It is argued that Small Businesses are key to unlocking economic opportunities as well as achieving inclusive growth. Especially in South Africa where the rate of unemployment is has increased to 25. 5% from 25%. As a result, this call for agency in building more start-ups is a way of trying to alleviate the pressure the government is facing from millions of South Africans who are living in poverty who are desperate for improved living conditions.
Last year, the minister of Small Business and Development, Lindiwe Zulu stated that as the government, they are very open and receptive to new policy ideas that will help accelerate the formation of new businesses and sustainability of existing ones. As a result, the government’s intervention policy is aimed at ensuring that small enterprises continue to grow into thriving businesses that are also sustainable. Furthermore, Zulu explained that government will focus on providing financial and non-financial support, as a way of reducing obstacles that small business entrepreneur’s face when attempting to start their businesses.
Recently, South Africa has seen an impressive real estate business start-up venture which was launched in November last year by long –time friends Marcel du Toit and Harry Hattingh. The idea for this business came when Hattingh was working as a real estate broker in Johannesburg. Lattingh thought of a way to better sell properties than the ordinary way. The plan was to set up an online that would deliver efficient and excellent customer services. However since then, the idea was revised and changed into Leadhome. The trick, according to du Toit is to provide clients with the best service and outcomes for the lowest possible fees.
The self-funded company operates on a fixed fee instead of a traditional commission. The realtors charge a fee of R29, 995 (excluding VAT) and this amount is charged regardless of the size of the property being sold. Du Toit explained that in their experience it takes as much work to sell a R100 000 home as it does to sell a R10-million home; just because your home is worth more, you shouldn’t be penalised in the form of a high commission. Likewise, you shouldn’t be short-changed on service because you don’t live in a Sandton penthouse.
How to succeed in the Small Medium and Micro-sized Enterprises
Motivational Speaker and Entrepreneur, Vusi Thembekwayo provides a simple steps for entrepreneurs to follow. He suggests that entrepreneurs should firstly, “follow the money” by this he means that when customers walk past your store, and buy from your competition, as an entrepreneur you need to follow them. This will help you find out what your competition is offering, that you don’t. And Thembekwayo adds that the answer to this question is simply that entrepreneurs need to rethink their pricing and add products that attract customers. Secondly he adds that entrepreneurs should “believe the hype” for instance, when a new entrepreneur enters the market and you hear your target market speaking about them, as an entrepreneur you need to be willing to listen, learn, adapt and act. Also, Thembekwayo adds that this helps you the entreprepreneur to have an opportunity to accentuate services and be able to differentiate what they offer the market in order to remain relevant and interesting to the customer.
Another important factor that he suggests is humility, yet remaining vigilant and aware. For example, feedback from customers is very good, even though it can be hard to swallow and digest.
“To listen, we must first intend to hear. To hear, we must be open to learning. To learn, we must humble ourselves to the idea that we don't have all the answers,” he explained.
Currently, South Africa has local councils that provide procurement and sometimes form partnerships with small businesses to deliver services. Since the second National Small Business Conference organised by the DTI in 1998, the promotion of SMME’s has been the government’s objective. The country has seen many departments have specific strategies in place, for example developing SMMEs in the tourism sector, or developing small and emerging contractors by Housing and Public Works, Land and Agriculture, Arts and Culture.
However despite the effort to grow more start-ups, the challenge facing SMME’s is funding or access to capital. This is because most commercial banks do not regard many people credit worthy or bankable. Therefore, the government has to create an environment where entrepreneurs can access finances.