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Breaking Down Borders – Top Considerations For SMEs Expanding Into Africa

In light of Africa Day on the 25th of May, more South African small and medium enterprise (SME) owners should be encouraged to look at how they could expand their operations into the rest of the continent.

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In light of Africa Day on the 25th of May, more South African small and medium enterprise (SME) owners should be encouraged to look at how they could expand their operations into the rest of the continent.

This is according to Mark Paper, Chief Operating Officer at Business Partners International (BUSINESS/PARTNERS), who says that Africa has for long been regarded as a region with untapped economic opportunity. “The African Development Bank1 reports that the economic growth in Africa is set to accelerate to 4.1% over the course of 2018 and 2019, which can potentially yield benefits for SMEs.”

Paper points out that entrepreneurs should however firstly consider that each of Africa’s 54 countries represents a unique market with differing challenges and intricacies for doing business.

“The various economies, laws, languages and cultures need to be thoroughly assessed as part of the entrepreneur’s expansion plan, which should be structured around the target region’s strengths, weaknesses, potential opportunities and threats.”

Related: Expansion Funding Options For Your Growing Business

He says that once the enterprise is ready to start operations in a specific region, the entrepreneur needs to ensure that the regulatory requirements of the region are adhered to.  “It is crucial to conduct due diligence and understand all relevant regulations. Most of the companies that make mistakes during this phase find themselves facing massive fines or potentially devastating legal action further down the line.”

According to Paper, the information that should be at the entrepreneur’s fingertips include the required permits, business and property registration processes, credit requirements, tax legislation, labour market regulations, and local content requirements.

He adds that the entrepreneur should also know which laws are in place to protect foreign investors. “Developing robust contracts and using local attorneys to ensure that contracts can be enforced under local laws is therefore imperative.”

Next, Paper says that it is essential to have a strong local presence, knowledge of the local market, and an understanding of customer expectations. “Employing workers from the region can potentially be one of the best ways to support the company’s operations. It will not only benefit the business and its reputation, but the local economy too.”

He notes that finding the right employees, creating cohesive teams and implementing skills training within the organisation relies heavily on understanding the culture of the region, and being able to effectively work around the potential language barriers. “It could help to consult local human resources firms and hiring agencies with strong track records in the region.”

Another point for entrepreneurs to consider, is whether the country has reliable electricity supply, says Paper.

“Electricity supply continues to be a challenge in various countries, and there are many regions that only receive electricity from their national power grids for a few hours per day. Where necessary, the entrepreneur will need to budget for the installation of generators, or even consider signing contracts with mobile fast-track power suppliers who can operate and maintain their own generators on the business’s property.”

Related: Thinking Of Cross-Border Expansion? Consider This First

While entrepreneurs need to consider a number of aspects when expanding across borders, he adds that the rewards for getting it correct are significant, and that the perceived challenges should not deter entrepreneurs from taking the leap, rather serving as a reminder of the amount of research that should be conducted beforehand.”

“Africa is open for business. All it takes is enough drive, passion and perseverance to tap into its growing markets,” Paper concludes.

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

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Investing In Women Key To SA Socio-Economic Development

Investment in women’s empowerment delivers long-term socio-economic returns, says Novartis. Women’s networks and mentorship engagements can help unlock personal and career success.

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Empowering women has long-term positive socio-economic impacts, making women’s empowerment, career development and mentorship programmes a compelling narrative for companies.

This is according to Sibonile Dube, Head of Communications & Public Affairs at Novartis South Africa and a mentor at Phakama Women’s Academy. Marking the start of national Women’s Month, Dube cites Bain & Company research into how and why the career paths of South African women and men differ, which found that in 2017, 31% of South African companies had no female representation in senior leadership roles. The research noted that the Businesswomen’s Association of South Africa (BWASA) census on women in leadership indicated that 22% of board directors were women, but only 7% were executive directors. Only 10% of South African CEOs and only 2.2% of JSE-listed company CEOs were women.

“Considering that recent research by MCSI concluded gender diversity on the board has significant benefits for both productivity and profits, South African enterprises need to become more proactive about supporting women’s empowerment in the workplace,” says Dube. But Dube adds that while formalised empowerment and mentorship programmes are important, South African women hold some of the keys to helping both themselves and other women unlock success.

She outlines three key factors that hold women back from corporate and entrepreneurial success, and how these challenges can be overcome:

Lack of confidence

A key factor holding women back from achieving their true potential in the workplace – and as entrepreneurs – is fear and a lack of confidence, says Dube. “As women, we often undersell ourselves – we underestimate our potential, our power and the amount of influence that we have. In contrast, men are typically quite confident in themselves and their capabilities,” says Dube.

The Bain & Company survey of over 1000 women found an apparent loss of confidence amongst women in junior- and middle-management positions that they could rise to the top. At this level, some respondents noted political imbalances that were difficult to navigate; while their male colleagues had access to a sponsor or mentor (normally of the same sex and colour) to help navigate these issues.

Dube believes women need to become more proactive about empowering themselves, equipping themselves with a broad range of skills, and actively working on building their self-awareness and self- esteem. “Building skills goes beyond developing academic or technical expertise – we need to work on our relationship skills and communication skills, because human relations are crucial for success in a setting where you are looking for influence and significance.”

“Dealing with fear and lack of confidence is important, because this enables us to have relevance and contribute more meaningfully to in the workplace and in business,” says Dube.

Related: 13 Female Entrepreneurs Rising To The Top In SA

Lack of support networks

More than women, men generally back one another be it in corporate or in business deals and this has supported their career success a lot, says Dube. “Having a network is important – it is through these networks that opportunities are shared and support is gained. Having a strong network of people that back your career becomes an effective reference point especially in times of challenges. And through these networks, people are also able to find mentors.”

Dube believes mentorship is a crucial component of career success, offering both mentor and mentee opportunities to learn and grow. “We need more mentorship. With mentorship, training and coaching, women can actually pull out some of the strengths they possess which they may not be aware of. One is challenged and pushed to aim higher,” says Dube.

Bain & Company research found that sponsorship of individuals, especially at the mid-management level, ensures that contributions and performance are recognised and attributable to the individual. Often women, particularly in middle management, feel marginalised, ignored or simply worn down by trying to get their efforts recognised.

Dube, who mentors a number of women, says mentorship can be formalised through a corporate career development programme, but can also extend to informal and virtual mentor-mentee relationships. “You can be guided by simply reading the books, reading articles and watching videos and talks of inspirational leaders anywhere in the world on social media,” says Dube. Dube points out that good mentorship can be a mutually beneficial in the exchange of ideas and meeting of minds. “In an effective mentor-mentee relationship, reverse mentorship takes place. In an era where we now have four generations in the workplace, the digital and tech savvy younger generation have a lot to offer to the rest,” says Dube.

Poor Health and Wellbeing

In order to cope and remain competitive in the workplace, women have to ensure they take care of their health and maintain some resilience especially when pressure mounts. Recently, there have been a lot of conversations about mental health in South Africa. According to the World Health Organization (WHO), gender is a critical determinant of mental health and mental illness. Gender determines the difference in power and control that men and women have over the socioeconomic factors of their mental health and their exposure to specific mental health risks.

“Women are under immense pressure to perform in various spheres of their lives. Juggling a career, motherhood and marriage or a relationship can be emotionally and physically taxing to the extent of affecting one’s health, especially mental health. It is therefore imperative that women take good care of their health and wellbeing amid the demands of a competitive and fast paced lifestyle presented by the demands of modern society,” says Dube.

Depression is not only the most prevalent women’s mental health problem but may be more persistent in women than it is in men. There is more research needed to determine the reasons for this and what can be done to address it.

Related: 30 Top Influential SA Business Leaders

Unlocking empowerment

This Women’s Month, Dube says women should feel encouraged to be proactive about their own career development, and about helping other women to grow – both personally and professionally.

“As women we should be firm believers in one another. We hold the keys to opening doors for other women. By creating a support structure for one another, we can create phenomenal opportunities to make a difference for fellow women, with the aim of creating leaders and catalysing empowerment that has a ripple effect, benefiting all of society and the economy as a whole. Studies have revealed that women reinvest up to 90% of their income into their families compared to men who reinvest 30-40%. This has far reaching socio-economic gains for any society,” concludes Dube.

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Leaderex Drives Digital Transformation Agenda For 2018 Summit

Leaderex, Africa’s largest gathering of business leaders, professionals and entrepreneurs, returns to Johannesburg on 4 September 2018.

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Building on a successful debut in 2015, the organisers, Leader.co.za, in association with the JSE and leading think tanks, will host 250 masterclasses on key priority areas to drive digital transformation, including agile leadership, innovation, fintech and blockchain, AI, IoT, ecommerce and the future of work.

“Our programme has been designed around peer-based learning, allowing participants to gain practical knowledge from the trenches, engage with the best in the business, and thrive in a disrupted world,” says Leader.co.za.

Over five hundred CEOs and industry leaders will share actionable insights and advice on the day, representing one of the largest collaborations of its kind in the country.

Delegates will have the opportunity to connect with incubators, accelerators and start-up platforms, explore MBA programmes and business schools, and participate in one-on-one sessions with respected coaches and consultants.

South Africa’s lack of a savings culture will be another talking point, and investment vehicles, from tax-free savings to ETFs, will be thoroughly unpacked.

“We are pleased to be working with Leaderex again this year because we have seen the impact that the event has had since inception,” adds Mpho Ledwaba, Head of Marketing at the Johannesburg Stock Exchange (JSE).

For executives and entrepreneurs looking to unlock value through new technologies and ways of thinking, Leaderex 2018 represents a highlight on the business calendar.

Tickets can be purchased online at www.leaderex.com.

Read next: 22 Qualities That Make A Great Leader

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(Infographic) Chevron South Africa Says Its B-BBEE Transformation Is A Driver Of Job Creation

Creating new Black entrants for 50% of its retail network; and channeling approximately 50% of its crude procurement through Black and Black Female-owned oil trading companies are just two great examples of how an integrated oil company can support South Africa’s socio-economic transformation objectives.

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  • 82% of the workforce are Black South Africans with 65% of top and senior management comprising of Black employees
  • Procurement, a major driver of B-BBEE strategy, aimed at creating entrepreneurs
  • Majority Black-owned Branded Marketers own 50% of Chevron’s Retail Network
  • R100 million provided towards Enterprise and Supplier Development.

Chevron South Africa’s executive chairman, Shashi Rabbipal, is strongly in favour of transformation in the oil and gas sector as a driver of job creation and value for the company and its various stakeholders.

According to Rabbipal, the company views transformation as a key value enabler for business, achieving a newly minted Level 2 against the revised Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practice.

Rabbipal outlined that the company has harnessed its procurement capacity and its Branded Marketer network to create an environment where entrepreneurship can thrive in the energy sector.

The company said that creating new Black entrants for 50% of its retail network and channeling approximately 50% of its crude procurement through Black and Black Female-owned oil trading companies are two great examples of how an integrated oil company can support South Africa’s socio-economic transformation objectives.

Chevron South Africa’s Level 2 achievement is most impressive, given that it is based on the company’s full value chain which includes its Cape Town refinery and its national network of Caltex retail service stations.

Related: What Is BBBEE?

Transformation embedded in business strategy

“Our commitment to Transformation goes beyond compliance as we continue to seek opportunities which drive job creation and economic prosperity, cultivate mutually beneficial business relationships and demonstrate good business practice,” said Rabbipal.

The following examples illustrate actions Chevron South Africa has taken to deliver on the country’s Transformation objectives:

  • 82% of the workforce is Black, with 27% Black Female.
  • 90% of the Board Directors are Black South Africans, with 30% Black Females.
  • A flagship programme building capacity for Black unemployed youth living with disabilities has been implemented, with an intake of 66 learners to date.
  • 90% of procurement is with Black suppliers.
  • Approximately 50% of procured crude oil and petroleum products is through Black-empowered trading companies, of which roughly 35% are Black women-owned.
  • An Enterprise and Supplier Development programme has provided over R100 million in interest-free loans, credit lines and deferred marketing loans to designated B-BBEE beneficiaries within the procurement pipeline.
  • 50% of the retail network is owned by Black entrepreneurs through the Caltex Branded Marketer Programme, with average Black ownership of 73%.
  • Social investment partnerships impacting 50,000 direct beneficiaries each year in the areas of health, STEM education and economic development.

“We conduct business in a socially responsible and ethical manner, leveraging our ability to benefit the communities where we work. As such, Transformation is more than a scorecard to us and is deeply embedded in our business strategy,” Rabbipal concludes.

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