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Seed Academy Release Results Of SA’s Largest Entrepreneurial Survey

Youth entrepreneurship, access to funding and markets remain key challenges.

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Real State of Entrepreneurship in South Africa 2017

More impactful business development support that provides entrepreneurs with robust business basics is needed to increase small business success rates, while a decline in youth owned businesses has emerged as cause for concern given South Africa’s dire unemployment figures.

These are just some of the findings of South Africa’s largest entrepreneurial survey, the Real State of Entrepreneurship in South Africa 2017, announced by Donna Rachelson, Seed Engine CEO, incorporating Seed Academy and the WDB Seed Fund. Conducted by Seed Academy and now in its third consecutive year, the survey is the biggest and most widely referenced of its kind.

Related: What Type Of Growth Funding Do You Really Need?

This year’s survey, which canvassed over 1,200 entrepreneurs, expanded its scope from start-ups to all entrepreneurs at any stage of business development to gain valuable insight on the true state of entrepreneurship in South Africa.

Donna Rachelson

Donna Rachelson

“Encouragingly, we are seeing the gap between the number of male and female entrepreneurs start to narrow as women represented 47% of entrepreneurs surveyed. This gives some indication that efforts focused on the development of women owned businesses are beginning to pay off. Similar initiatives are now urgently needed to develop youth entrepreneurs so that entrepreneurship is viewed as a ‘real’ career option,” notes Rachelson. 

Expanding on the success of previous years, the 2017 survey sharpened its focus on the challenges faced by entrepreneurs in key areas such as access to funding, business support and skills development. Although some 65% of survey respondents were in possession of a post-matric qualification and a sizeable majority at 85% had at least one year’s work experience before starting a business, many entrepreneurs indicated that they require education specific to the practicalities of running a business such as marketing support and business planning.

Rachelson says that while Centres for Entrepreneurship at TVET colleges are making strides in entrepreneurial education, both the public and private sectors need to look at what more can be done and how this kind of education could be incorporated into both basic and tertiary curricula.

Interestingly, 33% of entrepreneurs that have been in business for more than two and half years attribute the primary reason for their success to cultivating strong personal networks. This finding bears some correlation to the fact that 95% of businesses are funded by a combination of owner’s funds and funds from owner’s friends and family.

Related: Funding Your Start-Up

“What we can interpret from this is that entrepreneurs place a high value on cultivating strong trust-based relationships that can help the business owner with access to markets and other opportunities including access to financing, both of which were stated as the most pressing challenges by 67% and 43% of entrepreneurs respectively.” 

Rachelson adds that only 18% of entrepreneurs surveyed have attempted to secure funding from banks or development funding institutions like the IDC or DTI. “Some entrepreneurs indicated that they simply don’t know where to go for funding especially in light of the fact that most early-stage business funding requirements are below the R100k threshold. There is certainly a case to be made for funding providers to revise certain requirements to better accommodate the unique needs of small and early-stage businesses. Of course, one unfortunate implication of self-funding is that growth potential is limited to the owner’s own pocket and diminishes the ability for a small business to increase capacity, hire more staff, and make a more meaningful impact on the South African economy.”  

This year’s survey has also revealed that the top sectors represented by respondents are Information Technology (IT), Business Services, Construction, and Advertising, Marketing & PR. These are however weakly aligned to the South African government’s priority sectors of Manufacturing, Construction, Utilities, and Telecoms, indicating that more aggressive efforts are needed to incentivise businesses development in these key priority sectors. 

According to Rachelson one important aim of the survey is to positively influence the entrepreneurial ecosystem in South Africa by providing the basis for robust engagement for policy makers and providers of financial and non-financial support to business in South Africa. In addition, the research functions as a useful touchpoint to help educate individuals thinking about starting a business, and those already running businesses, about the current challenges and opportunities facing entrepreneurs in South Africa. 

“With each survey, we learn something new that challenges us and the broader entrepreneurial ecosystem in South Africa. Armed with concrete new insights we are better equipped to make significant changes to the way we support entrepreneurs,” says Rachelson. 

The full report is available for download here: http://www.seedengine.co.za/

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This Is A Call To The Curious – Applications For The Allan Gray Orbis Foundation Fellowship Programme Are Open

The Allan Gray Orbis Foundation is calling on all young, entrepreneurially-minded South Africans to enlist in the most comprehensive and stimulating Fellowship opportunity in Southern African. Applications opened on 22 January 2018.

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The Foundation takes a holistic approach to entrepreneurial development and believes that entrepreneurially-minded individuals with ethical values and strong leadership skills hold the key to change in South Africa and the globe. The Foundation supports entrepreneurs to improve the socio-economic landscape of Southern Africa. Further, it provides youth who demonstrate the highest potential access to education and assists them with cultivating an entrepreneurial mindset.

The Fellowship’s entrepreneurial and personal development programme runs throughout the academic year alongside the Candidate Fellow’s university studies. The Fellowship provides access to university education and includes comprehensive tertiary financial support to selected students.

Criteria for Grade 12 Learners

  • Level 5 in Pure Mathematics for Grade 11 final results
  • Level 6 average for your final Grade 11 results (excluding Life Orientation)
  • Completion of the National Benchmark Test by 30 September 2018
  • Under the age of 21 in your application year
  • South African citizens.

Related: 10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

Intention to study towards a degree in Commerce, Science (excluding Medicine), Engineering, Law or Humanities (majoring in Politics, Philosophy or Economics) at the University of Witwatersrand (WITS); University of Johannesburg (UJ); University of the Free State (UF); University of Cape Town (UCT); Nelson Mandela University (NMU), Rhodes University; the University of the Western Cape (UWC); University of Stellenbosch or the University of Pretoria (UP).

What it covers

  • The full cost of university tuition
  • The full cost of university accommodation, meals, books and tutor allowance
  • A monthly living stipend
  • Academic support and access to entrepreneurial and personal development programmes
  • Mentorship from individually assigned Foundation staff as well as business mentors
  • Access to potential postgraduate funding for graduated Candidate Fellows
  • There are no postgraduate contractual obligations with the Foundation.

Related: 9 Top Tips For Young Entrepreneurs

How to apply

Visit www.allangrayorbis.org to download an application form or SMS “Gr12 and your fax number or email address” to 36777. The application closing date is the 11 May 2018.

Watch this video to learn more about the Allan Gray Orbis Foundation. More information is available at www.allangrayorbis.org and www.facebook.com/allangrayorbis.

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Facebook Launches A Classifieds Marketplace In South Africa

Facebook has launched Marketplace in South Africa, offering users a single destination on Facebook where they can easily discover and buy and sell goods with other people in their local community.

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Available in 47 countries, with more than 550 million people from around the world visiting Facebook to buy and sell goods each month, Marketplace makes it easier for people to trade with others on Facebook.

Using Marketplace

  • To use Marketplace, tap on the Marketplace icon
  • To find what you’re looking for, search at the top and filter your results by location, category or price
  • To sell something, take a photo, describe your item, set your price and you are done
  • Buyers and sellers can communicate with each other using Facebook Messenger.

Related: 10 Motivational Quotes from Facebook Genius Mark Zuckerberg

Trading Safely

Facebook helps you trade safely on Marketplace by offering safety tips, privacy controls and easy-to-use reporting tools.

Top tips for trading safely on Marketplace:

Commerce Policy

Items, products or services sold on Facebook must comply with Facebook Community Standards and Commerce Policies. Please view the list of items prohibited on Facebook.

Verify the item

When buying an item, examine it carefully for quality, condition and authenticity before paying. For high-value items (watches, luxury bags), consider requesting a certificate of authenticity or proof of purchase.

Related: How You Can Avoid The ‘Facebook Effect’

Be shipping savvy

facebook-shipping-productsIf the seller offers to ship the item rather than exchanging it in person, you may not have the opportunity to verify the item before completing your purchase. You can use a service such as Standard Bank’s Shepherd to arrange safe payment and shipment. Shepherd keeps the money for a transaction in a trust account and releases it to the seller once the buyer verifies he or she has received the correct item in good condition.

Meet in a safe location

Don’t invite buyers or sellers to your home. Meet in a public place like a coffee shop or the mall. Before going, tell a family member or a friend where you will be, bring your cell phone, and consider asking another adult to come with you.

Use cash, COD, or person-to-person payment methods

Buyers and sellers may offer or accept cash or person-to-person (P2P) payments. If you choose to pay electronically using EFT, avoid payment links and log in directly through the payment method’s website. If the value of the item you intend to buy or sell requires a significant amount of cash, you might consider using a person-to-person payment method, such as PayPal or FNB eWallet.

Protect your privacy

Don’t share your financial account information (example: Payment login and password, bank account info) with buyers or sellers. Additionally, make sure your Facebook Privacy Settings are up-to-date. These settings help limit what other people can see (example: status updates, location, photos) on your profile page and what you share on Facebook.

Report someone

If you’re having a problem with someone in Marketplace, you can report them.

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5 Things SME’s Need To Be Thinking About In 2018

In 2018, small-to-medium-sized enterprises (SME’s) will be looking for a glimpse of inspiration to chart a new growth path and scale their businesses. This is off the back of a tough 2017 and previous years which have inhibited the growth of local SMEs.

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In 2018, small-to-medium-sized enterprises (SME’s) will be looking for a glimpse of inspiration to chart a new growth path and scale their businesses. This is off the back of a tough 2017 and previous years which have inhibited the growth of local SMEs.

Jesse Weinberg, Head of the SME Customer Segment at FNB Business says “Small business success becomes a monumental task when there’s arguably very little to no real economic growth overall. However every challenge presents an opportunity, and in South Africa, not only are we fortunate to consistently have SME development as a key objective on the national government agenda, but most corporates are also  hungry to shift spend to smaller businesses as part of the procurement policies.”

Weinberg says as 2018 begins in earnest, there are some important insights that business owners should consider in order to grow their businesses.

The digital economy is in full swing

SME’s that are comfortably operating without adopting digital technology in their business will likely be outperformed by their competitors unless they adapt to the current reality. Across the globe, consumers and businesses are rapidly migrating services to digital channels for its sheer efficiency, convenience and scalability. This includes basic elements like digitising accounting processes with software, through to using social media to campaign to customers.

If you’re ever unsure where to start, start by observing your customers and listening carefully to how they expect to be dealing with a business like yours – you can’t go wrong by putting yourself in your customers’ shoes and then reflecting on your business through their eyes.

Related: 4 Unique Marketing Ideas For SMEs On A Budget

Expect little to no help from the economy

The Word Bank recently predicted that SA will grow at roughly 1.1% in 2018 and while this is not cast in stone, it’s a relatively firm indicator that SME’s will have to do the hard yards to engineer any form of business growth. The focus should thus mainly be on differentiating your business, products or services from your competitors through marketing or even innovation if possible.

Maximise your banking relationship

Banks are investing a lot of time to understand the needs of businesses and have some of the tools to help SME’s run efficiently. The relationship should not be only be limited to just banking. With the multitude of rewards and value-add services offering by most banks, with just a bit of time spent understanding the offerings, great value can be derived for you and your business. Examples of these offered by FNB include eBucks rewards, free Instant Accounting software and CIPC registration services.

‘Think Local, Act Global’

Your business may be based in South Africa but its potential to scale shouldn’t be hampered by your location. In other words, be open to the opportunity of growing your business beyond South African shores, especially if your service or product has universal appeal and relevance. With global marketplaces such as Alibaba and AirBnB, the world market has never been more accessible and easier to do business with.

Related: SchoemanLaw Shakes Up The Legal Industry To The Benefits Of SMEs

Avoid the race to the bottom

Market forces continue to show that consumers aren’t only focused on the cheapest product or service despite the tough economic conditions. These days offering great service will build trust and loyalty with customers and keep them coming back. If you combine this with good quality, accessible products and services you will generally have an edge over your competitors offering the same or similar products and services.

“Even though 2018 is unlikely to come with an SME development boom, a solid homegrown business can still grow sustainably. More than ever, business owners need to arm themselves with as much information and insights as they can to grow their businesses or even reduce the risk of total business failure. With South Africa’s level of unemployment showing little to no signs of reduction, we need to sustain the spotlight on growing our SME sector and offering as much support to it as possible. SME’s represent one of the most effective ways to create employment in local communities, especially if these businesses find ways to trade with customers beyond their normal operating territories.” says Weinberg.

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