Five out of seven small, medium and small businesses in South Africa fail within the first year. Photo: Getty
Entrepreneurship is said to be the key to South Africa’s economic recovery – and the good news is that all signs point to growth.
According to the Global Entrepreneurship Monitor (GEM) 2021/22 report issued by the Stellenbosch Business School, there is a significant increase in the number of business start-ups in South Africa between 18 and 64 years, with “quick-stage” defined as the setting. on a business or running a business for at least three years.
Claire Klassen, financial education specialist at Momentum Metropolitan, says that the emergence of this new wave of business, micro-entrepreneurial and side-gigging activities is due to necessity.
“In the wake of Covid-19, South Africa’s unemployment increased significantly, as many businesses were forced to close or lay off workers. Young people were the most affected, because they were often exposed to the areas affected by the disease, such as services, hospitality and shops. With less work experience under their belts, they are often the first out when companies cut jobs.
Klassen said that South Africans are generally resourceful and, with the receipt of a vital income for living, many began to look for new ways to make money.
Interestingly, the GEM report also analyzed social attitudes towards business, and found that 81.8% of respondents felt that business is a good career choice, while 20% of those who did not have businesses had commercial purposes.
Despite encouragement, five out of seven small, medium and micro businesses in South Africa fail within the first year. We need the right way to see the rise now in the beginning of business activities to get economic success. We are in a window of opportunity, and it is time to rest.
So what resources are available to business owners to help set them up for success?
Klassen offers a lot of advice for those thinking of starting their own business or side.
Be financially savvy
It is important to have good financial knowledge and understanding of what is involved in running a business.
“It’s important to raise money to cover business start-up costs, such as an emergency fund or fundraiser to help keep the lights on when the lights go out. It’s your business.”
There are tools online to help increase your financial literacy. Made with Majolas is a free online finance course, with its latest business-oriented edition.
“It teaches basic financial concepts that entrepreneurs need to understand, such as writing a business budget, tips for dealing with customers products and the importance of putting together a solid business plan – all wrapped up in an inspiring, easy-to-follow format. story structure,” Klassen said.
“The Metropolitan also hosts a Facebook group, MetroKickStarz, which is dedicated to helping new entrepreneurs through its financial education program. I recommend entrepreneurs to join this community, which provides the opportunity to interact, share ideas and get valuable knowledge and other resources for free.
He added that it is important for entrepreneurs to plan their own money as well as business, and not to mix the two.
“Seeking the advice of a financial advisor will help you make better decisions and protect your business.”
Learn from those who did
Klassen said that those who want to start their own business research similar companies or businesses that have been successful.
It is important to understand why they work, what makes them different from their competitors and what they are good at – or not good at.
“Find out more about the founder and do some research on their habits. Do they believe in continuous learning? Maybe they have principles or a philosophy they live by that guides them. Understanding in what is involved in starting and running a company – and the small daily habits that set you up for success – will make a significant difference in the course of your own business,” he said.
There are free ads and network ads that target specific businesses; a quick search online will allow you to find out what is being hosted in your community.
“Participating in these events will give you a valuable opportunity to network and learn from experienced business leaders.”
Take advantage of available financing opportunities
The government sector has made available many plans to benefit the entrepreneurs.
“Visit the Industrial Development Corporation website or the Small Enterprise Development Agency website to apply for business financing.”