Access to new markets and funding are the biggest barriers to developing or taking female-owned businesses to the next level, according to a South African Entrepreneurship survey by Standard Bank.
Jobs and growth in Africa will be dependent on innovation and entrepreneurship, but the survey of 130 South African female entrepreneurs found that most women are still pressured to pursue a traditional career. Yet, if they do, they are then pressured to be the “perfect business woman and homemaker”.
According to the survey, which was conducted in October to coincide with the inaugural Lionesses of Africa Annual Conference in Johannesburg, female entrepreneurs are seeking more resources (31%), support (24%) and networking (22%). Interestingly, infrastructure, training and technology were not seen as barriers by this group of women entrepreneurs, but this may be attributed to the sizes of their businesses.
Almost all of the respondents had relatively small to medium-sized businesses with less than 20 employees (95%), and of those surveyed 44% had children (40% married with children, while 38% were single with no children and 6% single with children).
The survey found that having support in the form of family and mentors is high on the list for these entrepreneurs.
Jayshree Naidoo, Head of Incubator at Standard Bank, says a work/life balance is widely viewed as the most common tension point that female entrepreneurs experience in their working lives:
“Most women who work and have families, or who want a fulfilling social and work life, struggle to create a balance,” she explains.
“It’s a tough act, but one that is certainly possible with careful planning, support from loved ones – most importantly – we need to empower women to stop feeling guilty about perfecting their roles, as mother, wife, daughter, businesswomen etc.”
On the back of the prompted mention of work/life balance, the Standard Bank survey also finds that financial instability is one of the biggest tension points facing female entrepreneurs, along with being time-strapped and not being taken seriously.
Moving to the motivations for entering entrepreneurship, the majority of respondents revealed the main motivation for having a successful business is mainly to make a social contribution to the community (42%), as well as securing a future for themselves and their family (27%).
“South African female entrepreneurs see investing for a social return and creating social change just as important as investing for a profitable return,” says Ms Naidoo. “They feel that by doing this, longer-term and more patient investments can be made.”
This comes as economies globally grapple with the consequences of short-termism as opposed to the long-term sustainability of businesses.
“Women entrepreneurs are viewed as marathon runners; they take the time to harness and nurture businesses for years – an approach that is favourable for the development of the African economy. On the other hand, male entrepreneurs are more like sprinters. They build a business to reach its fullest potential and then sell it off for the next opportunity.”
The Standard Bank survey found that being a female entrepreneur takes courage, with those who have fear choosing to overcome it. In the survey, 82% of the respondents agreed that they are “fearless” when it comes to being female entrepreneurs in Africa – and they are fearless because the fear of not succeeding is greater than that of not acting.
The 2015 Global Entrepreneurship Monitor (GEM) survey shows that more than half of the working-age population in the 60 economies surveyed, on average, feel they have the ability to start a business. In a broad sense, however, women are less likely than men to engage in entrepreneurship, but when they do, they are more likely to do so out of necessity. The GEM survey found that in many areas with low GDP per capita, women must find ways to earn extra money to supplement household income and pay for such necessities as schooling, clothes and food to feed the family. Additionally, in many African countries in particular, a family may support another family that has fallen on hard times.
On the contrary, from a South African perspective, most of the surveyed entrepreneurs, who predominantly service the formal entrepreneurship market, citied that their main motivation for becoming an entrepreneur is to follow their passion/heart (54%), while the best thing about being a female entrepreneur is the ability to create their own future (46%).
“A concern remains that while many women have great ideas, they don’t have all the necessary tools or funding to hire people who have the tools,” Ms Naidoo continues. “Breaking down barriers to infrastructure and access to markets is needed, and this is why Standard Bank stands committed to playing an important role in assisting female entrepreneurs to thrive in Africa, a continent we call home, and drive her growth.”
The specific challenges highlighted in the survey need to be addressed as we build the businesses of the future that will take Africa and female entrepreneurs forward.
“Because we are committed to driving progress on the continent, Standard Bank is dedicated to supporting the development of African female entrepreneurs by being a partner for growth, and celebrates those who are making a difference,” Ms Naidoo concludes.
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.
Start-up Advice1 week ago
6 Fundamental Steps To Consider Before Venturing Into The South African Cannabis Industry
Business Landscape1 week ago
How Algorithmic Forecasting Can Improve Business Efficiency In Challenging Economic Times
Business Ideas Directory1 week ago
300 Business Ideas To Inspire You Into Entrepreneurship
Start-up Advice1 week ago
Outdoor Versus Indoor: How Different Conditions Will Impact Your Budding Marijuana Business
Women Entrepreneur Successes2 days ago
How A Serious Car Accident Led Founder Relebohile Moeng To Starting Afri-Berry
Lessons Learnt4 days ago
(Slideshow) Top Advice From Local Entrepreneurs That Will Change Your Business In 2019
Start-up Advice1 week ago
4 Things Nobody Tells You About Entrepreneurship
Company Posts1 week ago
Success Fuelled By Partnership