nkosi of Stoned Cherrie.
This is the second group of entrepreneurs who have been awarded grant funding through the SAB Foundation and Endeavor partnership. Earlier in the year, 6 businesses were granted capital at the launch of the partnership in June.
The winners were announced during an awards ceremony in Johannesburg last night, each walking away with SAB Foundation Grant Capital Investment of up to R250 000 to assist with the expansion of their business.
The long-term vision underpinning the SAB Foundation’s programmes is therefore to ignite a culture of entrepreneurship in South Africa and focuses specifically on benefiting South Africa’s most vulnerable i.e. youth, women, people living in rural areas and people living with disabilities.
The local landscape
Research conducted by the SAB Foundation into entrepreneurship highlighted three critical points:
- SA lacks a critical mass of SMEs,
- SA has only a few high-profile entrepreneurial role models; and
- The country’s culture of innovation is largely untapped and un-commercialised.
“To address these challenges, the SAB Foundation aims to contribute to the development of entrepreneurship by supporting the growth of a critical mass of SMEs; developing entrepreneurial role models; and stimulating and rewarding innovation,” says Dr Vincent Maphai, SAB executive director, Corporate Affairs and Transformation.
Name: Cynthia Mkhombo
In 2004, Cynthia registered a contract cleaning company, set-up an office in Centurion and began submitting well-formulated proposals to corporations and government departments. A six-month contract with the Department of Land Affairs allowed her to employ the company’s first seven cleaners, four of which are still employed by Masana and have been promoted to supervisors. South African magazine, CEO, named Cynthia one of the most influential women in business and professional services and the Businesswomen’s Association selected her as a winner in its Entrepreneur category. She currently employs over 1 200 cleaners and has major clients including, the Gautrain, Woolworths stores and Growthpoint.
Name: Lemao Motaung
Business: Medupe Electrical Supplies (MES)
In 1999, Lemao launched MES, an electrical cable accessories distribution company, which also provides training for end users in the utilities industry. Beyond offering her clients competitive prices, Lemao has demonstrated superior value in two critical areas – her intricate knowledge of the electrical and cable supply industry and her strong focus on training. The utilities market in South Africa is undergoing significant expansion and change, which offers MES the opportunity to grow substantially in the coming years.
Name: Sakhumzi Maqubela
Sakhumzi’s, founded in 2001, is a restaurant located on the historical Vilakazi street, Soweto. It provides tourists and locals with an authentic, local township experience that includes food, history and a warm environment.. He has maintained an ‘on-the-ground’ presence in the business to ensure the daily operations of the restaurant run efficiently and has been able to garner the loyalty of both local Sowetans and outsiders alike. Sakhumzi’s vision is to be the choice destination of all visitors to Soweto.
Name: Musa Maphongwane and Amos Mtsolongo
Business: Katsy Gaming Zone
Katsy Gaming Zone aims to make the video gaming industry more accessible and affordable to children living in South Africa’s townships. The business is a container-based digital gaming franchise outlet that provides safe, educational entertainment through the latest gaming technology (PlayStation and Xbox) to children for as little as R1. The business also provides services such as internet access, game rentals, CD scratch removal and computer/console repairs. Musa has more than 10 years of experience in the computer industry and Amos is a qualified electrical engineer and project manager.
Name: Nkhensani Nkosi
Business: Stoned Cherrie
Stoned Cherrie is a brand of freedom, embodying the afro-urban culture of the “new South Africa.” Stoned Cherrie is recognized as a sophisticated, sexy, street-wise label that, while reminiscent of tribal Africa, is utterly relevant in style to fashion-lovers around the globe. Founded in 2000 by Nkhensani Nkosi, the brand promotes a lifestyle of freedom, originality, and authenticity and will manifest this vision in lifestyle products from apparel to shoes to home décor to bath & body and beyond. It’s Major Milestones for the company include creating ranges for Foschini and Woolworths, as well as showing at New York Fashion Week.
Top Sectors For SMEs In 2019
“As such, SMEs in the construction, communications and electrical fields are all likely to benefit from supply and sub-contracting agreements over the coming years.”
While the South African economy has been underperforming for a number of years, the first positive signs of turnaround started to become visible by the second quarter of 2018, and by the end of the third quarter, data supplied by Statistics South Africa showed that the economy had indeed grown by 2.2 percent, compared to the previous quarter. This uptick is expected to have a positive effect on business confidence in 2019.
This is according to Jeremy Lang, regional general manager at Business Partners Limited (BUSINESS/PARTNERS), who says that certain business sectors have already seen an increase in opportunities for small businesses and start-ups.
“While these sectors will not be without challenges, the following four industries are likely to offer the best opportunities for small and medium enterprise (SME) owners to grow their enterprises in the coming year.”
The World Travel and Tourism report 2018, revealed that the direct contribution of the travel and tourism sector to South Africa’s GDP has been projected to rise from R136bn in 2016 to R197.9bn by 2028 – set to make up a total of 3.3 percent of the country’s total GDP, says Lang.
“Although this sector experienced some setbacks in 2018, such as the drought in the Western Cape and stricter visa regulations for children entering the country, both the water restrictions and visa regulations have been relaxed and the sector is once again poised for growth,” he says.
Statistics South Africa has credited this industry with being the biggest driver of growth in the country’s GDP, having expanded by 7.5 percent in September 2018, says Lang. “To bolster this, Government has made a concerted effort to stimulate small business growth in this area with initiatives such as the Black Industrialist Programme and the SA Automotive Masterplan.”
He adds that businesses in the manufacturing sphere could therefore likely see significant opportunities in the form of outsourcing contracts and new partnerships with large corporates.
“The debate around land expropriation has occupied most of the discussions surrounding the agricultural sector in 2018, with some questioning growth prospects of this sector. However, this industry has a lot of growth ahead of it, as demonstrated by its 6.5 percent growth over the last three months of 2018,” explains Lang.
“Further to this, the industry is also already taking significant advantage of seven climatic regions in South Africa, with the export of a wide variety of high quality fruit and vegetables increasing substantially,” he points out. The recent outbreak of foot and mouth disease that has resulted in the suspension of the country’s FMD-free status will however significantly impact meat exporters.
In terms of opportunities for SMEs, he says that these may most likely be found in the rural and underdeveloped regions, where the need for resources like efficient transport, state-of-the-art cold storage, better irrigation and private power generation will be key to making agriculture projects more productive and competitive in the export market.
Data and information technology
Connectivity and information technology infrastructure are both crucial to business and employment growth in South Africa, says Lang.
“With many municipalities and the Western Cape government committing to providing all of its residents with free data as part of a plan to expand public Wi-Fi network access, it is clear that this is also becoming a high priority on a state level.”
It has also been reported that South Africa is awaiting the arrival of three international data centres, and large players in the communications sphere, including Vodacom, Telkom and Vumatel, are making huge strides in drastically growing the country’s fibre optic backbone, he adds. “As such, SMEs in the construction, communications and electrical fields are all likely to benefit from supply and sub-contracting agreements over the coming years.”
In conclusion, Lang says that as South Africa’s economic growth has started to turn around, business owners should keep their ears to the ground as 2019 is highly likely to be a year of opportunity.
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SME Insurance Checklist For New Year
Malesela Maupa, Head of Product and Insurer Relationships at FNB Insurance Brokers, advises SMEs to consider the following factors when reviewing their policies.
Business owners who are planning for the year ahead should not overlook the importance of reviewing their insurance policies to ensure they are adequately covered against insurable risks.
Malesela Maupa, Head of Product and Insurer Relationships at FNB Insurance Brokers says, every year businesses face unique challenges ranging from credit and market risks, technological disruptions, compliance, operational and regulatory risks, amongst others. As a matter of precaution, insurance policies should at least be reviewed or updated once a year.
He advises SMEs to consider the following factors when reviewing their policies:
- Employee movements – if there are any employees who have left or joined the company, ensure that your policy is updated accordingly.
This type of cover normally depends on the role and contribution of the employee to the business. For instance, directors may be covered for Key Person Insurance and Directors & Officers Liability insurance.
- Protest Actions – this year is the national election year and leading up to elections we can expect to see an increase in the frequency and severity of protest actions, riots and strikes. Thus, it is essential to ensure that adequate special risks cover is in place from the South African Special Risks Insurance Association (SASRIA).
SASRIA provides cover to both individuals and businesses against special risks like civil commotion, public disorder, strikes, riots and terrorism at affordable premiums.
- Cyber risks – it is essential to communicate with your insurer or broker and find out if there are any new risks that your business should be protected against. Cyber incidents continue to be a major risk for businesses especially in the SME sector. Over the last couple of years there has been a major increase in the number of reported cyber incidences.
More businesses are now facing increased cyber threats due to their increased dependency on technology, relating to their internal and customer data being compromised by fraudsters. It is therefore essential to have some form of cyber risk insurance cover and/or enhancement of data security protocols.
- Regulatory changes – every year there are a number of regulatory changes that impact businesses directly or indirectly, which may result in fines and penalties for non-compliance.
- Natural catastrophes – the increase in the frequency and severity of extreme weather conditions, coupled with intensifying natural catastrophes will continue to have a significant impact on businesses.
Businesses should ensure they are adequately protected against these risks to avoid incurring sever financial losses.
- Business changes – should a business consider moving to a new location, purchasing new premises or venture into new business activities, these types of changes could have a major impact on its risks profile. As a result, the policy needs to be updated accordingly.
- New and Enhanced products – An innovative culture has taken over the insurance industry and ever so often we see the introduction of new products or the enhancement of existing products. Get in touch with you broker to advise you on any new products that might add value to your existing insurance portfolio.
“Reviewing your policy regularly gives you peace of mind knowing that you can focus on running your business effectively, without worrying about unforeseen risks,” concludes Maupa.
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