And since establishing and growing small to medium-sized businesses has the potential to lift South Africa’s economy from the brink of ruins by contributing to job creation; nurturing these mindsets are essential to set entrepreneurs on the right path.
To this end, the Allan Gray Orbis Foundation – an organisation committed to investing in the education and development of individuals with entrepreneurial potential in Southern Africa, commissioned the Global Entrepreneurship Network (GEN) and Mindcette – an entrepreneurial consultancy to establish the true “DNA of a successful entrepreneur”. The mindsets study titled: Toward a Comprehensive Measure of Entrepreneurial Mindset, surveyed 3 661 South Africans using quantitative research, posing questions which required answers directly relating to the key mindsets of an entrepreneur.
“Developing the right mindset is where it starts in order to change our holistic approach to entrepreneurship. The Foundation takes this research and its results very seriously. It supports the work we do with growing young entrepreneurs in the country, and assists us with developing and providing more practical workable future programmes,” says Yogavelli Nambiar, CEO of the Allan Gray Orbis Foundation.
Kelly Shaver, president of Mindcette says his organisation carried out this research survey in line with the Foundation’s requirements. It set out to create a survey instrument that not only described entrepreneurial mindsets in South Africa, but also one that could be used subsequently in national studies in other countries in the Global Entrepreneurship Research Network. Consequently, the Foundation was able to extract the 11 most commonly occurring themes that appear to characterise entrepreneurship.
Each of these themes can be further unpacked to create 76 separate descriptors of characteristics – but, since many of these differ slightly, researchers found that it was more appropriate to focus their questions around 37 critical descriptors.
These ranged from the individual’s creativity and conscientiousness to whether they found it easy to be coached; from their resistance to conformity to their persistence and personal goals; their passion, resourcefulness, ability to accept risk, leadership ability, innovativeness, curiosity, emotional intelligence, financial goals, self-reliance and self-confidence.
The report reveals the following key dimensions for would-be entrepreneurs:
According to the findings, there are 11 dimensions which may be used to commonly describe female entrepreneurs, and 10 that appear to characterise male entrepreneurs. Only two of these dimensions (Entrepreneurial Desire and Focus) are identical in male and female sample participants (with Allan Gray Fellows scoring higher in these dimensions), although seven additional dimensions are common to both, varying only in terms of the extent to which they characterised the sample members.
These dimensions included: confidence, diligence, innovation, leadership, motives, resilience and self-control. Among the male respondents, five of the ten dimensions distinguished those who reported being self-employed full time from those who did not. That is, focus, confidence, leadership, resilience, and self-control. This contrasted the findings for female respondents, for whom only Desire and Focus showed differences between the self-employed and other respondents.
“Put all of these characteristics together and a clear picture of an entrepreneurial individual emerges – one who believes in him/herself so strongly that failing is not an option. However, should it happen; this person will keep going. These findings reveal a common thread – young potential entrepreneurs, men and women alike are confident and resilient, two fundamental characteristics when embarking on an entrepreneurial journey,” Nambiar says.
She says the survey’s results takes the Foundation a step closer to identifying the traits shared by entrepreneurs, thus providing a basis for describing the entrepreneurial mindset, the precise traits needed to take a business from start-up to empire, and to create a single instrument that can be used to identify and measure the presence of these traits would be an enormous help in this regard. Furthermore, some of the differences obtained between women and men could inform modifications in entrepreneurship programme structure, in order to tailor entrepreneurial training more closely to the individual strengths of both sexes.
To monitor entrepreneurial mindsets and behaviour, Nambiar says the Foundation has been advised to repeat the survey in a year or two, to determine whether there’ve been any behavioural changes among SA’s entrepreneurs.
“Entrepreneurship is a dynamic and exciting field, but the risks associated with it are very real. As budding entrepreneurs pursue success, they need every tool available to take them a step closer to achieving their dreams. That’s exactly what makes this survey a vital undertaking,” she says.
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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