SA’s premier entrepreneurial competition marks 30 years of celebrating entrepreneurial excellence in Durban

Amid the current political optimism, entrepreneurs should be especially inspired by the continued commitment to SME support which emerged as a consistent theme in both the 2018 State of the Nation Address and the National Budget Speech. This is according to Kobus Engelbrecht, spokesperson for the 2018 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, who believes that this continued focus evidences Government’s recognition of the vital role played by entrepreneurs in enabling economic growth.

Speaking in light of the launch of the 2018 competition in Cape Town today, Engelbrecht says that this long-deserved recognition of the SME sector only further validates the competition’s unwavering commitment to celebrating excellence in entrepreneurship and fostering future economic growth.

“Now in our 30th year, this renowned competition continues to pay homage to the fearless South African entrepreneurs who dedicate themselves to their enterprises and businesses: driving growth, combatting unemployment and contributing towards the country’s economic development. It is therefore wonderful to see the public sector taking the required steps to improving the environment in which these entrepreneurs operate in order to promote further growth in the sector.”

Christo Botes, executive director at Business Partners Limited (BUSINESS/PARTNERS) has been involved in the competition since its inception in 1988, “Looking back over the last 30 years, this competition has evolved from an internal competition that recognized BUSINESS/PARTNERS’ clients only, to a nation-wide search for outstanding South African-based entrepreneurs, with Sanlam as our valued partner.”

He says that the competition continues to reward successful local business owners for the valuable contributions they make to grow their local communities and economies, and aims to inspire others to do the same. “As our 30th- anniversary year, we’re hoping to see even more entrepreneurs enter. The competition is open to all South African-based businesses and prizes are awarded for the following categories: Overall Entrepreneur of the Year®, Emerging Business Entrepreneur of the Year®, Small Business Entrepreneur of the Year®, Medium Business Entrepreneur of the Year®, Job Creator of the Year and Innovator of the Year,” says Botes.

Engelbrecht adds that this year, the 2018 competition will also recognize a South African entrepreneur for a Lifetime Achievement award. “The purpose of this specially nominated award is to recognize an entrepreneur who has made a significant contribution to the South Africa economy and has grown their business from start-up to large-scale, perhaps even multi-national corporation. We want to reward the individuals who have dedicated their lives to building our economy and inspiring others to do the same.”

The 2018 Entrepreneur of the Year® competition, sponsored by Sanlam and BUSINESS/PARTNERS, offers prizes valued at over R 2 million, which includes cash prizes of R 70 000 for each main category winner, and R200 000 for the overall winner. Competition winners will also receive valuable mentorship support, networking opportunities and national media exposure.

Engelbrecht says that in celebrating 30 years of searching for entrepreneurial talent in all sectors of the economy, the competition remains fiercely committed to its cause in 2018. “The judges are looking for entrepreneurs that have succeeded against the odds, either by carving out a niche market for their product or service offering, or by succeeding in a very competitive environment. Perseverance and endurance, innovation and agility are some of the qualities we look for in the entrepreneur.”

Engelbrecht adds that there are also a number of quantitative competition measures, such as turnover growth, profitability, owners’ equity growth, positive cash flows and job creation that play a part in the competition’s judging process.

Entrepreneurs are encouraged to enter the competition and can do so by downloading the entry form online at www.eoy.co.za. They can also interact with fellow entrepreneurs, past winners and entrants on the competition’s social media platforms www.twitter.com/@EOY_SA and www.facebook.com/EOY.SA. The closing date for the competition is 31 May 2018.

Most attractive sectors for entrepreneurs in 2017

2016 was a tough year for many South Africans – and small businesses took a hard knock as the local economy experienced many challenges to overcome. Despite this testing environment, there are certain sectors that are ripe with opportunity for astute entrepreneurs to capitalise on in 2017.

This is according to Christo Botes, spokesperson for the 2017 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, who identifies technology, communication and education as some of the sectors that are set to grow in 2017. “In addition to the sectors that traditionally perform well in South Africa, such as tourism, there are definite opportunities being identified in other, less traditional sectors which show ample entrepreneurial potential.”

Botes says that the first of these thriving sectors is telecommunications. “Currently, there is a lot happening in the telecoms sector, with the expanding national rollout of fibre driven by the growing uptake of bandwidth-intensive applications. This has opened up a host of opportunities, ranging from the implementation of cables to technical support services. As bandwidth speeds increase, we’re seeing the integration of technology, communication and entertainment to form a whole new industry that has really taken off in South Africa and represents a major growth sector.”

Another industry that Botes says shows great potential for South African entrepreneurs is the private education sector. “Internationally, statistics show that around 10% of all schools are privately run. As there are about 26 000 schools across South Africa, and only around 1 600 of those are private, there is currently a market capacity for about 1 000 private schools to be opened in the next few years.”

He adds that locally the demand for private education is on the rise, and that there is an increase in the number of entrepreneurs moving into this space. “In addition to being an area that exhibits great potential for profitability, the education sector is also attractive in terms of its social and economic factors. Our country has a major skills shortage which can only be effectively tackled by the increased accessibility of quality education.”

Botes goes on to say that 2017 will also likely see some recovery in the struggling sectors of mining and agriculture. “At the end of 2016, there was already some indication that the mining sector was making a comeback, as commodity prices stabilised and, in some instances, even increased. It is also predicted that there will be more rainfall in the coming summer season which will be welcomed by the agricultural sector, having suffered some of the most severe drought conditions ever in 2016.”

For entrepreneurs looking to make their dreams a reality in 2017, Botes offers the following advice: “Firstly, remain positive and don’t get despondent. Don’t allow your dream to go wasted because of challenging factors. Secondly, seek guidance from seasoned entrepreneurs who have already made their way around the block to avoid repeating their mistakes. And finally, do your due diligence, but don’t wait around for someone else to make the first move – business conditions will likely get tougher as the industry becomes more crowded.”

Unemployment remains the country’s greatest economic and social challenge

“South Africa should be tackling the rising unemployment rate by facilitating and driving entrepreneurship.” This is according to Christo Botes, spokesperson for the 2016 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, who was speaking in light of the recently released unemployment figures.

Statistics SA yesterday revealed that unemployment increased to 26.7 percent in the first quarter of 2016, up from 24.5 percent in the previous quarter, making it the highest rate since the labour force survey began in 2008.

“With rising interest and inflation rates as well as low growth expectations for South Africa – expected at 0.6% this year and 1.2% in 2017 – local businesses are increasingly facing the pressure and this impacts employment levels.”

It is during such challenging times where entrepreneurs can play a significant role in driving economic growth, says Botes. “Despite slow economic growth, South Africans have proved to be resilient and standing together in times like this.  Entrepreneurs are ready to capitalize on opportunities and society at large needs to dedicate more resources to identify, facilitate and promote entrepreneurship as the answer to creating jobs and wealth for all. Entrepreneurs and small business are typically more nimble and flexible to capitalise on the gaps created in the market from economic difficulty.”

Botes adds that he welcomes President Jacob Zuma’s recent announcement of a plan for government and business to set up a joint fund to support small businesses as part of Government’s short-term interventions to boost economic growth. The joint fund is expected to provide funding and support for entrepreneurs. The private sector already committed R1.5bn towards this joint fund and it is expected that government will match this amount to start off this fund with R3bn in total.  It is expected that this fund will be expanded to R10bn in the near future.

He acknowledges that entrepreneurship can be daunting, even for those seasoned business men/women with years of business knowledge, and that is the reason such initiatives – as mentioned above – are needed in the country. “While very rewarding, entrepreneurship is also a tough journey, and entrepreneurs need to be supported to grow their businesses to levels at which they can positively contribute to job creation and economic growth. The country needs to be providing the right guidance and infrastructure to motivate and encourage entrepreneurs to embark on their own business.”

Scaling up your business: When is it the right time to expand?

The urge to convert and scale up a small business to a medium to large enterprise is one of the most common goals among business owners. However, contrary to popular belief, scaling up a business is not just a goal for most entrepreneurs, but also a necessary step to running a business successfully.

This is according to Christo Botes, spokesperson for the 2016 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, who says that many entrepreneurs incorrectly believe that their business will grow organically, and that the necessary resources can simply be added to match current demand.

He explains that once a business has grown to a certain size, the owner must consciously choose to scale up rather than simply reacting to a growing market share.

When facing this cross road, Botes says that the entrepreneur should first consider the true reason for wanting to scale up before doing so. “Businesses often want to scale up to become self-sustainable, but starting this process without the necessary preparation and research can be detrimental for a business, as growing too fast can backfire.

“Upscaling a business is a lengthy procedure that involves complex introspection at almost every level. Business owners should be cautioned against the temptation to grow too quickly, and should aim rather to grow sustainably to ensure that the business continues to be a viable operation. As part of this sustainable growth there should also be a good balance between the management of regular operations and the expansion.”

Apart from the various processes and measures that need to be put in place to grow a business, it is crucial that business owners also adapt their mind-set. “Small business owners need to stop thinking and acting like a small business, but rather as a medium-size business and be cognisant of the fact that forward planning and measures – from anticipated turnover and management structure, number of jobs that can potentially be created and improving business processes – will need to be addressed in order to achieve the business results needed to run and maintain a larger scale business. Planning for revenue growth is a good example of the necessary forward planning that needs to be considered, as growing revenue by 10% is considerably easier when you have an annual revenue of R10 million in comparison to turnover of R30 million.”

Botes adds that entrepreneurs need to carefully assess their execution strategy. “While a brilliant product or service offering can increase competitiveness and grow market share and revenue, a clear and achievable execution strategy will ensure ongoing success. A business owner will need to deliver on his/her intent of taking the business from a small operation to a mid-sized business.”

Cash flow is another aspect, says Botes. “The business owner must have a clear idea of cash flow and have accurate forecasts in place. With growth and expansion, larger volumes of money and transactions will need to be closely managed.”

Most importantly though is the need to return to the original vision of the business. “Having a clear vision in mind makes internal and external changes less distracting from the broader business goals,” concludes Botes.

Botes provides four key aspects for business owners to keep in mind before committing to an expansion plan:

  1. Set goals: Business owners should create a list that details why they have made the decision to scale up their business. These should also be linked to the business’ goals, with at least one overall long-term goal (achievable in 15 – 25 years), as well as short-term goals (achievable in 3 – 5 years) which will serve as tangible measurables for the long-term goal.
  2. Have an implementation plan: This plan should list actions that must be taken with responsible persons allocated to each action. Empowering the team of staff to manage their own tasks and responsibilities is vital, and business owners should take heed to equip all staff to effectively work toward one, collective goal.
  3. Analyse the finances: Before embarking on an expansion journey, entrepreneurs are advised to increase their financial reserves. Each business’ cash conversion cycle should provide a good indication of how long an investment takes to convert into a return – the shorter this timeframe, the better.
  4. Communicate: One of the most important aspects during an upscaling journey is to communicate with staff throughout the process. Business owners should keep the whole team informed of the vision, strategy and steps of the process. This will ensure that all parties feel involved and are encouraged to work towards achieving this one common goal.

Finding the silver lining in the dark economic cloud

While the country and the world may be facing economic woes, it doesn’t mean it is all doom and gloom for South Africa’s local entrepreneurs. This is the sentiment of Christo Botes, spokesperson for the 2016 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS.

“South Africa faced a number of challenges over the past 12 months, including a weakening rand, ongoing power shortages, student protests, and growing water crisis. This year also began with its own trials as we saw the rand weakening further plummeting to an all-time low, and the enduring water shortages remain a major threat to various industries,” says Botes.

Botes says that this signifies that each year has its own set of challenges, yet at the same time, also brings new opportunities and business prospects for entrepreneurs to capitalise on. “Now more than ever, entrepreneurs should take charge and carve out their own futures by seizing the opportunities available to them.”

Given the current tough economic conditions facing South Africa, Botes provides a few considerations for local entrepreneurs to keep top of mind:

Entrepreneurs should prioritise refining their product and service offerings. As consumer spending power declines due to the various economic woes, businesses ought to be conscious that spending is stretched due to the increased costs of living and consumer debt. One method to retain clients in tough times is to provide unbeatable levels of customer service. Implementing activities and measures that create a greater customer experience and improve service levels will dazzle clients and ensure they remain loyal.

Re-evaluate the business’ financial standing by reviewing your pricing strategies, and, where possible, cut prices to attract more customers and increase profits. If a specific product or service offering is resulting in a loss, it might be time to forgo this aspect of your business. A key trait of a successful entrepreneur is knowing when to walk away from deals that are not beneficial to the future growth of the business.

As the cost of debt is likely to increase in 2016 we encourage entrepreneurs to consolidate existing debt and to avoid accumulating further debt to expand the business. Given the tough trading conditions, it is important to conduct business within your means, and tighten your cost management systems.

Involving your employees in the business’ outlook is key during challenging times. Be transparent regarding industry developments and any changes within the business, such as the unlikeliness of revenue growth during such a time. This is also an ideal period to encourage your employees to be more innovative with strategies that will increase turnover, cut costs, and propose new product offerings that are complementary to your offering.

Be conscious of market shifts. We have witnessed devastating effects as a result of the ongoing water shortages in various rural areas, with mining and agri-processing activity and profitability taking a knock. This has resulted in little to no economic activity within these sectors, and as such consumer spending is extremely low in these areas. Entrepreneurs should therefore opt for opportunities in urban cities where spending is not as reliant on mining and farming activities.

Explore the industries that are presenting entrepreneurs with growth opportunities. South Africa’s weakening currency is increasingly attracting foreign tourists due to the favourable exchange rate albeit the sector experienced some challenges in 2015 due to travel policies which have since been revised. Entrepreneurs who operate in the tourism sector, and related industries – such as retail – ought to re-engine their offerings to target foreign tourists. Given the exchange rate, businesses operating in the manufacturing sector should also research opportunities to develop products for export markets, as well as investigate developing products that have previously been popular in offshore markets.

Implement cost-cutting strategies by making use of energy efficient resources in your business.  Going green within your business processes can also prove to be a great cost-cutting strategy. While there is an initial cost for implementation, this will save the business money in the medium and long term. Such initiatives include low energy equipment that makes use of the sun or wind to operate and rechargeable batteries. Better waste management is another opportunity to not only cut costs, but generate revenue. Sorting waste, such as paper and bottles, in your business is a reality, and instead of paying for waste removal, business will be paid for their waste.

“While the year may have started on a gloomy note given the headlines in the media, we encourage entrepreneurs to remain positive and continue working towards achieving their dreams and aspirations, remembering that one can still find opportunities to build on, even at a time when things seem dire,” concludes Botes.

What measures need to be taken to improve entrepreneurship levels in South Africa?

The latest South Africa Global Entrepreneurship Monitor (GEM) 2014 revealed that entrepreneurial activity in South Africa is not sufficient, and is not in line with other sub-Saharan African (SSA) countries, nor the rest of the world – despite the level of activity increasing marginally over the last 10 years.

While the country has a good infrastructure and banking system, both of which are enablers of entrepreneurship, South Africa is faced with many other constraints hindering the growth of entrepreneurial activity.

South Africa’s largest problem is unemployment – officially reported as 26.40%. It is however believed that this figure is largely understated as it doesn’t include the percentage of the population underemployed – earning very low wages – as well as the discouraged unemployed workers who have stopped reporting their unemployment status, and are therefore not included in the official statistics. It is therefore estimated that the unemployment rate could be as high as 45%, and youth unemployment even higher.

Over the last few years, the private sector’s employment levels have not grown, each year either remaining at the same level, or shrinking. In order to improve unemployment levels there needs to be a call for the sector to become more involved with initiatives contributing towards growing the pool of interest in entrepreneurship.

While Government has implemented several initiatives to improve entrepreneurship, the most successful have been supported by only a few select private companies. Enterprise development and entrepreneurship must therefore be seen as a key area that can unlock growth.

When considering a statement by Small Business Minister Lindiwe Zulu on the aspirations for the Ministry of Small Business Development – “All of us must accept that we carry a joint responsibility to re-distribute the wealth of our nation” – it is hoped that civil society and Government will consider ways and means to ‘crowd-in’ the business sector’s considerable resources, skills and capacity to foster sustainable development.

There are six fundamental policy, legal and regulatory tools which Government can make use of to ‘crowd-in’ and engage the private sector:

  1. To celebrate, encourage and foster entrepreneurship – both commercially and socially – as one of the most noble human endeavours of all. This is the core to the reasoning behind the Sanlam / Business Partners Entrepreneur of the Year® competition, and during the competition’s 27 years existence; we have strived to promote entrepreneurship as a viable, and rewarding career choice.
  2. Develop a SME-friendly, and business in general, enabling environment with fair, clear, stable and predictable policies, laws and regulations uniformly implemented across the different tiers of Government as found in most countries. This will mean that the private sector is protected and won’t be surprised with new regulatory compliance issues.
  3. Foster, encourage, regulate and police competition between businesses, with significant sanctions being enforced for uncompetitive behaviour.
  4. Reduce the proverbial red-tape which often places onerous burdens on entrepreneurs to register businesses, obtain business/trading licences, obtain tax compliance/clearance status, to list a few. Such compliance can discourage individuals from pursuing, or continuing, entrepreneurship as a career due to all the red tape.
  5. With governments being the single largest purchaser and consumer of goods and services in most countries – South Africa being no exception – Government can utilise the power of procurement to create markets for SMEs, ensure local community participation and benefits, and generally shape the behaviour of business as good corporate citizens.
  6. Modernise, improve and build infrastructure as these projects will employ and upskill many people, thereby creating skills and an infrastructural platform which will facilitate economic development in a competitive world. The same infrastructural projects would provide additional business opportunities for SMEs.

If we can increase the number of intentional entrepreneurs in South Africa (11.8% of South African adults in 2014 had entrepreneurial intentions vs. 58% in sub-Saharan African), as well as our nascent entrepreneurial rate of 3.9% (vs. in sub-Saharan African rate of 14.1%) for those that have taken steps to start a business, we can fill the entrepreneurial pipeline, and aid them to become new entrepreneurs, and later on, established entrepreneurs.

If the business environment is enabling – and the mentioned six points are being adhered to by civil society, government and the business sector – the failure rate and number of discontinued businesses will decrease as these entrepreneurs would be being nurtured, and not left to their own devises.

By implementing these six measures in a real and collaborative way, it will assist in lowering the levels of unemployment, poverty and inequality in the country, as well as aid in improving South Africa’s total entrepreneurial activity numbers.

*Commentary by Sanlam / Business Partners Entrepreneur of the Year® competition spokesperson, Christo Botes.

What are you views on South Africa’s current entrepreneurship levels? Do you agree with the six mentioned methods? Share your views with us on our social media platforms:

Calling all entrepreneurs!

Final countdown to enter the 2015 Entrepreneur of the Year competition begins. With just a little more than a month until entries close for the 2015 Sanlam / Business Partners Entrepreneur of the Year® competition on 16 June 2015, South African entrepreneurs are encouraged to enter in order to be recognised and rewarded for the hard work and passion that they put into their business, as well as the vital role they play within the country’s economy.

The competition provides entrepreneurs with the chance to win prizes up to the value of R 2 million, which includes cash prizes to the value of R350 000, as well as valuable mentorship support, networking opportunities and associated marketing and national media exposure.

Now in its 27th year, the free-to-enter competition has become South Africa’s pre-eminent entrepreneurial platform, and embraces local entrepreneurship by providing an opportunity to showcase business achievements and elevate the entrepreneur’s profile, as well as their profits.

Christo Botes, spokesperson for the Sanlam / Business Partners Entrepreneur of the Year® competition, says that the competition serves as a promotional tool to not only create awareness for entrepreneurship in South Africa, but also for local entrepreneurs to generate a credible reputation amongst competitors.

“Smaller business often can’t compete with larger market player’s marketing spend and national advertising campaigns. Not only are such competition platforms cost-effective, but if entrants are successful as finalists or winners, the awareness thereafter can have a significant effect on their business’ brand and bottom line,” says Botes.

An example is the 2014 Sanlam / Business Partners Entrepreneur of the Year® winners of the Judges Prize – Dudu and Leema Mofokeng, joint owners of Legaci Dry Cleaners and Laundry Services – who, through the exposure gained from the competition, have raised the profile of their company and as a result have witnessed an increase in business enquires and requests from prospective franchisees.

The competition is open to entrepreneurs from all industries and for businesses of any sizes. Categories for the competition include: Emerging Entrepreneur, Small Business Entrepreneur, Medium Business Entrepreneur, Innovator of the Year, Job Creator of the Year and overall Entrepreneur of the Year® 2015.

Entrepreneurs interested in entering the competition can download entry forms online at www.eoy.co.za as well as interact with fellow entrepreneurs on the Sanlam / Business Partners Entrepreneur of the Year® competition social media platforms: Twitter: @EOY_SA and www.facebook.com/EOY.SA. The closing date for the competition is 16 June 2015.

21 years of entrepreneurial growth in South Africa

Freedom represents the liberty to follow the path one chooses, which includes an individual’s career path. Entrepreneurship is one such path, and since the first democratic election in 1994, South Africa has witnessed the rise of small businesses.

This is according to Christo Botes, spokesperson of the 2015 Sanlam / Business Partners Entrepreneur of the Year® competition, who says that economic activity in the country has experienced positive growth since 1994, with the country’s GDP almost tripling from $143.8bn in 1996 to $404.3bn1 in 2011, thereby improving opportunities available to entrepreneurs and small business.

Whilst unpacking South Africa’s entrepreneurial journey over the last 21 years, he points to the recently released Global Entrepreneurship Monitor (GEM) 2014 South Africa report2, which echoes this statement. “In 2001, 19.7% of the adult population perceived that there were opportunities available in South Africa to start a business. This figure has since increased to 37% in 2014. Over the years, small and medium enterprises (SMEs) have increasingly been recognised as the drivers of economic growth. Proof of the country’s commitment to small business is the establishment of the Department for Small Business Development, which reinforces Government’s commitment to the sector.”

Botes adds that given the economic environment South Africa finds itself in – with the International Monetary Fund (IMF) recently lowering the country’s growth forecast from 2.3% to 2% for 2015 – new entrepreneurial opportunities are limited. “If the market isn’t growing, it becomes tougher to penetrate due to limited opportunities.”

With that being said, more entrepreneurs are entering the market compared to 10 years ago, says Botes. “Entrepreneurial spirit in the country is on the rise due to positive shifts in societal attitudes. This has had a significant impact on how individuals view entrepreneurship, and has resulted in an increasing number of South African adults viewing it as a career choice. The GEM report2 reveals that 69.6% of respondents viewed entrepreneurship as a career choice in 2014, up from 48% in 2003, albeit down from 74% in 2013.”

Botes mentions that a growing stronger middle class is aiding consumer spend in South Africa. “The black community in particular is steadily moving from the lower to middle and upper income brackets, and driving consumer spending.”

Sectors which have seen the most significant growth in terms of opportunities include the services industry, especially beauty and health, due to consumers becoming more health conscious. Botes says that other sectors worth mentioning is the vehicle manufacturing industry, which includes motor vehicle components that are produced locally, as well as the telecommunications industry, which is doing significantly better compared to 10 years ago.

“There are however sectors that are facing challenges compared to a decade or two ago, such as manufacturing, which is not growing rapidly enough due to slowed economic growth. The sector, however, remains positive. Although the textile industry is making a recovery, this growth is artificial as Chinese and Indian products are still cheaper than locally-produced items.”

Remarking on the availability of financing for small businesses, Botes says there has been a shift towards the positive, as more players are availing financing for entrepreneurs. “Although the 2008 recession made financial institutions more conservative, they are starting to relax lending criteria. Government agencies have also improved and the Department of Trade and Industry (DTI) has been instrumental in driving entrepreneurship in the country. Notably, National Treasury, through its Jobs Funds, has created jobs by supporting initiatives that generate employment in innovative ways.”

Botes adds that while access to finance has improved, Government red tape and bureaucracy remain an issue. “Red tape has increased in the past few years as more acts are passed, therefore affecting the ease of doing business. Public sector employment has also grown significantly, thereby putting more pressure on governmental resources.

“The general perception is that the environment is more favourable to entrepreneurship than 10 years ago, and with entrepreneurs possessing a can-do attitude, entrepreneurship will continue to thrive in the country,” concludes Botes.

Local entrepreneurs to grab ecommerce opportunities

Technological advancements have changed the way in which the South African business landscape operates, and this is increasingly leading to many opportunities for local entrepreneurs and businesses.

One such advancement stemming from the evolution of the internet is the rise of eCommerce – a platform used to market, promote, sell and buy goods and services online. Christo Botes of the Sanlam / Business Partners Entrepreneur of the Year® competition says that with this sector experiencing rapid growth both locally and globally, South African entrepreneurs have a chance to capitalise on the opportunities which will arise, as the industry is still in its infancy on the African continent.

Botes says that the eCommerce sector in South Africa accounts for a very small percentage of the retail industry, and overall GDP contribution, when compared to developed markets. He points to a report1 by McKinsey & Company which states that Africa’s iGDP, the measure of the Internet’s contribution to overall GDP, remains low at 1.1%. South Africa reported 1.4%, which is significantly below that of global players such as the United Kingdom (5.4%), the United States (3.8%) and China (2.6%).

The rise in access to internet and mobile services, coupled with a growing middle class, will however see South Africa’s eCommerce figures rise in years to come. Earlier this year Google South Africa stated that the country’s eCommerce industry is expected to continue its growth in 2015, having seen a 37% increase in query volumes during 2014. The McKinsey & Company report also recently revealed that eCommerce could account for 10% of retail sales in Africa’s largest economies by 2025.

With the future of eCommerce looking bright in South Africa, local entrepreneurs should seek to establish themselves online, says Botes. “While business-to-consumer transactions are growing rapidly, with South Africans increasingly turning to online platforms to purchase goods and services, the growth of online business-to-business (B2B) transactions offers major opportunities for entrepreneurs as customers increasingly seek business services online.

“New online ventures offer a relatively low barrier to entry, and entrepreneurs can establish themselves on a playing field with larger competitors as in many cases the customer isn’t able to tell the difference between a small and large company,” says Botes.

Highlighting the rising opportunities for smaller players, PayGate CEO, Peter Harvey, revealed that five years ago the company would upload 10 start-ups onto its payment gateway for every established business, but that the ratio is currently 100:1.

Botes says that opportunities are abound for local businesses. “The rise of eCommerce includes various opportunities for small businesses ranging customer services, technical support or security and payment offerings for businesses e-platforms. It isn’t just limited to the selling of goods or e-tailing, and entrepreneurs should think out of the box when considering potential business ideas.”

While the eCommerce phenomenon offers entrepreneurs an opportunity to establish a business in this flourishing market, Botes says that entrepreneurs with an established business should also be looking at growing their online presence if they have not already done so.

“Entrepreneurs also need to adapt the way in which they communicate with their customers. Having an online presence has the ability to positively impact marketing and sales efforts, and entrepreneurs should be embracing these channels to discover how the Internet can transform and grow their businesses. A local bakery, for example, who may be predominately servicing its surrounding community, could expand its customer base across the city by introducing an online platform for their business in the form of social media platforms or a website.

“The development of a business website is no longer an expensive cost to the business, but instead can be designed affordably with easy to use, do-it-yourself website builders such as Woza and WordPress.”

He adds that it is important for entrepreneurs to gauge where their traffic is coming from, and what is the best platform to reach their target audience is. “Entrepreneurs need to ensure their communication channels are matched to their audience’s preferences, as there isn’t a one size fits all approach to online channels,” concludes Botes.

Avoid making foolish business mistakes

Starting a business is a daunting task, and growing the business, or even just keeping it afloat, can be even more overwhelming. Many new businesses do not survive this initial phase due to the business owner making mistakes during the first few fragile years of operation.

Christo Botes, spokesperson for the 2015 Sanlam / Business Partners Entrepreneur of the Year® competition, says that while some mistakes can sometimes be fatal to a business, they also teach entrepreneurs very important lessons.

Botes says that growing a business takes time, patience and practice, and entrepreneurs should aim for consistent and profitable growth, which is sometimes a struggle in the early years. “Growing a business takes more than just a great idea. During the business’ growth stage, entrepreneurs are bound to face challenges where they may stumble, but this is the nature of venturing into new territories. Often we see new businesses with great growth potential falling short due to costly, and sometimes, avoidable, mistakes.”

Botes points to some hurdles entrepreneurs fall victim to when growing their business, and provides tips on how to avoid these:

The need for speed

While it is advisable to enter the market as early as possible when noticing a gap, and to leap at opportunities that present themselves, rushing your market research and not planning sufficiently for such a venture can be detrimental to your business. Rather take a step back, analyze the pros and cons and do the necessary due diligence.

Remember that concepts take time to develop, and investing enough time and resources in building the business, marketing and distribution plans will ensure you reap great rewards in the long term.

Procrastination

Although rushing business growth may be harmful, waiting for the ‘perfect’ time may prove more detrimental to your business. By delaying the process, you run the risk of losing out on potential income, as well as potentially wasting savings in the lead up to the launch. If you are uncertain about specific processes, rather seek guidance from a business expert or organisation, such as the Business Partners Limited’s Entrepreneurs Growth Centre.

Being an expert in everything

Emerging entrepreneurs are always under pressure when it comes to resources and time, and therefore aim to achieve as much as possible in the shortest time. This is the most common pitfall of entrepreneurs and small business owners in that they may find it difficult to hand certain tasks over.

Entrepreneurs should rather seek advice from fellow partners (if applicable), as well as industry colleagues and experts. It is important to ask for help on areas you aren’t certain about as this will avoid having to rectify mistakes that might cost more than what you would’ve spent had you hired experts and advisors from the beginning. Successful entrepreneurs are those that put their trust in, and delegate responsibilities to people who have knowledge in their respective fields and responsibilities.

Not understanding technology

Technology is here to stay, and the internet, social media and other digital platforms have not only made business move at a much faster pace than before, but also offer the opportunities to maximize business revenues. Entrepreneurs who understand the role that technology plays in business processes, from operational to executive levels, will appreciate the amount of investment, both time and capital, that needs to be spent to reap the rewards.

Botes remarks that it is not easy to grow a new business, and therefore a few small mistakes are expected. “There are however methods which will assist entrepreneurs in not repeating the same mistakes. If you do your research, and surround yourself with information and experienced people, it becomes easier for you to make better, more informed decisions,’ concludes Botes.