Entrepreneurial prospects are plentiful in South Africa as every sector has a product or service that can be improved upon.
Entrepreneurial endeavours therefore depend on the individual’s determination to not only notice the particular gap in the market, but act on the opportunity in order to capitalise on a potentially lucrative business opportunity.
The history of the Sanlam / Business Partners Entrepreneur of the Year® competition, now in its 27th year, demonstrates the opportunities available in the country. Since 1988, the competition has produced 51 winners across various categories and of these winners, at least 18 have set up businesses that were started in competition to their previous employers, which were large established brands or businesses.
Christo Botes, spokesperson for the Sanlam / Business Partners Entrepreneur of the Year® competition says that this illustrates that a ‘million dollar idea’ doesn’t need to be a new creation for a business to be successful.
“The benefits of taking the first vital step from being employed with a large corporate to becoming a small business owner can be boundless, not only for the entrepreneur, but for the business’ potential future employees. Throughout the years, we have been privileged to witness firsthand the pivotal role entrepreneurs play in job creation and GDP contribution in South Africa.”
Botes points to three previous winners that today form part of sizable stock exchange communities:
- Greg Petzer and Ken Fletcher of Diverse Labelling were the 1992 Entrepreneur of the Year® winners, and today form part of the Astrapak Group listed on the JSE;
- Dedreich and Ryan Otto of Megatron were the 2004 Entrepreneur of the Year® and today form part of the Ellies Group listed on the JSE;
- Ben Levitas of Astore Africa was a finalist in the 2013 Entrepreneur of the Year® competition and his company is now a subsidiary of Hudaco Industries listed on the JSE.
“A few others have also sold their businesses to large corporations for sizable amounts, such as the 2001 Lifestyle Entrepreneur of the Year® winners, Liyaqat and Soraiya Parker of Foodworld and Saveworld Stores, who sold their business to the Shoprite Group. These achievements highlight the possibilities that could transpire based on a simple business concept that is executed well.
In terms of job creation, one of the competition’s past winners, Pierre Conradie of the Alpha Group, Job creator of the Year now employs more than 1 200 employee, while many others have significant numbers employed in rural and semi-rural communities, such as the 2013 Entrepreneur of the Year® and Job Creator of the Year® winner, Tommy Makhatho.
Owner of BiBi Cash & Carry, a retail group situated in the rural area of Qwa Qwa in the Free State, Makhatho currently provides jobs to more than 800 employees.
“The 2014 winners alone, which consist of six entrepreneurs, have created employment opportunities for 414 people,” says Botes.
The competition, which embraces local entrepreneurship by offering an opportunity for entrepreneurs to showcase their achievements, includes an overall Entrepreneur of the Year® winner, as well as various category winners ranging from small business, medium business, emerging entrepreneur to a job creator and innovator award winners.
Of the 51 titles awarded over the last 26 years, over 30% (16) were awarded to female entrepreneurs, of which five were for the overall Entrepreneur of the Year®. More than 37% of all winners are from previously disadvantaged backgrounds.
“In the past five years the competition awarded eight black entrepreneurs and seven female entrepreneurs, which clearly shows that there has been a positive improvement in the success of female and previously disadvantaged entrepreneurs in the country,” adds Botes.
Botes says that it is also interesting to note the regional demographics of the overall winners over the years. “The entrepreneurs are relatively evenly split between the provinces, indicating thriving business throughout the country and that there isn’t necessarily a benefit to those that operate in South Africa’s main large metropolitan areas.”
He says that the competition’s judging panel looks forward to ‘unearthing’ the next group of entrepreneurial talent in 2015. “In particular we will continue to share the inspirational stories of the entrepreneurs, not only to acknowledge their feats and role in uplifting South Africa’s economy but also to inspire others to follow in their footsteps,” concludes Botes.
For more information, please visit www.eoy.co.za
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.
Herman Mashaba To Talk On City Of Jo’burg Job Creation Initiative
Herman Mashaba to talk on City of Jo’burg job creation initiative at 2019 Business Day TV SME Summit.
Leading organisations at the SME Summit
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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