Angus Robinson, director of mobile, content and community divisions of Native, says the rate of change is ever increasing. Consumers are adopting new technology faster than ever before and their behaviour and expectations are changing.
Businesses have to respond. And there are two trends emerging that will help companies do just that – the lean start-up movement and the connected economy.
Up until now that response has been a slow and measured, with businesses adopting a cautious approach to innovation trying to get things ‘as near to perfect as possible’ before implementation.
This results in lengthy lead times in product or service development and to innovation in general.
Businesses should consider rethinking this approach and lean start-up is one of the preferred approaches to deliver on this challenge.
TREND #1 – Lean start-up
Lean start-up is a new way of managing a more uncertain environment in a more scientific way. It assists businesses in testing project-related hypotheses as quickly as possible.
A hypothesis is a set of assumptions deemed as the starting point for further investigation.
So for example a number different product offerings, payment options, value propositions or even digital platforms could be presented to potential customers in order to get feedback and responses.
It’s about changing the way you measure progress and revolves around learning.
By using the concept of getting a ‘minimum viable product’ to market in the fastest possible time is the ideal way to test what you are trying to prove. What do customers want and how are you going to make money?
We need to constantly be learning about what value is for customers and who their customers are, based on a hypothesis rather than perfectly executing a plan that is flawless.
Success should be based on how much validated learning is happening and how quickly this is happening through experimenting and learning from your customers.
Lean Startup is cyclical in nature moving from the idea to building the product, to measuring the data, learning from it and then using it to generate the next idea and so on.
A great international example of the success of Lean Startup is Zappos.com – an online shoes and clothing store renowned for its great customer service.
Instead of waiting to bring a flawless site to market, the creator decided to rather visit a shoe store, take pictures of the most popular shoes, and put them online to test the assumptions around selling a product such as shoes online.
These included, would people buy shoes online, how are returns handled, what information do potential customers want about shoes, how to they compare shoes online, how are international sizing complexities handled, and many more.
This basic site gave rise to a billion dollar business that was eventually acquired by Amazon.
TREND #2 – Connected economy
Another trend that businesses should be keeping their eye on is the much-spoken about connected economy. And, the connected economy is powered by connected devices.
What’s most important is how businesses will apply this concept to their organisation in the coming years. The introduction of smartphones into our daily lives has opened the possibilities of connecting to peripherals.
Peripherals are small, portable objects that can be plugged into or connected to a device. Smartphones have all the computing power needed to run other devices and innovative products are hitting the market almost daily.
The medical industry is benefiting from peripherals such as the IBGStar – a blood glucose-testing device that is plugged into an iPhone and, together with the Diabetes Manager App, helps users track blood glucose, carb intake and insulin dose.
The possibilities to use this info, not only from one user but linking multiples users, can provide the industry with trends and statistics that will lead to ground-breaking innovation.
Along with peripherals, the rise of sensors is changing the world dramatically. Sensors are devices that read environmental factors and present them in understandable formats or analysis, recording or comparison.
We find sensors in almost everything from cars and shoes to industrial units and mobile phones. Using information gathered from these sensors, organisations, cities and even countries could drastically change the way processes are managed, maintenance is done and business is run. The potential for cost-saving and reducing the environmental impact is vast.
So what does this mean for business owners? Firstly, decision-makers need to determine how sensors can gather information or data to help improve business operations and customer experiences.
They also need to look for peripherals that could result in more efficient job tasks and how the networked devices impact business effectiveness.
Most importantly – be agile and realise you are part of a changing world. Consider new ways of doing things and keep an eye on what is hot and happening in your industry.
What Franchises Need To Lookout For From Budget Speech
Franchise business owners are waiting with bated breath for the outcome of the 2019 National Budget Speech to be delivered by Minister of Finance, Tito Mboweni, as they seek more opportunities to increase their contribution to GDP.
Morne Cronje, FNB Head of Franchising, says the Budget Speech is an important economic indicator that franchises can use to gain insight on the government’s plans on spending and economic growth for the year ahead.
He highlights potential National Budget Speech outcomes that could boost confidence of franchises:
Any form of relief that is likely to bring positive change, rebuild confidence and address some of the key challenges impacting consumers will be welcome by franchises.
Cronje says consumer spending contributes a significant portion to the profit margins of franchises especially in the food sector.
Rating agencies are keeping a close watch on South Africa’s performance and prospects for growth, which will impact our Sovereign ratings for the rest of the year.
Measures that the government puts in place to promote economic growth this year will be of interest to franchises.
Franchise owners will be looking to benefit from regulatory changes that aim to improve growth, operating environment and enhance participation in all facets of the formal economy.
Based on the Mid-Term Budget Review in October 2018, there’s likely to be no major shake up from a business tax perspective. The anticipated relief in tax will go a long way to boost the profit margins of franchisees.
Spending on infrastructure creates vast opportunities for franchise business owners, as well as job creation in the country. The government has signalled an intention to partner with the private sector to develop an infrastructure fund to increase investment in public infrastructure.
“Franchises that operate in South Africa should prioritise the National Budget Speech as key decisions announced by the minister have a direct impact on their growth,” concludes Cronje.
5 Businesses You Should Start in 2019
Here’s the lowdown on consumer and technology opportunities in 2019 and beyond.
Savvy entrepreneurs should keep a close watch on consumer and technology trends in 2019. This, according to Silvertree Internet Holdings Co-founder and MD, Manuel Koser. Having invested in and grown a number of highly successful South African brands (among them Faithful-to-Nature.co.za, UCOOK.co.za, Pricecheck.co.za, CompareGuru.co.za, Petheaven.co.za, Cybercellar.com, and CarZar.co.za). Silvertree’s management team sees several business opportunities set to grow exponentially over the coming decade.
Here’s the lowdown on consumer and technology opportunities in 2019 and beyond.
1. Indigenous and ethical: Personal and home care products
2019 Sees growing potential for personal care products – ‘Those with local and indigenous ingredients, ethical sourcing which is kind to nature and the body,’ Koser explains. ‘There is a lot of room to play in the African haircare market particularly, as it’s often overlooked by the major FMCG companies.’
The Silvertree MD also sees increasing room for innovative natural home cleaners as consumers become increasingly environmentally conscious. ‘Until now, it was all about the well-known cleaning products the major chemical manufacturers put on the shelves. Now, there’s increasing space for new, exciting entrants.’
2. New beverages
‘Locally-sourced ingredients and an earth-first mindset will also play an increasing role in the consumer beverage market. Add to this the fact that major soft drink manufacturers will struggle to produce drinks for increasingly health-conscious consumers. They’re often just not quick enough to adjust to changing consumer tastes – particularly the tastes of millennials. Think less about a standard fizzy drink, but rather one that’s kind to the body, with natural ingredients. Non-alcoholic: water plus, say, cucumber, or another indigenous ingredient. The market for this will grow.’
3. Ethical snacking
Plant-based, vegan, ancient grains, ethical, protein-rich snacks – these are just some of the trends Koser sees dominating in the snack segment in 2019 and beyond. It’s about unique, tasty, functional foods that cater to the modern, time-starved consumer, Koser explains.
4. Buy, sell and compare online
In the technology space, marketplaces, e-commerce sites and classifieds will all gain momentum in 2019 and beyond. This encompasses aggregators as well as more unusual online businesses, which are increasingly able to find and reach consumers interested in niche products and services.
‘Consider an online ice-cream business. Once, something like that would have been unthinkable,’ Koser explains. ‘But as consumers demand greater choice, room for niche products like this grows.’
Yet, dabble online and seamless execution and delivery become make-or-break factors. ‘Many South African consumers use services such as Google, Amazon, Uber and Spotify daily – world-class products that function on a global scale. You can call an Uber and wait for just two minutes before getting a ride,’ Koser explains. ‘It’s quick and totally seamless. Consumers have come to expect that level of service across the board. Aligned to this is the fact that the millennial wave is currently hitting Cape Town right now, and Joburg secondarily, meaning a number of opportunities are opening up. Go after products and services in the right space and consumers will follow.’
5. Reinvent the wheel – and make it better
The final type of business entrepreneurs should keep an eye on is those that currently have low Net Promoter Scores. ‘This means that very few people like them, or the services they provide are of very poor quality,’ Koser explains. ‘Think of postal service providers or telecoms companies. With any monopolistic or oligopolistic structures, the service is often terrible because the heavyweights hold so much power. There’s a huge gap here.’
An allied approach for entrepreneurs is to assess opportunities for automation, or cutting out the middleman with technology. ‘Once, many markets – such as real estate were opaque, meaning you needed a middleman to help you transact. However, as the capabilities of technology have grown, markets have become far more transparent – making it easier for buyers to match with sellers safely. Today, a lot of this is easy to automate services – think about connecting a homeowner to a prospective renter through a digital solution where renters can be qualified, for example, in terms of their finances, personal information and criminal records. Quick and simple. And no middleman.’
The biggest opportunities here centre around where consumers spend the greatest amounts of time and money, Koser notes. ‘Housing and rent are always major costs. In terms of where consumers spend their time, on the other hand, much of it is, on a mobile phone, or PC.’
However, entrepreneurial success is never down to any one magic formula, Koser emphasises. Nor does Silvertree invest in prospective entrepreneurs solely on the basis of the product or service they offer. ‘It’s about passion, perseverance and tenacity as much as it is about the quality of the product.’
Silvertree Internet Holdings is an investment growth partner who aims to understand, grow and scale business, consumer and digital brands to unlock the brands’ exponential growth.
What To Watch For In Tito Mboweni’s First Budget Speech
By Rob Cooper, tax expert at Sage, and chairman of the Payroll Authors Group of South Africa.
Finance Minister, Tito Mboweni, delivers his first Budget Speech on 20 February at a difficult time for the South African economy. Even though President Cyril Ramaphosa has done much to restore business confidence in his first year in office, GDP growth remains weak, government finances are in relatively poor shape, and renewed load shedding is hurting business confidence.
Judging from his Medium-Term Budget Policy Statement in October last year, I expect Minister Mboweni — backed by the team in the National Treasury—to deliver a relatively cautious budget. Much of the focus will be on refinancing the state-owned enterprises and putting them back on to a sustainable footing.
We probably won’t see much in the way of radical thinking since the room for manoeuvre is so limited. Click each header below for an indepth video on the upcoming topics.
Renewal of the country’s public healthcare system with a mandatory health insurance fund and free healthcare at the point of need has been the ANC government’s policy for years, but progress has been slow to date. There isn’t much money in the country’s coffers to fund something as ambitious as NHI, yet the government will want to show that it is advancing the concept ahead of the elections.
With an NHI bill to be tabled in Parliament soon, we could learn more about how NHI will be funded in this year’s Budget Speech — it’s still not clear whether we will pay for it through payroll taxes, VAT increases or other fundraising measures. As an initial step, we could see medical aid tax credits reduced (or at least not adjusted for inflation) to free up some funding for the NHI.
The ETI Act came into effect on 1 January 2014; as a fan of this incentive, I was delighted that President Ramaphosa announced that it will be extended for 10 years another decade in his state of the nation address. However, I have also long argued that the scheme is not performing to its true potential because it is so complex for payroll managers to administer.
The introduction of the national minimum wage adds even more complexity— until and unless the ETI Act is amended, SARS is of the opinion that the National Minimum Wage will not qualify as a “wage regulating measure”. I hope the Budget Speech will announce steps to align the ETI with the national minimum wage and take other measures to simplify administration.
I don’t expect any major increases to corporate or personal income tax this year since the taxpayer doesn’t have much more to give. I think the top 45% rate will remain unchanged, while tax bracket creep relief (to compensate for inflation) will be limited to lower income earners. It seems unlikely that the Minister will increase VAT again this year, given last year’s increase.
That means the Minister is likely to look at ‘moral’ taxes (sin and sugar taxes) to raise more money; we can expect another steep increase in the fuel levy. Perhaps we’ll also hear about efforts to improve SARS’ revenue collection after several years of under-performance. The agency seems ripe for a turnaround strategy, with high-powered team looking for a permanent chief to take the reins at SARS.
Follow us on @SageGroupZA on 20 February 2019 for LIVE expert insights from the annual Budget Speech.
For more information about Sage’s annual tax seminars, please visit: https://get.sage.com/PRL_19Q1_C4L_ZA_EVCU_NPS_AnnualPayrollTaxSeminar2019
Self Development2 weeks ago
10 Secrets To Finding A Job You Love
Performance & Growth1 week ago
How Matt Brown Quadrupled His Business By Becoming A Niche Player
Entrepreneur Today7 days ago
Entrepreneurs Organisation Crowns the Winner of the Global Student Entrepreneur Awards
Entrepreneur Today3 days ago
5 Businesses You Should Start in 2019
Branding2 weeks ago
How A Strong Brand Protects Your Business
Marketing Tactics2 weeks ago
An ‘Outside-the-Box’ Approach to the e-Commerce Unboxing Experience
Hiring Employees2 weeks ago
Are You Hiring A Cultural Fit? Do You Actually Want To?
Business Landscape2 weeks ago
4 Tips To Create A Great Conference / Workshop / Event In 2019