If you’re a South African woman who is thinking of going into business for yourself, yet fear the financial risks of doing so, you are not alone.
New research conducted by Livingfacts commissioned by Sage Foundation, reveals that more than 50% of women believe corporate jobs are ‘a safer option’. And, only 20% of those who don’t own a business felt they have the necessary network to support their family responsibilities.
The study pinpoints a need for financial stability and a low tolerance for risk-taking and failure are among the most significant factors holding back female entrepreneurship in South Africa.
Undertaken in partnership with the International Women’s Forum South Africa (IWFSA), the research highlights the obstacles that women face, including:
- a lack of exposure to entrepreneurial role models in their families and communities;
- poor access to funding; and
- the challenge of juggling personal and work responsibilities.
Nonetheless, the research also shows that South African women admire entrepreneurs and increasingly see entrepreneurship as a viable pathway to personal growth and wealth creation.
Sage Foundation and IWFSA unveiled the study at a breakfast for IWFSA members, business partners, customers and entrepreneurs at The Park House of Events on 7th in Hyde Park, Johannesburg on 25 July.
Sage Foundation and IWFSA conducted the research to fill the gap for data about the motivations and aspirations of South African women in the formal business sector. Sage Foundation has made a global commitment to women as part of its effort to build sustainable social, economic and entrepreneurial opportunities in Sage’s local communities around the world – but helping starts with having the right information at hand.
The study provides fresh insight into what drives South African women to establish businesses of their own, why they succeed and why they fail.
The research highlights how critical it is for NGOs, government policymakers and other stakeholders to position entrepreneurship as a viable career path for young women and to provide them with mentoring and support as they build their businesses.
1Family role models needed to encourage girls from an early age
Only 20% of women in the survey and a mere 16% of respondents who do not have their own business agreed that having your own business was seen as a viable career choice when they were growing up.
Most women saw corporate jobs as a safer option, with more than half (51%) saying “it is definitely important to me to have financial security and a stable salary”. Nearly a quarter of women saw losing these benefits as a deterrent to starting their own businesses.
The research indicates that few women get exposure to entrepreneurial role models in their formative years, with only 15% saying that they definitely had family and friends who often talked about business when they were young and only 29% who said that there definitely was a successful business owner in the family and extended family.
The lack of a role model carries through into women’s careers and later lives, too: Only 14% of women reported that they have a business mentor or role model.
“Young women need to be exposed to the possibilities and the benefits of having their own business at home, in their communities and schools, and in the media”, says Joanne van der Walt, Sage Foundation Programme Manager for Africa.
2The flexibility paradox
Some 59% of respondents who quit corporate jobs to set up a business said a key reason for doing so was that they wanted flexibility around how they managed family and work commitments. Yet 19% who gave up their entrepreneurial ventures to return to the corporate world cited a need for flexibility as the reason they went back to full-time employment.
Only 20% of those who currently don’t have a business felt they definitely had the necessary network of family and friends that can support their family responsibilities. What’s more, a higher percentage (70%) of women running their own businesses were married or living with someone who provides support, financially and in other ways.
Says Van der Walt: “Starting and running a business is far more time intensive than many women realise. Often, for women, a nine-to-five corporate job allows for more time with one’s family, and would-be entrepreneurs struggle to maintain balance between work and their personal lives – especially in the first few critical years of building a business. Changing gender stereotypes of who does what in a family and women overcoming their own reluctance to ask for help are key changes that could encourage female entrepreneurship.”
Female entrepreneurs show more appetite for risk than women who have not gone into business. The research found that 26% of women who did not have a business said they were not afraid to take risks, compared to 43% who had their own business. Meanwhile, 37% of those that never had a business thought it was scary to be in business for yourself.
“Many families encourage young women to look for government or corporate employment, seeing this as a lower risk route for their future careers,” comments Van der Walt.
“Yet with youth joblessness at above 50%, many of our young women may never have a corporate job. We need to help young women see the risks and potential failures of entrepreneurship as learning experiences on the road to growth and prosperity.”
4Capital and funding remains a primary necessity
Female entrepreneurs are finding access to capital and funding to be as much of an obstacle to starting their own businesses as their male counterparts in South Africa – if not more. Most (84%) women started a business using their own savings to do so; very few obtained funding from traditional banks and even less knew about venture capital, angel or seed funding, grants, or crowdsourcing.
Some 61% of women who have never had a business cited not having access to money or capital to start their own business, as a barrier, while 33% of those who went back to corporate jobs after starting a business said it was a key stumbling block.
5The rewards of being your own boss
The study confirmed that women are attracted to the benefits of being rewarded for their own efforts and the freedom to be their own boss when it comes to entrepreneurship.
They also saw entrepreneurship as a way to find personal growth and meaning, make a difference, achieve financial independence, give women a voice and control of their own futures, and create and innovate.
Among those that do not own a business:
- 58% admire entrepreneurs
- 42% want to work for themselves rather than someone else
- 36% envisage having their own business (even higher among young black women)
- 36% believe you can make a significant amount of money.
“The emergence of a growing community of female entrepreneurs is one of the most significant economic and social developments in the world. It is not merely redefining women’s economic roles; it is reshaping the modern global economy,” says Van der Walt. “Our research shows that this trend is also unfolding in South Africa – but it also highlights how much more we need to do to unleash the full potential of our country’s female entrepreneurs.”
Says Mpho Letlape, deputy president at IWFSA: “It’s a privilege to partner with Sage Foundation for this initiative. Research is vital for understanding how women are moving forward in the South African business world. With more insight into the challenges facing businesswomen and female entrepreneurs, we can focus on the areas where intervention is most needed. Right now, women leaders have an opportunity to make a difference in society, and help heal our nation.”
Sage Foundation will use the findings of this research to engage with policymakers and social NGOs about ways to encourage and support female entrepreneurs – starting from their school years. Sage Foundation already works with NGOs that support financial literacy programmes at primary and high school level. It will look for more NGO partners that it can work with to help remove some of the barriers that women face when they go into business for themselves.
Digital Learning Challenge Crowns 2018 Winners
AGEC proves that digital learning is an effective way to grow and develop a culture of entrepreneurship among SA’s youth.
Shriyaa Sooklal, from Maris Stella High School in KwaZulu-Natal, has been crowned the champion of SA’s leading digital learning challenge – the Allan Gray Entrepreneurship Challenge (AGEC), conceptualised specifically to develop the minds of young would-be entrepreneurs and coach them on how best to think like entrepreneurs. The results were announced at the AGEC grand finale at Gold Reef City in Johannesburg last night.
AGEC was established by long-term investment company Allan Gray and developed by the Allan Gray Orbis Foundation – a foundation committed to investing in the education and development of individuals with entrepreneurial potential in Southern Africa. The Challenge was designed to develop a culture of entrepreneurship in the minds of grades 8-12 using digital learning and gamification.
Currently in its second year, the Challenge seeks to inspire learners on how to influence change in their community, their country and the world. Learners were required to complete weekly micro-challenges that further exposed them to a variety of entrepreneurial skills, which were then applied to real-world scenarios.
During weeks one to three, learners began their entrepreneurial journey by exploring local challenges and opportunities in the areas of social entrepreneurship, transportation and healthcare. In weeks four to six the competition shifted focus to global themes of climate change, artificial intelligence and blockchain technology. Last night’s event wrapped-up six weeks of inter-school and inter-pupil participation across the country.
According to Anthony Selley, AGEC’s Head of Gameplay, entry participation doubled for the 2018 season, from 4 000 in 2017 to more than 8 000 in 2018. In addition, more than 600 schools across the country participated in this year’s Challenge.
“We are incredibly proud of every participant, and for the second consecutive year this Challenge proved that web-based experimental learning is an effective way to foster a culture of entrepreneurship among our country’s young folk,” Selley says.
The AGEC top five candidates include:
- 1st place: Shriyaa Sooklal – Maris Stella High School
- 2nd place: Sara Gopel – Riebeek College Girls High School
- 3rd place: Saheel Rajnarain – Crawford College
- 4th place: Kai Parsons – Cedar House School
- 5th place: Tahir Omar Carrim – Sutherland High School
Selley says the Challenge seeks to directly address the country’s alarming levels of unemployment using entrepreneurship as the main vehicle for change. The competition focussed on developing five overarching ‘habits of thought’, identified through academic research as key components of an entrepreneurial mindset. These include: intellectual imagination (innovation); personal initiative (initiative); courageous commitment (resilience); spirit of significance (change maker) and achievement excellence (drive).
Generation Schools Hermanus is the challenge’s top performing school with Glenwood House in second place, followed by Maris Stella, Kloof High School, Somerset College, in third, fourth and fifth place respectively.
“It’s been a phenomenal season, candidates have demonstrated impeccable skill and they’ve proved that they have what it takes to think like entrepreneurs. The success of this year’s event means we’re already in planning phase for a bigger and better 2019 season,” Selley says.
For more on the top 20 AGEC learners and schools, click here.
Creating Jobs Is Team Work
It takes stakeholders from across the business sector to cooperate in building businesses that can create jobs, says Cash Converters CEO Richard Mukheibir.
The franchise sector continues to grow healthily, according to the survey results recently released by the Franchise Association of South Africa (FASA). That sounds as if we should be in a good position to answer the President’s call to create jobs – but, as the saying goes, the truth is rarely simple.
The sector’s estimated turnover was R721 billion in 2017, growing its healthy contribution to GDP from 13.3 percent in 2016 to 15.7 percent in 2017. International investors have clearly been impressed by the SA franchise sector’s track record and are confident about its prospects. The number of international franchise brands in SA more than doubled from 12 percent in 2016 to 27 percent in 2017.
We saw employment rise in the franchise sector last year by 7.6 percent as 26 254 jobs were created in contrast to shrinking employment in other parts of the formal sector and in agriculture. At Cash Converters, for instance, we also responded to the Youth Employment Service, launched in June this year, by creating and training a roving stock-take team of first-time employees.
We would love to say we are expecting more of the same results this year – but that would disregard the economic and legislative environment where we try to make this happen. We congratulate multinational corporates such as Coco-Cola and SA Breweries who have committed to greater job creation and support among emerging farmers and local suppliers. In some senses, this is what the franchise industry does and wants to continue doing.
Of the 369 573 people employed in SA’s franchise sector last year, according to FASA, only 25 586 – or 6.9 percent – are employed by the franchisors to manage and operate their brands. The bulk of those employed in the sector – 343 987 people, or 93.1 percent – are employed by the individual franchisees.
Related: Be Your Neighbourhood’s Best Buddy
In other words, they are employed by small business people balancing the risk of their own capital investment in uncertain economic times against the benefits of operating within the support structure of a franchise brand. We need more of these bold souls to take on the challenge of becoming franchisees if we are going to be able to continue expanding the sector and creating new jobs.
But the economic picture in South Africa is still complex and difficult to read and we are seeing that having an impact on franchisee start-ups. On the one hand, we have had a good operational year with trading up by double figures across the Cash Converters group. On the other hand, we have had a slow year when it comes to franchisees opening new stores.
Everything from fuel and food prices to the exchange rate is shrouded in an atmosphere of doubt and uncertainty. Would-be entrepreneurs have lost confidence. They are sitting tight in a safe position, not wanting to risk their capital at the moment by starting up a new venture or growing their established business further.
But job creation can be sustained only on the back of a growing economy. Instead, the doubt and uncertainty is being felt at many different levels across the financial ecosphere. Banks are communicating their own uncertainty at the future by slashing the risk they will take on SA’s business sector.
At Cash Converters, three out of four of our would-be franchisees normally succeed in securing the finance they need to get their new store off the ground, start employing staff and contributing to our country’s economy. This year, though, the situation has been reversed. Only one out of four would-be franchisees have seen their finance approved and been able to set up and start trading.
All the rest – who were prepared to step out of their comfort zone, to cope with rental escalations, to tackle the ever-mushrooming pile of official regulations that encircle business ventures and to take risks in a difficult economy – have been left by the wayside. And so have the people they might have employed and their families.
Each of our start-up stores employs an average of 12 people, usually expanding to about 20 over the first year or two as it begins to break even. But in too many cases, those jobs are not being created. As a result, for every would-be store that is not opened, up to 120 people are not being fed.
As we all reflect on this Jobs Summit, I invite SA business and our financial partners to consider how we can bridge this gap effectively and create the jobs that are waiting in the pipeline.
Trading and entrepreneurial instincts are key elements of the business DNA of Cash Converters Southern Africa co-founder and managing director Richard Mukheibir. He traces his family’s lineage in small business development back more than a century to his grandfather who founded Mukheibir Brothers in Barkly East in 1897. Mukheibir co-founded Cash Converters Southern Africa with Peter Forshaw in 1994 and has now been involved with franchising for nearly a quarter of a century, thriving on its energy and the people-driven environment.
Sandoz Healthcare Access Challenge (HACk) Returns, Seeking Digital Solutions To Local Healthcare Access Challenges
Despite major advances in modern medicine, universal access to healthcare remains the largest unmet medical need. Building on the inaugural Sandoz HACk, this year’s competition expands to seek broader digital solutions to local healthcare access challenges.
Sandoz, the Novartis generics and biosimilars division, today announces the launch of the second Sandoz Healthcare Access Challenge (HACk).
The Sandoz HACk is a global competition that invites entrepreneurs and innovators in the field of digital technology to submit inspirational ideas with the potential to complement – or even positively disrupt – established approaches to driving access to healthcare. Sandoz HACk opened for entries on Friday, 4th October, closing on November 30, 2018.
Universal access to healthcare is still arguably the largest unmet medical need and, while great strides continue to be made globally, access challenges vary hugely across geographies and communities. Therefore, a major step towards improving healthcare access globally is to identify and understand the specific needs of local communities.
“There are still two billion people in this world not getting the medicines they need. This is why we are launching Sandoz HACk as we aim to inspire and embrace the brave and innovative thinking of entrepreneurs and visionaries to improve access to healthcare around the world”, said Richard Francis, Division Head and CEO of Sandoz.
Francis added: “Building on the inaugural Sandoz HACk, this year we are broadening the competition to anyone, anywhere, with an idea that uses digital technology to help address a local healthcare access challenge. By collaborating, we hope to create ambitious-yet-practical digital solutions that, with scale, could have a significant impact on people’s lives.”
Digital innovation promises cost-effective and practical solutions with the power to transform access. Last year, Sandoz HACk focused on m-health (mobile health). This year’s theme is ‘Leveraging Digital Technologies to Solve Healthcare Access Challenges’: Encouraging ideas that can drive patient access or help healthcare providers to reach more people.
Three shortlisted entrants, to be announced in January 2019, will receive support from Sandoz experts to develop their ideas and transform potential into real impact. Our three finalists will travel to the world’s leading forward-focused gathering of creative minds, South by Southwest (SXSW; Austin, Texas) in March 2019, to explore, network and discover the latest innovative trends. Following in-person selection, one winner will be chosen and awarded seed funding and support from Sandoz, to help bring their idea to life.
For more details on how to enter the competition and terms and conditions, see here.
For further details visit www.sandoz.com/makingaccesshappen
Join the conversation on Twitter and Facebook using #SandozHACk.
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