Marketing & Media trends
- 10 predictions around fintechDominique Collett
- The 4 themes for the new yearAndrew Duvenage,
- 3 wealth management trends to watch in 2021Maarten Ackerman
- 4 strategies to rethink investing in SMEsKuhle Mnisi
- Microinsurance ready to reach new heightsMarius Botha
- Finding alpha in the age of Covid-19Nema Ramkhelawan-Bhana
- Purpose or profit. It's not a choiceMike Middleton
- Shifting towards a digital - but still human - approachHenry van Deventer
Construction & Engineering trends
- 3 major trends in the commercial property space in AfricaPeter Hodgkinson
- A bright horizon for South Africa's energy landscapeBarry Bredenkamp
- Achieving developmental goals through constructionCyril Vuyani Gamede
CSI & Sustainability trends
- Time for NPOs to show their real impactKeri-Leigh Paschal
- 5 sustainability trends that will shape business in 2021Christelle Marais
- 4 trends set to continue or be re-interpreted in the NGO sectorInnocent Masayira
- Strengthening NPO skills and processesNazeema Mohamed, Feryal Domingo and Soraya Joonas
- Sustainability is key for social investment in 2021Keri-Leigh Paschal
- 4 trends in employee skills development and training you need to know for 2021Siphelele Kubheka and Desikan Naidoo
Energy & Mining trends
HR & Management trends
- 4 areas in which your business can practice its swivelFrancois Kriel
- 5G is coming. Here's what it could mean for SASamantha Naidoo
- 3 big issues demanding legal attention this yearJonathan Veeran, Nozipho Mngomezulu and Burton Phillips
Logistics & Transport trends
Marketing & Media trends
- Tech democratisation will set the tone for 2021Andrew Smit and Johan Walters
- Auction industry survival depends on going virtualJoff van Reenen
- Covid-19 drives new trends in local property marketMarcél du Toit
- A bold year for beveragesAlex Glenday
- Acceleration of digital paymentsJonathan Smit
- Safety vs sustainability - the packaging industry's key conundrumNthabiseng Motsoeneng
- The evolving e-tail landscapeVilo Trska
#BizTrends2021: 4 strategies to rethink investing in SMEs
Last year proved that SMEs are the backbone of the South African economy. Yet, existing debt, lack of cash reserves, outdated financials, and an inability to operate during the national lockdown, forced almost half of South African small businesses to shut down.
Kuhle Mnisi, operator investor, Secha Capital
Moving forward, it’s essential that we rethink the way we invest in SMEs. While there has been an increased focus on funding tech start-ups in recent years, the most impactful investments are often the ones that have been overlooked by others. There are ways that funds can focus on creating a direct social and environmental impact, while still generating financial return. Here’s how:
1. Empowerment through job creation
Small businesses within the agribusiness and consumer good sectors create consistent, full-time jobs, yet they are often overlooked. The larger these companies grow, the more jobs they create. With South Africa’s high unemployment rate, it’s important that we invest in companies that have the potential to grow and create jobs for those who desperately need it.
2. Diversity and inclusivity
Making an impact doesn’t stop at job creation, but extends to diversity and inclusivity as well. Although we are making strides on gender equality within the entrepreneurship and SME sectors, women are still significantly underrepresented in these industries. Women, especially black women, often face more struggles when it comes to starting their own entrepreneurial ventures, with limited access to business networks and funding. As we enter into a new year, which will bring its own challenges for female entrepreneurs, it’s vital that we take active steps to support women-led businesses, by providing them with the capital and resources needed to succeed.
3. Investing for the long-term
Traditional venture capital funds have five to seven-year investment mandates. While there are advantages to this, it doesn’t always benefit the operating company, who are often forced to deal with new ownership structures and different strategic directions. Longer-term investments benefit both parties, ensuring consistency for the business and allowing funds to unlock value over an extended period of time. Investors are able to work closely with the small businesses, equipping them with the skills and knowledge required to accelerate growth.
4. Building businesses with purpose
Impact investing is an alternative approach to funding small businesses, which focuses on generating a social or environmental impact along with financial return. While many investors believe that there needs to be a trade-off between financial and social returns, there is a way to do well by doing good. From natural haircare products to locally manufactured biltong, we’ve learnt to target operating companies with sustainable business models and an intrinsic focus on a product or service that delivers social impact. These industries are often considered “boring” and are overlooked by other funders – however, every time a consumer buys or invests in this service, the money they spend stays local. This is vital to ensure economic stability for South Africa, especially during trying times.
About the author
Kuhle Mnisi is the operator-Investor in Secha Capital. After finishing her Master's in Development Finance at the University of Cape Town, Kuhle Mnisi joined Secha Capital as an operator investor. Directly involved in managing RUSH Nutrition, a South African producer of raw and organic energy snacks, as well as Secha's newest investments - Cultura Fresh, a hydroponic vegetable producer, and iG3N, an innovative energy solutions provider - she is interested in creating sustainable solutions to economic problems in Africa. She has previously worked at Goldman Sachs, PWC and Act in Africa.