OPINION: The need to empower small businesses
- Published on 16 February 2016
Delivering his State of the Nation address last week, President Jacob Zuma delivered a hard-hitting speech, one that government hopes will restore investor confidence in the country.
Though there were a lot of takeaways from the address, one of Zuma's key points concerned small businesses. "We need to empower SMMEs (small, medium and micro-sized enterprises) to accelerate their growth," he said. "Access to high-quality innovative business support can dramatically improve the success rate of new ventures.
"Economic transformation and black empowerment remain a key part of all economic programmes of government."
Then, Zuma re-asserted government's 9-point plan, a list first drafted during the 2015 State of the Nation address. One of the key points? Unlocking the potential of SMME, co-operatives, township and rural enterprises.
Our tips for SMMEs and entrepreneurs include:
Technology needs to be driving job creation
The fear in South Africa is that white-collar jobs are being lost and a large portion of the jobs market is falling by the wayside due to poor economic performance and the emergence of threatening technology. But in reality, if used innovatively, technology can create jobs. South Africa needs to use this technology to create jobs that did not exist before.
This paradigm shift is positive: FinTech companies are bringing new opportunities and innovation to stagnant industries. In the process, new opportunities and jobs can be ignited.
Township enterprises are a necessity
Zuma made a point of emphasising township enterprises – and this is key.
There are thousands of able-bodied workers in these townships with the potential to enter the job market – the challenge is to have the mechanisms and necessary skills to do so. Just like with smartphones, as the technology becomes more sophisticated, it gets easier to use and therefore more accessible in the townships.
By giving them access to pre-built technology, these businesspeople are able to change the way communities access financial services. This opportunity keeps the money in the community that is serviced.
Mind-set is key
An entrepreneur knows that it is better to earn their own money than to rely on a salary every month. Anyone can work for themselves: but the difference between success and failure is all down to attitude. The entrepreneurs that succeed are the men and women with the right mind-set and a get-up-and-go attitude. It won't always be easy, but the greater number of entrepreneurs in this country, the better.
Keep overheads low
The classic mistake businesses make is spend too much money every month. That's obvious, right? Yet it's amazing how so few entrepreneurs realise they're falling into the same trap. And when the bills are piling up, it can be difficult to excise the root cause.
Instead, start small, and keep it that way. When we do business, we like to keep our overheads as low as possible. After all, the more money you spend on frills, the less you get to keep at the end of the month.
By keeping overheads as low as possible business partners get to keep more of the profits and invest the money back into the community, or into further ventures.
There is never a better time to be an entrepreneur.
We live in an exciting time. The advent of new technology means that there are more opportunities for a greater number of people than ever before. The challenge is to find innovative new ways of using technology. As white-collar jobs dwindle, new career prospects emerge.
To safeguard the economy, the country needs to promote the importance of small businesses. SONA 2016 is a good start, but entrepreneurship is a valuable endeavour that too often gets overlooked.
The time is right to begin empowering ordinary South Africans.
* By Glen Jordan, Director at IMB Financial Services.