In a difficult economy, challenges become increasingly severe on the retail sector, as consumer spending slows further, due to rising costs and a high household debt-to-disposable-income ratio, which results in consumers prioritising spend.
Despite this, income in the South African food and beverage industry increased by 10.8%, according to Statistics South Africa's latest food and beverage industry survey. Restaurants, coffee shops, take-out and fast food outlets drove this increase. FASA attributes the growth to innovation, where entrepreneurs are identifying gaps in the market and continually developing new concepts in response to consumer demands.
As a leading South African business strategist, one of Clem Sunter's successful strategies for success in the current economic landscape is innovation, to create something new that people want. It appears that the growth in the fast food franchise sector bears testament to this.
However, implementing innovation strategies in a tough economic landscape often requires investment. While there has never been a more crucial time to make an investment in business, accessing bank funding has never been more difficult. Speaking at the May 2013 International Franchise Expo, FASA executive director, Vera Valasis, commented that one of the stumbling blocks to the advancement of franchising in the past five years has been access to funding, which has been severely curtailed by the recession.
Valasis' comment highlights the need for an innovative approach to financing the needs of entrepreneurs, who make up a crucial segment of our economy.
It was in response to this need for an innovative funding solution that Retail Capital successfully introduced the business cash advance product to South Africa and has to date advanced over R150 million to restaurateurs and retailers.
David Lewis, CEO of Retail Capital, attributes the success of the business cash advance to the fact that it is quick, simple and accessible. "With over 80% approval rate, flexible repayment terms and no requirement for security, the business cash advance offers entrepreneurs a funding solution that is tailored to their specific business needs."
If innovating to achieve meaningful business growth are the keys to achieving success in a tough economic environment, then it seems innovation needs to be implemented across the board, from business owners to the funding providers who support these entrepreneurs.
