SA needs entrepreneurs now more than ever

Manny Nichas

With sustained weakness in the economy, continued pressure on consumers and growing numbers of job cuts, reliance on the usual notion of traditional employment amounts to nought. The Mozambik group has seen 29% year on year growth with similar numbers forecast for 2020.

“Small to medium enterprises are the absolute key to re-igniting growth in South Africa,” says Nichas, and calls on both government and the private sector to refocus their attention.

“Lip service and slogans do not create opportunity and action speaks louder than policy.” He adds that the barrier to entry when it comes to funding startups or working capital for growth remains high. “I really hope that the upcoming budget turns its attention to driving the economy from the bottom up. While the attraction of foreign direct investment remains critical, equally if not more so the development of our home-economy requires major attention.”

What is the State of Entrepreneurship in South Africa?

18 Dec 2019

The Mozambik brand started off with a single store in 2005 and has grown to 17 outlets, with plans to double this by 2023. In 2019 alone the group has seen 29% growth in revenue. “In the process, we have created 450 direct employment opportunities with a further catalytic impact of circa 1000 jobs.

“This may seem insignificant in isolation but imagine 10 000 entrepreneurs each creating 100 jobs in every city. Government, financial institutions and development agencies should get this notion in their crosshairs.”

If a business plan has legs, fund it.

“South Africa no longer has the luxury of creating hurdles for entrepreneurs, neither should institutions, financial or otherwise, drag their feet when considering applications. “For entrepreneurs, time is money and funding the biggest challenge of them all. So, while many advertising slogans promise a helping hand, the truth is that sans skin in the game (own funding) an entrepreneur has a next to zero chance of funding a startup. Franchising could present itself as one of the solutions given existing support structures, proven business models and returns.”

He asks: “How many great ideas lie stored in some institutional archive along with missed opportunity?”

Nichas adds that a solid business plan that supports a good idea is a very real contribution and has a monetary value. It should be a key criterion in lending.

“While not all startups succeed, perhaps government should consider SMME guarantees to financial institutions. After all, imagine if the billions in guarantees for SAA alone was redirected and assisted in backing startups. Imagine the economic benefit we would have tasted by now.”

“We can live with load shedding and we can survive potholes, but South Africa cannot survive without entrepreneurs. We need a Whole of State approach to creating an environment conducive to entrepreneurship, foreign direct investment and creating employment. What we don’t need is another ad campaign, poster or slogan that talks the talk but never walks the walk.”