Tshepo Phakathi – CEO of Phakathi Holdings, Xhanti Payi – Economist at Nascence Advisory and Research, and Dumisani Bengu – Head of Franchise and Enablement, Business Banking at Barclays Africa, opened the #BuyaBusiness Expo and Small Business expos with a panel discussion on factors influencing small business success in South Africa today.click to enlarge
This is according to business experts opening the annual #BuyaBusiness and Small Business Expo at the Ticketpro Dome in Johannesburg.
Tshepo Phakathi – CEO of Phakathi Holdings, Xhanti Payi – Economist at Nascence Advisory and Research, and Dumisani Bengu – Head of Franchise and Enablement, Business Banking at Barclays Africa, opened the three-day business expos with a panel discussion on factors influencing small business success in South Africa today.
Phakathi noted that South Africa ranked low on the Global Entrepreneurship Monitor, with only 7 in every 100 adults starting a business. “In contrast, 37 of every 100 in Cameroon start a business,” he said.
The Global Entrepreneurship Monitor reported this year that South Africa’s rate of entrepreneurial activity is a mere quarter of that seen in other sub-Saharan African countries, and in 2014 dropped by a staggering 34% (from 10.6% to 7%). It said the typical South African entrepreneur is male, 25 – 44 years of age, lives in an urban area, is involved in the retail and wholesale sector and has a secondary or tertiary level of education. The experts said addressing South Africa's unemployment and boosting small business required a greater focus on education. "72% of unemployed South Africans don't have matric," Phakathi said. "Therefore, we need a long term strategy focused on education. In the shorter term, we need to look at getting people skilled."
Payi said South Africans today do not appear to have an entrepreneurial mindset, and that a new focus on business culture had to emerge: “As we became more aspirational, we started thinking the best thing for us would be to work for a big company.” However, he pointed out that in the past, South Africans had tended to run micro enterprises. This indicated that an overly formalised business development environment was not necessary. “It’s possible that regulations are starting to make it harder for very small businesses to start up. We need to step back and allow people to be entrepreneurial,” he said. “Government should facilitate business development, but not govern behaviour. And we need to get past the mentality that says ‘government should do something for us’,” he said.
Access to funding, commonly cited as a key challenge facing start-ups, is not as big a challenge as would-be entrepreneurs think it is, said the panel. The real challenge was making a business case for the funding.
Bengu said Absa saw many would-be entrepreneurs seeking financing, but that not all had a carefully considered business plan. Where they did, he said, the bank stood ready to assist. “You have to have a bankable business plan,” he noted. He recalled a client whose first business plan was written out in lead pencil, but proved to be bankable. “We funded the business and supported it, and it has grown tremendously,” he said.
The business experts agreed that knowledge and education were crucial for small business development and success, however. Payi said: “The education system needs to be more strategic – it needs to package education in such a way that it helps people to think and present ideas, and prepares them for business.”
Phakathi added: “While there is a great deal of information available out there to help small business succeed, we should not confuse availability with accessibility. Just because people can find the information does not mean they understand it. This brings us back to the importance of education.”
Carol Weaving, Managing Director of Thebe Reed Exhibitions Decades, echoed this sentiment, saying that over decades of presenting the small business development expos, Thebe Reed had noted a growing need for actionable information and knowledge sharing. “As a result, the co-located expos now present in-depth workshops across a broad range of strategic and practical business topics, as well as facilitating networking between entrepreneurs, business support services and investors, giving small businesses access to the information they need to grow sustainably.”The Small Business Expo and co-located #BuyaBusiness Expo, staged by Thebe Reed Exhibitions, are now underway at the Ticketpro Dome in Northriding Johannesburg. Running from the 8th -10th September, the expos are a hub for all businesses, partners, investors and customers. Small Business Expo, in partnership with Eskom is devoted to the development and growth of small and medium enterprises by providing an opportunity for them to market themselves and interact with corporates and investors. #BuyaBusiness expo connects entrepreneurs and investors who are looking to grow, diversify or enter business partnerships with one of the many business and franchise opportunities to be showcased. Valuable information sessions, workshops and business networking opportunities will run throughout both expos.
For more information, go to www.buyabusinessexpo.co.za and www.smallbizexpo.co.za