JOHANNESBURG – Your article “Survey shows SA’s entrepreneurs are not thriving” (BR, August31) struck a chord with me.
As an entrepreneur who has navigated the South African business terrain for decades, there’s a distinct culprit I’ve found to be lurking behind this unfortunate phenomenon: a grave lack of entrepreneurial literacy.
It’s a ticking time bomb. And I’m not necessarily referring exclusively to textbook savvy.
Being emerging market entrepreneurs, many of us are driven by a need to make money and survive against the backdrop of a limping economy.
This often trumps the sheer passion for the product or service on offer, which is what mostly drives our First World counterparts and explains the disparity in business success rates.
With this diverted focus, our entrepreneurs become susceptible to numerous snares in their terrain - launching prematurely, incorrect pricing, employing the wrong people, and compromising on business values (or worse, not having them in place at all).
Chris Darroll, chief executive of the Small Business Project (SBP), confirms that in the Organisation for Economic Co-operation and Development countries, SMEs comprise more than 95percent of businesses, employ between 60 percent and 70 percent of the working population, and contribute up to 60 percent to gross domestic product.
But with a good dose of entrepreneurial literacy, I believe our entrepreneurs will be equipped to put critical pillars in place at the outset.
Crystal clarity about your own strengths and weaknesses as an entrepreneur is invaluable. Yet many of us ignore the need to take the time to pause and properly graduate from this critical step.
When you know your strengths and weaknesses as an entrepreneur, it also makes for groundedness with one and a continued pursuit of input and mentorship for the other.
And the benefits to both the individual and the intended business are immeasurable.
It allows the entrepreneur the much-needed self-belief in this fiercely competitive terrain, and lends the level-headedness required for informed choices around industry, product or service, and employees.
These entrepreneurs also seem more open to consulting specialists in their terrain, to maximise external expertise to the more efficient management of their businesses.
The importance of a good old Swot (strengths, weaknesses, opportunities, threats) analysis can’t be over-emphasised either.
The resultant 360° view lends critical insight into the relevant business terrain, revealing the potential pitfalls and how to proactively devise risk mitigation plans.
Far too many entrepreneurs also neglect their own self-development, to their peril. Investing in your ongoing personal development as an entrepreneur is critical. It expands your insight; stimulates creativity as far as new ideas and potential ventures go; and presents opportunities to keep up to date with industry trends, gain access to critical market intelligence, and meet, learn from and potentially collaborate with industry champions.
Entrepreneurs are increasingly faced with the challenge of having to do more with less, particularly in emerging economies like ours. But a shift in focus to becoming more business literate - with a dollop of streetwise smarts - will help our entrepreneurs to see opportunities where they previously seemed invisible.
So, yes, we’re in a technical recession, with our GDP having taken a 2.2 percent dip in quarter one. And as SMMEs we’ve had to contend with various impediments around accessing funding, bigger fish being unwilling to allow the smaller ones into the pond, and an ecosystem that’s largely broken.
We have untold talent and potential among us that is still to be unearthed, and each entrepreneur owes it to themselves to identify and maximise these. Waiting for the government or large business to reach out a hand, or to create the opportunities we want, can only result in dashed hopes. With unemployment rising globally, especially among the youth, the need for entrepreneurship is growing.
But this terrain comes with a unique set of challenges, the evidence of which is visible in the alarmingly low small business survival rates (with only 20 to 30 percent of local small business surviving the first five years).
I’ve met too many entrepreneurs who failed to see their own potential, throwing in the towel prematurely.
And as an entrepreneur with battle scars of my own, my empathy when it comes to the relevant struggles is not merely cerebral, it’s visceral.
According to recent findings by the Small Business Institute and the SBP, South Africa has only 250 000 formal SMEs, with formal SMEs accounting for 98.5 percent of the economy, but only employing 28 percent of the formal workforce. And the numbers are falling still.
Our SMMEs have a valuable contribution to make to the economic growth of this country, but we need to get on with empowering ourselves as far as possible, while anticipating significant support from the government and big business.
So let’s roll up our sleeves and head for those trenches, as an SMME community destined for success.
Robyn Lambrick is the owner of Word On The Street Media.
The views expressed here are not necessarily those of Independent Media.