Ministry of entrepreneurship necessary in SA

Entrepreneurial leader, Mark Lamberti, recently called for the creation of a Ministry of Entrepreneurship in South Africa at the recent Sanlam / Business Partners Entrepreneur of Year® competition launch. This was echoed by Professor Dilip Garach, of Garach & Garach Financial Advisory Services who called for a Small Business Ministry to be established locally.

According to Nazeem Martin, MD of Business Partners Limited and spokesperson for the 2013 Sanlam / Business Partners Entrepreneur of Year® competition, following President Jacob Zuma’s State of the Nation speech last week, which referenced government programmes that support small business, the formation of an entrepreneurial Ministry would be a significant step forward in tackling SA’s unemployment crisis.

Martin says that he endorses these proposals and says that the efforts that are currently being made to support and grow entrepreneurship do not seem to be effective enough, as South Africa’s ranking in various entrepreneurial reports still seems to be slipping.

According to Professor Garach, it is evident that government understands that small and medium enterprises (SMEs) are an important source of jobs. “Minister Gordhan said in his Budget speech of 2011 that businesses which employ fewer than 50 workers account for 68% of private sector employment. But the government has shown very little commitment towards solving problems that directly impact on experienced entrepreneurs and small businesses.”

He says that South Africa recorded a 7% total early-stage entrepreneurial activity (TEA) level in 2012, which is a 2 percentage point decrease from the 9% recorded in 2011. “While South Africa is better off than it was in 2004 when the TEA level was at 5,4%, the country still has much to work towards.”

Professor Garach says that an entrepreneurial Ministry will be able to focus on reducing the cost of doing business, simplify the current business registration process and SME tax system, create access to finance and create appropriate incentives for South African entrepreneurs.

He says that a step in the right direction may also be government entering into a public / private partnership in order to set up an entrepreneurial academy. “The academy could develop schools that focus on entrepreneurship, as well as provide education in business skills and promote mentorship and training.”

He says that in 1995 Malaysia formed the Ministry of Entrepreneur Development, which clearly demonstrates the importance that the Malaysian government places upon the issue of entrepreneurship and entrepreneurial development. “The Ministry acts as the lead agency for the development of entrepreneurs as well as to co-ordinate entrepreneurship activities in general.”

Among the specific services currently offered by the Ministry are a one-stop entrepreneurship information centre, franchise and vendor development programs, entrepreneurial training, and subsidised business premises for qualified entrepreneurs.

He says that other examples of economies that have implemented this type of body include the US, which has a Small Business Administration Cabinet position which arranges loans, loan guarantees and other assistance to small businesses, as well as Croatia, which has implemented a Ministry of Economy, Labour and Entrepreneurship, which carries out proactive employment policies.

“The SA government target was to create five million jobs by 2020. Although it may not be possible to create this amount of sustainable jobs in the long-term, government however can create an enabling environment to set up one million entrepreneurs who then in turn create five million jobs,” concludes Professor Garach.

Top SA entrepreneur encourages next generation of entrepreneurial leaders

An entrepreneur is not a risk free B-BBEE shareholder, a Tenderpreneur, or the survivalist selling goods along the side of the road to make a living. This is according to Mark Lamberti, well known entrepreneur, Chief Executive Officer of Transaction Capital Limited and founder of Massmart, who was speaking at the recent launch of the 2013 Sanlam / Business Partners Entrepreneur of the Year® competition launch in Johannesburg.

According to Lamberti, an entrepreneur is an individual who sets up a business, taking financial risks in order to make a profit. “Entrepreneurs are innovators who shatter the status quo to set up new products and services. We have many great entrepreneurs in this country who just look at the world through slightly different eyes and create something new and fresh. A very good example of this in South Africa is what Riaan Stassen and Michiel Le Roux have created with Capitec.

“Entrepreneurship has also been described as the pursuit of opportunities beyond the resource’s control. I think that this is always the case. When I wrote the original strategy for Massmart in August 1988 I had a vision of what the business could be, but had no idea where the resources were going to come from to get us there.”

He says that personal characteristics that entrepreneurs often posses is the need for control, independence and achievement. “Entrepreneurial strategy tends to take the form of a niche. Entrepreneurs often don’t go out there and take on the so called ‘big dogs’ head on, they excel in carefully defined markets protected from the existing forces of outright competition. “It may actually be advantageous if others consider the industry in which you are playing as risky, as there will be less players interested in getting involved.”

Lamberti says that entrepreneurs face many challenges on their journeys that need to be overcome in order to grow and develop. “Sometimes entrepreneurs make the mistake of placing too much dependence on a few key people, instead of developing all employees. This limits the growth of the business and developing human capital should be a focus area for local business leaders.”

He says that systems and controls are capabilities that can assist entrepreneurs in overcoming the challenges of growth. “Although these systems and controls can lead to frustrations for business owners, we have to realise that they are absolutely necessary as losing control is not an option. Even wild ducks fly in formation.

“Although education isn’t everything, entrepreneurs should try be as educated as much as possible before starting something. Study books and learn lessons from other entrepreneurs, as these lessons will be very useful when building your business. Any knowledge of financial systems and budgeting will also be very useful.”

Lamberti says that many think that entrepreneurs are extremely risky. “Entrepreneurs are often not the huge risk takers that people perceive them to be. For the most part, entrepreneurs are fanatical about the downside, and are therefore very careful about the risks they take.”

He says that entrepreneurs need to be very careful when it comes to reputation management. “It takes a lifetime to develop a reputation, and only takes a minute to lose it. Entrepreneurs often do not realise how much reputation means until the time comes for them to use it. It is an asset that is very valuable when you need it.

According to Lamberti, entrepreneurs need to realise that experience always serves them best in the long run. “Whenever I was offered choices in my career, I always took the path of more learning rather than the one that would provide more money or power.

“Entrepreneurs also shouldn’t listen to people who say that say that your personal life needs to be sacrificed for entrepreneurial success. The most valuable things in life cannot be measured and they cannot be bought,” concludes Lamberti.