Friday 12 August 2016

ENTREPRENEURSHIP NEWS

Small Business Friday aims to produce more women-owned enterprises

Small Business Friday (SBF) kicks off on 2 September 2016 and Mike Anderson, CEO and founder of the National Small Business Chamber (NSBC), says that the drive is not just to develop women from an economic perspective, but the bigger picture of reshaping the modern-day global economy.

“Women are underestimated powerhouses of an economy. This is not a fact that is relevant only to South Africa, but it is a global phenomenon. South Africa needs to not only build entrepreneurship, but to encourage and develop female business owners.

Small Business Friday aims to produce more women-owned enterprises

“Forbes says that what’s good for women is good for the economy and I think this is truer for South Africa than anywhere else right now. While we have many rural women who are already trying to be sustainable, we need to focus on developing our formal sector and boost female entrepreneurship and small business development.”

Together with title sponsor Nedbank, the NSBC and its SBF movement hope to encourage the support of local small businesses every Friday. He says it would be great if these businesses were also female-owned. “In the US, economists and academics agree that women entrepreneurs are an under-tapped force that can rekindle economic expansion. They are becoming more entrepreneurial and already own 36% of all businesses in the US.”

Access to capital

While progress has been made, he says that it is nowhere near enough, or at a level where it will make enough of an impact on social and economic issues. A recent study, by an international National Business Women’s Council, indicated that women-owned entrepreneurs raise smaller amounts of capital to finance their businesses and are more reliant on personal rather than external sources of financing.

Within the context of growth-oriented entrepreneurship, this distinction is important according to the council because growth-oriented businesses typically require substantial amounts of external capital in the form of both debt and equity. If women entrepreneurs do not seek, or if they are not able to obtain external capital, prospects for growing their small businesses are diminished considerably.

Three sectors offer opportunity

Locally, the SME Growth Index examines three sectors with growth and value-adding potential: manufacturing, business services and tourism. The Index claims that 21% of its panellists are women, but would like to see an increase in female businesses within these sectors. The multi-country Global Economic Monitor (GEM) survey has conclusively shown that businesses’ owned by women tend to be smaller than those owned by men, both in terms of turnover and number of employees. The findings from the SME Growth Index are consistent with this global pattern, finding that women-owned businesses generally have a lower turnover, and fewer employees, than those owned by men.

Anderson says that according to Stats SA’s latest Quarterly Labour Force Survey, women comprise 23% of South Africa’s total employers. “We have a fantastic opportunity to grow female-owned small businesses and the NSBC and Nedbank would love to see support for female entrepreneurs during August especially. Make Small Business Friday a mechanism to support women and help them become the economic force predicted.”

Nedbank also supports several initiatives, aimed at empowering women in business, such as the events through the Business Women’s Association, including sponsorship for the past three years of a an event to celebrate exceptional women in business and society.

On a broader level, as a bank, Nedbank was involved in a mutually beneficial Broad-Based-Black Economic Empowerment deal with its partners Brimstone and women’s empowerment firm WIPHOLD that concluded in 2015 on its 10th anniversary. However, as part of the deal, along with Old Mutual Group and its partner Izingwe, Nedbank, Brimstone and WIPHOLD continued with the relationship, agreeing to establish three sustainable legacy funds of R100m a year. Disbursement from the first fund established in 2015 has benefited a women’s agricultural initiative in the Eastern Cape.

For more information, go to www.smallbizfriday.co.za.

AGRICULTURE NEWS

Annual gathering to empower women in agriculture

Women farmers across Southern Africa are getting ready for the annual gathering of women in agriculture, aimed at strengthening the entrepreneurial capacity of women in this sector. The annual gathering will take place from 26-29 September 2016 and is organised by the Southern African Confederation of Agricultural Unions (SACAU).

William Creighton via Wikimedia Commons

Turning ambitious dreams into reality

SACAU CEO Ishmael Sunga has urged women to escalate their aspirations in agriculture. “We need to have ambitious dreams. Then we need to translate these dreams into reality. The sad truth is that many dreams are never realised due to poor execution of plans. As such, SACAU is focused on helping all farmers get the skills, knowledge, and access to resources to turn their ambitious dreams into reality,” said Sunga.

“There are numerous opportunities for women farmers to take advantage of in the business of agriculture. The stage is set for farmers to begin driving agricultural entrepreneurship across the continent,” he noted.

“We must move beyond conventional thinking of women empowerment. We must look towards technology and how we can take advantage of the agriculture value chain to grow women farmers in Africa.” He urged the sector to begin new conversations on gender in agriculture.

Addressing challenges faced by women in agriculture

“For agro-entrepreneurship to thrive, equitable access to production resources is needed by all - including women. We must ensure access to rewarding markets to all farmers, since markets are the pulling force for production,” said Sunga,

He noted that a conducive policy environment that will lead to the transformation of the agriculture sector was essential. In this regard, it was important to monitor government implementation of commitments to global instruments including the Malabo Declaration on African Agriculture.

The Malabo commitments have specified that Africa has to address the challenges faced by women that include limited access and control of ownership of land, limited access to agricultural labour, limited access to technologies and agricultural extension services, limited access to financial services, low productivity, and lack of adequate disaggregated data and indicators.

There are already several treaties for gender empowerment including COMESA’s initiatives on Gender and Women Empowerment and CAADP’s National Agriculture Investment Plans (NAIPs) which all have a gender component.

HARDWARE NEWS

Empowering the female technicians of the future

In the electronics repair industry, a field where 99% of employees are men, Samsung Electronics South Africa has begun making inroads into these numbers with its Samsung Women Technical Programme. The first 16 graduates of what will be an ongoing programme have recently begun working at Samsung's various service centres.

The Samsung Women Technical Programme is an initiative which started in November 2015, when 20 female students from previously disadvantaged backgrounds were chosen from a group of some 200 at the Samsung Engineering Academy in Ekurhuleni. These young women had already undergone training on Samsung’s various products and appliances and were then selected for the first ever training programme specifically for hand held devices.

“They were trained on how to repair various mobile device models, how to conduct updates to software, as well as the different aspects around fixing hardware. The idea was to turn these young women into qualified cell phone technicians,” says Samsung’s director: SSA service, Richard Chetty.

“The 16 young ladies who graduated from this course are certified to work on Samsung cellphones and they have been placed at a number of our service centres, where they will undergo a year of practical work in order to gain necessary and valuable experience. Following a final assessment, they will be certified as technicians, which will open up a meaningful career path to them.”

Focus on future development

Chetty adds that while similar training programmes have been established in the industry, there is also a tendency for the hosting company’s responsibility to end when the trainees start their careers. However, he indicates that Samsung believes in focusing on things for the longer term, which is why the organisation will remain closely involved in the future development and occupational paths of these graduates.

“Most importantly, these young ladies are merely the trailblazers of what we hope will become a flood of young female technical learners in South Africa. We are planning to have three intakes every year for women, although each intake will cover a different product focus area. For example, a course focusing on larger appliances will require the learners to have a valid driver’s licence. In this way, they will not only learn how to service the appliances, but will be trained and certified as in-home technicians,” he explains.

Chetty states that Samsung is considering the bigger picture with courses of this nature. They are designed to develop skills and create jobs and will even include training in aspects of entrepreneurship, so that future graduates have the opportunity to set up small businesses of their own.

“Samsung is committed to our responsibility toward our community and our goal of positively impacting on people’s lives. Our Samsung Women Technical Programme proves that job creation, skills development and women empowerment can be achieved. We want to encourage other corporate organisations to contribute to the economy and job creation by getting involved in similar schemes. Samsung is leading the way and we hope others will follow,” concludes Chetty.

SERVICES NEWS

Silulo Ulutho Technologies: A franchise built from the boot of a car

BY: LAUREN HARTZENBERG

Khayelitsha is said to be the second largest and fastest-growing township in South Africa, home to roughly 1.5 million residents, 75% of whom are under the age of 35. Half of its people are unemployed, living below the poverty line and more than a third have no easy access to water. But what may have seemed like challenges reserved for government or big business, high school teacher and resident Luvuyo Rani viewed as an opportunity for social innovation.

Luvuyo Rani, founding director of Silulo Ulutho Technologies.

Eyeing opportunity

Witnessing his fellow educators struggling to cope with the newly-introduced outcomes-based education (OBE) system without access to computers, Rani quit his job and began selling refurbished computers out of the boot of his car. This marked the humble beginning of Silulo Ulutho Technologies as it's known today. But Rani says the computers sold often ended up collecting dust in teachers’ homes, due to almost non-existent computer literacy.

The lack of infrastructure and services offered in the community meant that residents had no affordable access to technology and were forced to travel to outlying areas for simple internet access. He knew he had to extend his reach within the area. The realisation led to Khayelitsha’s first internet café in 2006, opened by Rani and his partners Nandipha Matshoba and Sigqibo Pangabantu.

The café provided members of the community with email and CV assistance, access to basic software packages and the internet. But this was the start of something bigger. “We realised that many people couldn’t differentiate between fax and email so we knew that people needed training badly,” Rani said during his talk at last week’s Internet and Social Media Summit in Cape Town. To address this deficiency, they established the first Silulo Ulutho training centre. Demand increased rapidly, and soon more of these one-stop IT shops were rolled out in other townships and rural areas in need.

Silulo Ulutho Technologies: A franchise built from the boot of a car

Key business

Fast forward 10 years, and the company now has 40 branches to its name scattered between the Western and Eastern Cape, offering computer and phone sales and repairs, web development, CV creation, printing, scanning, faxing, binding, lamination, typing of letters and computer training. 15 of these are franchised. Central to the business model is affordability, so prices are kept as low as possible to cater to emerging markets.

Rani says training is quickly becoming their key business as Silulo grows into one of the largest computer training organisations in the Khayelitsha community. 25,000 students have passed through the company’s training programmes, 80% of whom are female. Along with basic computer training, Silulo also offers certificates in office administration, graphic design, web design, end user computing, technical support, and digital video editing. He says that the training provided has greatly enhanced the possibility of employment, while some graduates become inspired to study further, and about 10% go on to start their own small business.

Cycle of employment

Sharing in Silulo’s success are the 178 staff members it employs, 60% of them being former students. Four of the 15 franchised branches are also owned by graduates. Commenting on this Rani says, “We need to share part of the cake that we’re baking with our people. They need to benefit from the model that we’ve built, and we need to produce other entrepreneurs through our work.“

He believes his entrepreneurial spirit was sparked at a young age assisting customers in his mother’s shebeen after school. And when the police raids ensued (as shebeens were illegal at the time), he says that taught him the resilience needed for the demands of running his own business. As the only black recipient of the Schwab Foundation Social Entrepreneur of the Year award, Rani asserts that personal triumphs must be highlighted. He says, “We need more entrepreneurs. As a country we need to create a culture of entrepreneurship and celebrate their success.”

Silulo Ulutho's story is certainly one worth celebrating.

RESEARCH NEWS

Big money in little spazas; accessing informal sector spend

There is big money in the little spaza; some informal sector traders earn six or seven digit annual figures, but this economic activity in South Africa is underreported, in some cases by as much as 1000%.

It is vitally important for brand owners targeting the mass market to understand how this sector operates and to appeal not only to consumers, but also to the informal traders.

Big money in little spazas; accessing informal sector spend

Estimating informal market spend

According to the UCT Unilever Institute report 'Connecting with Survivors', there are a number of different estimates of annual spend in the informal sector in South Africa. StatsSA puts it at R120bn, Haroon Bhorat (UCT) at R280bn and Loane Sharp (Adcorp) at R680bn – the UCT Unilever Institute estimates the annual informal market spend to be about R285bn.

Whichever figure is correct, this is significant, as marketers targeting the mass market who focus all their attention on the formal sector supply and demand chain, are missing out on huge opportunities.

The UCT Unilever Institute has estimated that there are 2,500 ‘chain stores’ in South Africa, 18,500 independent traders and 80,000+ spazas. According to Trade Intelligence, the independent wholesalers are worth R100bn a year (3% of GDP). The informal sector is growing and changing rapidly.

The mass market is full of consummate entrepreneurs, who are always looking for ways to supplement their income. Informal traders are often foreigners with little loyalty to South African brands and to have any traction in this market, local brands have to work hard to gain exposure - 76% of spaza owners in Soweto are foreign (HSRC) and in other parts of South Africa, the percentage is even higher.

“It is clear that social transformation is taking many different forms in the mass market and that previous assumptions no longer hold true,” states Lebo Motshegoa, MD of Foshizi, in an article in the Media Online.

Stokvels increase as young generation adopt the model

“One of the areas in which this transformation is most evident is in the financial services sector. While more people in the mass market now have banking and loan accounts, an altogether different trend is unfolding beyond the confines of traditional banking. A uniquely local institution, the Stokvel, is taking on an entirely new role, especially in the urban areas. Stokvels or savings clubs have been a feature of mass market money management for many years, but now a new generation of young black people are taking the concept into an expanded and even more empowering space,” says Motshegoa.

“The traditional savings clubs are being used by a younger, more educated and business-savvy generation in a different way and their knowledge benefits stokvel members in a different way. Stokvels have transformed into investment rather than just savings vehicles. People are often part of multiple stokvels for different purposes, some for big-ticket items. A larger and younger segment of the mass market is taking this traditional savings vehicle into important new territory.”

Old Mutual’s latest Savings and Investment Monitor reveals the importance of stokvels in an article on Moneyweb. “Informal savings vehicles and funeral policies remain the most popular savings and investment vehicles used by South Africans. Some 76% of black households surveyed make use of informal savings vehicles, which Old Mutual defines as stokvels, burial societies, grocery schemes and unbanked cash savings. Funeral policies remain the largest single savings category, while 41% of respondents said they have no formal retirement savings whatsoever.

“More than 70% of individuals earning R40,000 a month and more put money into informal savings vehicles every month. Old Mutual finds that there has been increased usage across all informal savings types. Stokvels remain the most popular, with 59% of black households surveyed contributing to at least one stokvel and those in higher income categories sometimes contributing to more than one. This is followed by burial societies (34%), grocery schemes (18%) and unbanked cash (18%).

“Contributions made by high-income and low-income groups to stokvels posted a year-on-year increase, while middle-income groups contributed considerably less and dragged the overall average down. The uptick among lower income groups may be because stokvels are now acting both as savings vehicle and personal loan provider, based on Old Mutual’s findings.”

Multi-generational households

The next trend that Foshizi explored was multi-generational households. Motshegoa says, “Another way in which young black people are re-defining traditional ways of life is by revisiting the concept of the multi-generational household – with a twist. Many professionals and office workers, who have been able to buy houses in the suburbs, find they long for the social structures and way of life in the townships, which are affectionately known as eKasi, an urban term for ‘home’.

“Many of the younger generation have moved back in with their parents or parents-in-law, but are expecting more equality. The net effect is that young working people are re-embracing their cultural and geographic roots, but at the same time redefining their roles within the extended family. From a consumer point of view, the additional income they are bringing in from renting out their suburban properties is raising the overall disposable income of township households in a significant way.”

Township life is not being abandoned, but it is changing rapidly and brands need to keep in touch with the transforming consumer landscape.

“All of this indicates how rapidly and profoundly the nature and character of the mass market is changing, driven in many ways by access to smartphones and the internet. For marketers of both products and services, this presents a wide array of opportunities, but it does mean that they need to keep their fingers on the pulse of changing trends and to understand that a new world is dawning in the mass market,” concludes Motshegoa.

One way of doing this is for brands to associate themselves with successful newspaper titles in the mass market that have reach across print, online and social media. In order to stay relevant to their readers, these newspapers have to keep up with the mass market. Ads24’s mass market titles,Daily Sun, Son, Soccer Laduma and Ilanga, are read by both traders and consumers in the informal sector and, with their digital properties, they have an unduplicated reach of 9.5 million.

According to Brad Aigner, MD of Freshly Ground Insights (FGI), “Advertisers can engage most effectively with the informal sector through these newspapers and their digital properties by being honest, consistent and committed. Do not try to pull the wool over this market’s eyes, because they will catch you. Commit to the mass market for the long term and they will commit to you.”

SKILLS TRAINING NEWS

Learnership programme to aid development of young professionals

With South Africa's continued skills deficit being compounded by a lack of technical skills, on-the-job training and mentorship should be a priority in each organisation. In a step to close this skills gap, REDISA has launched a Learnership Programme at its head office in Cape Town.

The 12-month programme, valued at R460,507, will provide learners with the opportunity to gain a recognised qualification while gaining work experience. The five selected learners, Dillan Little (19), Litha Plaatjie (22), Melissa Jacobs (19), Aphiwe Gaqa (21) and Nolukhanyo Sibonda (22), all went through an interview process that included Personality Assessment and Learning Style Assessment.

“The launch of this programme is part of our on-going efforts to promote skills development amongst the youth,” said Stacey Davidson, director at REDISA. “Mentoring is something I am passionate about, especially for young people. I think that the economic emancipation of young people cannot remain a song; it has to become a reality. This means that, as a country and as business, we must encourage our youth to prioritise education in order to pull themselves and their families out of poverty and hopelessness,” she said.

The programme will develop young minds by imparting knowledge and skills that further their education and experience across various industries and sectors. In order to gain a certificate, learners will be required to complete both a theory component and a practical component. The programme will follow a strict module plan which includes practical work experience. The learners will perform administrative roles while gaining exposure to key areas across the REDISA business.

In three years, REDISA has already seen 18 interns gain valuable experience, and 10 of them are employed permanently at REDISA and 8 have moved on to formal employment and other projects. “We look forward to continuing to work with our partners in government, business and trade unions, as well as consumers and NGOs, as we continue to create jobs and develop small businesses,” said Davidson.

HIGHER EDUCATION NEWS

UJ takes SA to Enactus World Cup 2016 in Canada

A student team, comprising of 884-members, from the University of Johannesburg (UJ) have been crowned the winners of the Enactus South Africa National Competition. The UJ team will now fly the SA flag at the Enactus World Cup 2016 in Toronto, Canada on 28-30 September 2016.

Enactus University of Johannesburg: Enactus South Africa National Competition winners

The Enactus University of Johannesburg team, made up of students from various UJ faculties, competed against 21 South African universities in Johannesburg last week. The team’s projects explored solutions to the mounting unemployment crisis through enterprising business innovation.

Their entrepreneurial stealth demonstrated in reinventing strategies, finding innovative solutions to complex real-world issues and well-executed presentations clinched them the prestigious title.

The Enactus University of Johannesburg team was lauded for two multi-stakeholder engagement projects – an urban farming project and a project aimed to create entrepreneurial opportunities for refugees.

Under the stewardship of Joyce Sibeko (Lecturer in Business Management, UJ), and Christa van Zyl (Lecturer in Communication Design, UJ), the team embarked on a multi-stakeholder engagement project that aims to create opportunities for urban agriculture in a sustainable food system in Soweto. Amidst a global concern over food security, this project highlights the impact of urban farming.

In collaboration with Dr Naude Malan (Lecturer Development Studies, UJ) the team was instrumental in providing a platform for entrepreneurs to satisfy a customer base in their own community. The Izindaba Zokudla (Conversations about Food) project was established as a result.

“The Izindaba Zokudla project advocates specific approaches to urban agricultural development in Johannesburg. It draws on participatory research to build the capacity of farmers’ organisations; to facilitate engagement with food enterprises in the city; and to use design and technology development as a means to improve agricultural practices,” said Sibeko.

“The project not only markets urban farmers in Soweto but also increases the urban farmer’s opportunities for retail,” she elaborated.

Another global challenge that the UJ team tackled is the refugee influx into economies. The focus is on the development of a business model to secure a sustainable stream of income for foreign nationals in Johannesburg and Pretoria which could curtail xenophobia and be exploited in other global societies.

“Looting and xenophobia attacks on foreign nationals were some of the reasons for the Enactus UJ team to explore solutions to better the standard of living within our communities. Training on how to run small informal trading outlets were held in Gauteng. The team assisted foreign nationals with business plans that enabled them to generate start-up capital,” she said.

“Our students’ performance was exceptional, as the level of competition was incredibly high. Our team competed against teams representing top South African universities,” says Sibeko.

At the World Cup Competition in Canada, they will go up against the national winners from the 35 other participating countries. Each team will be given 17 minutes to showcase their projects to the judging panel of business leaders, which includes J.P. Bilbrey, president and CEO of The Hershey Company, Andrew Cranston, global chief operating officer of KPMG International and Kees Kruythoff, president of Unilever North America.

For more information on the Enactus World Cup 2016 in Toronto, Canada, visit:
www.enactus.ca/enactus-world-cup-2016/

Africa Biz