The Centre for Entrepreneurship and Innovation takes a look at the tips and advice gathered from the FNB Endeavour South Africa Entrepreneur’s summit.
Less than 5% of the SA population is carrying the remaining 45% economically. South Africa recently announced an unemployment rate of 26.7%
Entrepreneurship is therefore seen as the only way to have a sustainable economy in the future. However, eight out of 10 new businesses in SA fail within the first two years, for a variety of reasons.
Two groups of entrepreneurs were highlighted:
Necessity entrepreneurship focussing on survival ie entrepreneurs starting a business to taking care of themselves and their own families financially.
Opportunity entrepreneurship aimed at identifying and seeing the opportunity to establish a growing business that creates employment for others. This is the category we require more of in SA.
Tips and pointers, as well as key issues raised by the various speakers:
1 Traits that entrepreneurs need to develop include: being risk takers and be willing to make mistakes and learn, to be brave and bold, to be passionate and confident about what they can offer, to be resilient. Entrepreneurs continuously need to overcome obstacles.
2 They need to know their industry and know who they are targeting as clients. They need to know more than their competitor.
3 They need to have some distinctive quality (unique selling point) that makes them different from their competition. You need to be able to explain your “uniqueness” in simple terms to potential clients.
4 Entrepreneurship is about connectedness: business is a social business, so you need to get to know and interact with people.
5 Entrepreneurs need to make their idea globally desirable – in this way they can expand their markets to overseas companies who are interested.
6 Entrepreneurs need to feel comfortable to get advice from experts or knowledgeable people.
7 Being action orientated is seen as a key driver to success. No business has a free ride: it will take hard work and long hours if you want to be successful. Most entrepreneurs are obsessed with their business.
8 Entrepreneurs need to look at growing their business from a micro operation to a high growth business. They need to be aware that in this scenario you cannot expect to generate income in 3-5 years. Their focus in this case needs to be on the value of the business when being sold as a going concern in 3-6 years’ time.
9 Mentorship and on-going education and training are essential for success. Entrepreneurs need to be surrounded by a strong support network of expertise. Invest in your development on an on-going basis.
10 There are many opportunities in small niche markets because the large companies are unable to be everything to everybody. Look for opportunities during bad times. See your ideas as bringing about change at a larger social and economic level. Other potential markets: “green” living, youth, education.
11 Get the basics of your business right.
12 Entrepreneurs need to start their business as if they are not going to have help from anyone ie don’t expect the bank to provide financing, etc. It is preferable to start with no debt and to set up your own support structures.
13 Entrepreneurs in the creative industry need to develop business skills.
14 In setting up a new business, entrepreneurs cannot be greedy about wanting a good short term return ie to generate a large sum of money. You need to have a long term vision.
15 If you choose to bring in shareholders you need to bring in people who share your long term vision – talk about where you want to take the business and what support you require from your shareholders. Pull in partners who can coach and mentor you.
16 Keep looking for new ideas and new opportunities.
17 Focus on getting clients versus making money.
We are in the Era of the Entrepreneur – an exciting time full of new opportunities, learning and constantly trying to develop yourself.
By Linda Germishuizen
Pictured: Luvuyo Rani