Ten tips for increasing diversity in your workplace

When businesses start up, they are often small, tightly-knit groups of pioneers that come from the same background, even from the same family. This works very well in the early survival stages of a venture, but as soon as the business reaches a more stable post-survival growth phase, the founders have the opportunity to look around a bit more widely, and to diversify their workforce.

Those who don’t, forego the richness of varied ideas and run the risk of stagnating, and remaining small and insular. But human resource diversification, like any process of change, can be uncomfortable and risky, says Kgomotso Ramoenyane, Executive General Manager of Human Resources at Business Partners Limited. She offers the following ten tips for entrepreneurs who want to bring diversity into their businesses in the right way:

1. Ask yourself why

Start with examining your reasons for wanting to diversify your staff. If you only want to do it in order to score B-BBEE points so as to get more business, chances are that you are going to find it a frustrating exercise that is likely to strengthen the prejudices of those in your organisation resistant to the idea.

But if your reasons are based on true long-term business advantages of diversity such as more creativity and innovation, increased productivity and opening up new markets. The reasons orders your thought processes and gives you a set of priorities with which to work.

2. Set your targets

You can introduce diversity into an organisation in so many different ways – age, gender, race, sexual orientation, religion, abilities – that you cannot do it all at once. Pick realistic targets aligned with your reasons for diversifying.

3. Get buy-in

One of the key dynamics of human resources diversification in a business is increased interaction and collaboration between diverse people. It would be odd, and most likely doomed to fail, if you were to start such a process without first gaining the collaboration of your existing team around the idea, the reasons for it, what to expect, and how it is going to be rolled out and measured. 

Given that most small business owners might not have the experience with this process, it might be a good idea at this stage to consult one or two of the organisational change experts available in the market to assist.

4. Recruit according to your plan

If you hold out for the perfect candidate with just the right profile, skill set and aptitude, you are probably not going to make much progress. On the other hand, if you are simply going to appoint token candidates, the project is not even worth starting.

5. Integrate the differences

Recruitment is just the start of diversifying your staff. The whole point of human resources diversification is to forge different perspectives and experiences into a rich, vital team. It takes a lot of work from management to embrace differences and obtain maximum performance levels from a diverse team. It means listening to many different inputs and taking them all seriously, without necessarily throwing out every established way of doing things nor having to try to find a perfect compromise about every issue.

6. Encourage mentoring and coaching

New recruits can always do with some mentoring and coaching in any business. Someone brought in from a different background and experience to the dominant culture of the company is likely to benefit even more from support in the beginning. Pairing such new recruits with experienced members of your staff in a mentorship relationship can go a long way to help form the new bonds that lie at the basis of the idea of diversity.

7. Weed out discriminatory policies and practices:

A diversifying company is likely to come across established practices that unintentionally discriminate against newcomers with differing needs. Staff members in early motherhood might need flexible hours, strict rosters might prevent a worker from attending mosque on a Friday and even a set of stairs might be a formidable obstacle to a staff member with a disability.

8. Start new projects

An influx of fresh blood into a business is a fantastic opportunity for a company to try new projects with diverse teams. It almost defeats the object of diversification if the intention is to stick to business as usual.

9. Look for commonalities

One way of weaving the differences between diverse employees into a rich tapestry is to focus on the opposite – the things that they have in common. Pointed discussions of shared interests and values, and planned activities to emphasise those will help to forge the bonds.

10. Celebrate successes

Diversifying is a difficult and uncomfortable process. It is therefore important to not only to fight inevitable pockets of resistance and come down firmly on individuals who cause unnecessary friction, but also to emphasise the positive by celebrating every milestone towards a truly diverse workplace.

Fostering creativity through entrepreneurship

A successful entrepreneurial journey begins with a gap in the market, some creativity and passion, and ensuring that you are equipped with the right team and resources. This is according to Nicolette Tilley, owner of Wild and Free (Pty) LTD, and entrant in the 2018 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, who began her entrepreneurial journey importing wedding dresses and selling them locally on a part-time basis.

This was short-lived, however, as Nicolette soon discovered that selling someone else’s creations was not what she was passionate about.

Being a firm believer in expressing her creativity, Tilley (35) bought a sewing machine during her time as a stay-at-home mom in 2013 and began experimenting with design, making items such as pencil cases and blankets. The entrepreneurial light-bulb moment arrived in 2016 when Tilly was searching for a good quality diaper bag that was durable enough for long-term use. “After fruitless searching, I realised I could design my own bag. I’ve never been afraid to be bold and try to make things work – which is exactly what I did. I found a local leather maker, and together we drew out a pattern and he stitched it together for me. I loved walking around with my own creation on my arm, and before I knew it I had friends asking me to make them bags.”

Before long, bag orders were arriving in their numbers, and with this, Wild & Free was born. “I chose the company name because I wanted it to represent the type of person who would own one of my creations – a free-spirited but driven individual who isn’t afraid of failure,” she says.

Being a self-taught entrepreneur with no formal industry qualifications, Tilley turned to technology and the internet to help her achieve her goals of running a successful business. She strongly encourages self-development as well as using social media to promote and grow a business. “We live in an era where starting your own business is completely achievable, thanks to social media platforms and easy-to-use online business support tools,” says Tilley.  “I often wonder how people advertised and promoted their business before Facebook. There’s a lot of competition out there but we’re fortunate to have knowledge and access to customers at our fingertips,” she adds.

Tilley recalls that one of her biggest challenges since starting the business was keeping up with demand following the launch of one of her bag designs. Within 24 hours of The Business Bags Facebook launch, the product had been viewed online over 1 million times with hundreds of e-mails and orders received. At that point, Tilley was doing all of the marketing, production design and business administration on her own. “I wanted to delete my Facebook page and put my head in the sand – but I knew I had created something that was special, unique and something that women needed. I was fortunate enough to have an old school friend, Josie Piers, jump on board and help me get through the masses of emails and messages. She did a fantastic job of getting processes into place, which was a big weakness of mine. Josie took over all the admin, and today we have a functioning website, one-of-a-kind products and a full team of incredible people in place,” says Tilley.

When asked what her greatest achievement has been thus far, Tilley said that selling over 3000 units of one of her designs is among her biggest achievements on paper but her proudest accomplishment is having created a brand that is able to employ 9 full-time staff members.

When asked what her top tips for other aspiring entrepreneurs would be, Tilley said the following:

  1. There are hundreds of free websites offering short courses. Entrepreneurs starting out who cannot afford to go to university or college should make use of free online tools to educate themselves about their industry.
  2. Set targets for your team and your business before the year begins. This makes your goals a lot more tangible. If you start out knowing what you want to achieve, you will find that you surpass your own expectations.

Finding the start-up sweet spot

Entrepreneurial lessons from generations of entrepreneurs

Picturing a typical entrepreneur – the chances are you visualize a young, mission-driven techie with a mind-blowing idea that will make him or her the African version of Mark Zuckerberg.  While the fast, digitized millennial entrepreneur’s approach to business is highly beneficial for future success; there’s a lot to be said for more seasoned entrepreneurs and the wisdom they have gained during their years in the game.

Gugu Mjadu, spokesperson for the 2018 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, says that instead of pitting one generation against the other – entrepreneurs looking for guidance should seek out a sweet spot between the two – as there are important lessons to learn from both:

Entrepreneurship is a tricky road at the best of times. In South Africa, the business ownership path is littered with a number of macro and micro environmental challenges making entrepreneurship even more difficult. These include access to markets, successfully navigating the legislation landscape and accessing finance. With this in mind, it is important for entrepreneurs to seek out advice from as many trusted sources as possible – to ensure they learn and gain insight into how to prepare their own business for success.

As the world of work shifts and evolves, it’s important to recognise that business lessons can come from all generations in the entrepreneurial world.

This includes millennials, who characteristically approach life and business with a fresh ideas and a new perspective on existing methods. Some valuable lessons from the millennial entrepreneurs include:

1. Be different – and not just in your USPs

Millennials are generally recognised for their ability and enthusiasm to stand out and be different. Differentiating from your competitors in the market with Unique Selling Points (USPs) is something all the entrepreneurial text books will tell you – but ‘being different’ goes beyond this. Entrepreneurs shouldn’t be afraid to show their unique characteristics, to embrace diversity and look for opportunities outside of the proverbial box.

2. Question everything

Characteristically, millennials are curious. There is plenty to learn from this character trait – being willing to question why things are done in a certain way, and being brave enough to question if historical processes are still relevant and efficient. There is nothing wrong with changing the way something is done if it doesn’t suit your business. Standard practices are ineffective if they don’t evolve with your changing business needs.

3. Do and do quickly

Millennials were born into the technological age – they have grown up in a world filled with instant gratification, artificial intelligence, the internet of things and always-on connectivity through the internet, smart phones and social media. As a result, these entrepreneurs tend to work faster and this plays into the growing global trend of ‘failing fast’ – the skill of knowing when to stop planning and execute, and additionally, to recognise and stop doing something when it is not working.

On the other hand, seasoned entrepreneurs, who are perhaps more traditional and methodical, also have priceless tips and best practices as well as lessons on what not to do – all of which are valuable takeaways:

4. Be open to learn

Many established entrepreneurs admit to regretting their youthful arrogance when they first started their business. They have realised through years of experience that learning comes in many forms – advice from a business mentor, lessons through reading or even from receiving harsh criticism. Entrepreneurs should be open to looking at every situation as a learning opportunity – if something didn’t go well, what can be changed? If something went well, how can it be further improved or how can that process be applied to other areas?

5. Be deliberate

Part of building your business is building a network of clients, suppliers and other internal and external stakeholders. More seasoned entrepreneurs will attest to the value of being mindful about who you conduct business with – essentially, you want to trust your suppliers and stakeholders as they are an extension of your own brand. You want to deliberately pick out and nurture these networks as they are the relationships that will take your business further.

6. Don’t be afraid to fail

More established entrepreneurs, having been in business for a good while longer than millennials and having suffered more than a few set-backs themselves, will explain that the key is not to become despondent when things don’t work out. Failures are natural, and necessary for growth. As long as you actively learn from mistakes and proactively take steps not to repeat these in the future – failures can be the most valuable stepping stones to success.

Ten tips for managing the lifeblood of your business

Nothing is as important to the financial health of a growing small business as the constant, predictable flow of cash, because if the cash dries up, the business will die.

Cash is to a business what oxygen is to a body – it simply cannot survive without it, even briefly.

The one plan that every entrepreneur must have to ensure survival is a cash-flow budget, and you must stick to it as if your life depended on it. The following tips should make sure that enough cash keeps flowing through your business.

1. Underestimate your sales and overestimate your expenses

Unfortunately entrepreneurs, being optimistic by nature, tend to do the opposite. Great sales are predicted and expenses ignored, with the result that the cash flow budget starts off from the wrong base. If you are working on the cash-flow budget of an existing venture, base your predictions on the historical figures, and be conservative with any sales increases. Remember to take seasonality into account. With a new venture, use only the most likely, tangible sales that you will be able to make, not some abstract market-share calculation.

2. Be frugal

Cut out all nice-to-haves from your overheads as well as any capital acquisitions. Check your expenses regularly. Overheads have a sneaky way of constantly creeping up, and they need to be checked and queried regularly. Be careful, though, not to cut too deeply, especially when it comes to marketing expenses, which often seem like luxuries but can actually be an indispensable investment for future sales.

3. Avoid unnecessary debt

It is actually easier to find finance for your business than is generally thought, especially if you broaden your sources to family and friends. The real hard part of business finance is paying it back, rather than finding it. Use debt only as part of a carefully managed financial plan. Try to match the term of the debt to the lifespan of the asset that you’re buying.

4. Have a strong credit policy

Very few businesses can afford a client going bankrupt with a large outstanding invoice. It is important to have some form of credit vetting – don’t simply offer the same terms to every client that comes along.

5. When you do sell on credit, be absolutely clear about the credit terms and hold your debtors to them

Many entrepreneurs, who are often involved on the sales side of the business, feel uncomfortable getting involved in chasing up overdue invoices, to the extent that they even accept short and late payments. There is a fear that informing a client that you need the money will send a message that your business is in trouble, or weak, and that this perception may complicate future negotiations. The answer lies in clear credit terms, and insisting from the start that all your clients stick to them. A friendly but firm staff member can be tasked to chase up the invoices.

6. Keep your invoices timely and accurate

Many debtors will use the least excuse to delay payment. Don’t give them one by letting mistakes creep into your invoices. Make sure the information in the invoice is clear and include your debtor’s VAT number and your banking details so that it becomes easy for your client to pay you.

7. Work on your creditors

If your growing business gets paid after it has to pay its creditors, it will remain painfully cash hungry. Your aim must be to negotiate longer terms with your creditors than you have with your debtors. Avoid making yourself guilty of the same delaying tactics that some of your debtors will try on you. The key to good creditor terms is trust built up over years of prompt payments and good communication.

8. Free up the cash in your unsold stock

Putting slow moving stock on sale not only returns cash to your business, but gives you an opportunity to create some excitement and draw in new customers.

9. Liquidate your white elephants

Selling unused assets cluttering up your work space can give your business a welcome cash-flow boost.

10. Don’t do the ostrich trick

When you experience a cash crunch, the worst thing you can do is to stick your head in the sand and believe that your creditors can’t see you. Yet this is what many entrepreneurs do – they avoid taking phone calls from creditors, they jump to new suppliers and postpone making contact until they are able to settle the bill in full,

The right approach is to be open and upfront about your situation. Small, incremental payments show your creditors that you are still around and in business. Even if your account is overdue, negotiate cash purchases with the same supplier rather than jumping to a new one.

When cash dries up in your business, production falters, clients are let down and you lose business fast. But there is also the immense emotional strain on the entrepreneur that needs to be taken into account. It spills over into the workplace morale and can lead to bad, panicky decision making. As always, a sober plan to get out of the crisis might save your business. But by far the best option is never to get into a cash-flow crisis in the first place.

New Year, new flow

Cash flow management key to steering a clear course of business in 2018

A typical new year’s cliché is the commitment to resolutions – whether they be to start new healthy habits or break bad ones – something that is usually accompanied by the setting of new priorities for the year ahead. As much as this age-old tradition of self-improvement forms the basis for personal growth and success – for entrepreneurs, this sort of structured thinking is key to setting the tone for a productive year in business.

One of our competition judges, Kobus Engelbrecht of Sanlam / BUSINESS/PARTNERS says that for the year ahead, stringent cash flow policies should be top priority for entrepreneurs – especially where low economic growth forecasts paint a less than positive outlook.

“The successful management of cash flow, including the commitment to honouring debtors, creditors and payment deadlines, will play a vital role in determining the success of a business,” says Engelbrecht.

Engelbrecht lists the following tips for entrepreneurs looking to prioritise cash flow in 2018:

Spend time on forecasting – detail is key

Accurate forecasting is one of the best ways to ensure that your business stays on top of its finances over the next 12 months. When looking forward, it is important to first review historical financial statements in order to effectively predict potential dips in sales or increases in expenses.

Be real, and accurate

Though the temptation to be eternally optimistic is always present for entrepreneurs, it is more important that cash flow statements and forecasts are kept as real and accurate as possible. When income is overestimated, there is heightened risk because this can provide a false sense of security in the business. As such, figures should always be based on historical sales data – and any deviations should be derived from realistic and probable factors.

Regular updates

As a once-off review is not nearly enough to keep a tight hand on cash flow, entrepreneurs should review their business’ cash flow statements regularly. This will allow for the early detection of any potential problems that may arise.  

Get savvy with payments

Technology is an entrepreneur’s friend – often providing a range of solutions at minimal (or at least reasonable) cost. Why then, should payment systems be any different? Entrepreneurs should tap into technologies that will make life easier – both for the business and their customers. It is also recommended that clear payment terms be set out from the onset with customers and third party suppliers to ensure timely compensation.  

Plan for Plan B

While planning ahead and keeping a tight grip on cash flow throughout the year are both smart methods of business management, neither of these will be effective if there is no plan B in place for when trouble suddenly strikes. This is especially true in a volatile economy where the economic tide can shift without warning. It is a good idea, therefore, to have a blue-print plan to guide the business through any rough patches it may come across.

Stay on top of the game

The world is moving at an alarmingly fast rate and entrepreneurs would do well to keep up to date with trends and best practices, such as putting in place efficient cash flow forecast monitoring, monitoring the industry landscape and keeping an eye on interest rates.

Keep it simple

Budgeting and cash flow forecasts may appear complicated and overwhelming in the beginning, but they need not be. In some instances, a simple spreadsheet may be more than enough to effectively manage an annual budget. Regardless of whether the entrepreneur employs an accountant to draw up the financial statements, they should make a conscious effort to know exactly what these statements say and project, at all times. 

Ten financial tips for business owners in hard times

Financial management naturally tends to slip down the list of priorities for business owners when the economy is booming, finance is cheap and clients are plentiful. But when the tide turns, your ability to control your finances, especially your cash flow, becomes probably the most important survival tool available to the entrepreneur.

Here are ten ways for business owners to improve their finances during a downturn:

1. Consolidate your debt

It is easy for business owners to pile up debt during the good times – a credit card or two, a property bond, machines and vehicles bought with various asset-finance loans, generous lines of credit at suppliers and a ballooning bank overdraft. All of this can become crippling when the crunch comes, and one way to survive is to look for a financier that can consolidate it all into one loan with a long enough term to make the instalment affordable. You’ll probably end up paying more in interest, but at least you can survive the dip.

2. Take a panga to your expenses

The expenses in a business coming out of a boom time can always be slashed without necessarily hurting its core health, and when you think you cannot possibly cut anymore, go through them once again to find ways of doing more with less. Incentivise productivity and cost reduction among your staff, and invest in cost-saving systems such as GPS devices for your vehicles or insulation to bring down your electricity bill.

3. Monitor your debtors

The worst time for bad debt is during a downturn because you need every cent to keep afloat, yet the likelihood that your debtors might default is so much higher, because their businesses are also struggling. Focus on collections, rethink your credit policy and tighten your vetting processes before granting any more credit.

4. Relook your business plan

A business plan compiled in the fat years is of little use during a downturn. Often, survival depends on much more than tweaking the projected sales figures, but rather requires a radical rethink of your strategy. Discard the old plan and start working on a new one from scratch.

5. Negotiate with your financiers

As awkward as it is, start communicating early and frankly with your financiers about your situation. They know that nearly all of their clients are struggling. When you show them that you are one of their clients who is proactively making plans to survive, the chances are better that they will support a rescue effort, for example through a loan-repayment moratorium or even through an extension of your overdraft.

6. Manage minutely

A downturn requires intense hands-on management, with great attention to detail, simply because there is no room for the kind of errors that can slip in when you step away and manage your team with a light touch, as you can during boom times. Even if you are consistently a hands-on kind of manager, double down on it during the darkest days.

7. Negotiate with your suppliers

Even though your suppliers are very likely, just like you, to become wary of extending credit terms during hard times for fear of bad debt, there is still a chance that they might be willing to accommodate their best clients.

8. Look towards your neighbours

When work dries up and your team and machines stand idle it might be worth looking in places that you wouldn’t normally consider. The more established firms in your industry may well be over-committed and would happily pass over-flow work on to you, or they might find it convenient to outsource a certain type of smaller client to you.

9. Try support programmes

If you haven’t tried government incentive schemes and support programmes yet, now is the time. Don’t expect a flock of angels that will swoop to your rescue. Government programmes work slowly, but it might just be the thing that gets your business going again when the economy picks up one day.

10. Keep looking for business opportunities

Some of the best business opportunities arise during downturns. Competitors go bust, leaving huge gaps in the market. Consumers look for alternatives and are often more open to break their loyalty to their usual suppliers and service providers. The pressure of the downturn on your peers may open them up to the idea of a merger which can ensure the survival of both businesses, and take you to the next level even before the economy picks up again, as it always will.

Local entrepreneurs’ ability to save is a catch-22

Navigating saving methods for your business and personal finances

South Africans have always been scrutinised for their ability to save, and with July marking National Savings Month – an initiative by the South African Savings Institute (SASI) which encourages all South Africans to embrace the idea and action of saving – there is a focus on the need to save.

But, given the declining economy and recent statistics the National Credit Regulator which show the total outstanding debt owed by South African consumers has increased by 2.94% to R 1.66 trillion, it emphasises how entrepreneurs, just like any other consumer, are feeling the pinch financially and potentially cutting back. However, at the same time, their livelihood relies on consumer spending for business profit.

This predicament means that an entrepreneur’s ability to save can affect both the bottom line of their business, as well as their own personal finances.

Putting the pressure that entrepreneurs are faced with into perspective is Statistics South Africa’s latest Consumer Price Index (CPI), a measure examining the average prices of consumer goods and services. In May 2017, the CPI rose for the first time in 2017 to 5,4% (from 5,3% in April 2017), and average prices increased by 0,3% (from 102,4% in April to 102,7% in May). While marginal, the price increases of goods and services – ranging from food and beverages, to transport  – has a knock-on effect on South African consumers and places additional pressure on already strained budgets, resulting in less consumer spending, and thereby, potentially less business for local businesses.

As the challenge of saving and effectively maintaining cash flow can affect both experienced and inexperienced entrepreneurs, precautionary steps need to be taken.

While entrepreneurs may face different hurdles depending on the life stages of their respective businesses – a veteran entrepreneur may fall victim to bad financial management and overspending, while start-up entrepreneurs run the risk of mismanaging their loan repayments, whether from a financier or their own personal credit cards – the fundamental measures to successfully manage their finances remain the same. 

Here are five tips for managing your business finances to avoid an impact on personal savings:
  1. Separate personal and business finances: Entrepreneurs should define their salaries based on what their businesses can afford and not the lifestyle which they wish to maintain. Not only will this be financially beneficial in the long run, but it will also prevent discrepancies when SARS assesses the business as well as the owner’s personal income tax.
  1. Keep up with your debt repayments: It is important to bear in mind that saving hard earned money whilst still in significant debt can lead to further implications as the cost of debt can be more than the interest earned from savings. Repaying debts can therefore be seen as the most important foundation when it comes to saving, as once an entrepreneur is no longer in debt, it is often easier to obtain bond type funding or access an overdraft facility in the case of emergency. 
  1. Streamline business processes: In order to minimise unnecessary debt, weigh up the costs incurred versus the productivity produced within the business. This can be done by continually reviewing processes and looking for ways to be as cost effective as possible.
  1. Curb spending: Consider each expense before it is incurred and limit fixed monthly costs to the bare minimum. Another way to curb spending is to not invest in non-income producing assets such as cars, houses, boats and other tools that aren’t essential to the business.
  1. Account for late payments: To minimise late payments, it can be beneficial to offer an early settlement discount to debtors that pay within 30 days. Such a discount usually ranges from 2% to 5%, which can be attractive for regular clients as it adds up to a significant amount over a 12-month period. Alternatively, another option is to make use of a debtors factoring house that can facilitate with invoice discounting for the business, and depending on the quality of debtors, an advance can be made up to 80% of the invoice value per debtor. This is a common form of working capital financing, but can be a very expensive form of funding.

Although the current economic climate is tough, entrepreneurs are renowned for taking whatever means necessary to drive their business forward. I always marvel at the resilience of entrepreneurs and how they innovatively face and conquer challenges. Keep it up, entrepreneurs. You are the heroes of our economy!

Ten ways to hook investors onto your big idea

A great many excellent business ideas never get past the spreadsheet stage and into the real world simply because entrepreneurs fail to connect to the people with enough money and risk appetite to help them implement them.

Finding the right investors and pitching your idea effectively is a business skill that can be worked on, says David Morobe, BUSINESS/PARTNERS regional general manager. He offers the following ten tips to get you started:


  1. Get yourself connected and network. Investors are out there, and they are usually only one or two people away from those with whom you do business with anyway. Your accountant or suppliers, for example, can put you in touch with potential investors, or at least someone who knows a potential investor. Emphasize the “work” in “network” – investigate and ask for referrals.

  2. Prepare and sharpen a concise story around your idea that contains no waffle, but only the essential elements that will interest an investor – marketability, sustainability and your own passion for the project. Your value proposition should come through succinctly – what are you offering to whom, and why will they be prepared to buy it.

  3. Make sure that you know all the aspects of your idea, its market and industry. Investors want to know that you are experienced in the industry in which you want them to invest their money. Therefore, the more you have worked on your plan, even to the point of taking your idea to the market on a small scale, the better.

  4. Have a detailed business plan ready. Not only will it help to give you the knowledge mentioned in the previous point, but the fact that you will immediately be able to send or present your plan if someone wants to have a closer look will help to convince potential investors of your readiness. Besides, knowing that you can back up your pitch with a plan will give you confidence.

  5. It helps if your plan has a powerful executive summary, the written equivalent of your verbal pitch mentioned in point 2. It must encapsulate your business plan precisely, without waffle or exaggeration. Chances are that the investors whom you will be targeting have seen many business plans in their lives, and they will not bother to read further if the executive summary does not whet their appetite.

  6. Be prepared for a face-to-face presentation, more detailed than the one in point 2, for when an investor calls you in for a follow-up meeting.

  7. It is almost guaranteed nowadays that an investor who becomes interested in your idea will check up on you on the internet. It helps to have a good website around your idea and a strong presence on social media in which your successes are highlighted, not only in your current business but in previous ventures and jobs. Most astute investors investigate the strength of both the business idea and the prowess of the entrepreneur.

  8. Once you’ve made contact with a potential investor, stay in touch, even if it is just by asking for advice, for example on how an investment of the kind you are looking for can best be structured.

  9. Be open to feedback from potential investors, who would want to see that you are open-minded and adaptable. Besides, chances are that the investors you are pitching to are experienced business people themselves, and can enhance your ideas with their advice whether they decide to invest in your idea or not.

  10. Have a realistic exit strategy for the investor, who unlike you does not necessarily want to remain in the business in the long term. The investor’s thinking is likely to be: “How do I make the best return possible on this investment?” The time frames that most investors work with are between three and seven years.

Ten financial tips for business owners in hard times

Financial management naturally tends to slip down the list of priorities for business owners when the economy is booming, finance is cheap and clients are plentiful. But when the tide turns, your ability to control your finances, especially your cash flow, becomes probably the most important survival tool available to the entrepreneur.

Veroshen Naidoo, area manager at Business Partners Limited, suggests ten ways for business owners to improve their finances during a downturn:

1. Consolidate your debt

It is easy for business owners to pile up debt during the good times – a credit card or two, a property bond, machines and vehicles bought with various asset-finance loans, generous lines of credit at suppliers and a ballooning bank overdraft. All of this can become crippling when the crunch comes, and one way to survive is to look for a financier that can consolidate it all into one loan with a long enough term to make the instalment affordable. You’ll probably end up paying more in interest, but at least you can survive the dip.

2. Take a panga to your expenses

The expenses in a business coming out of a boom time can always be slashed without necessarily hurting its core health, and when you think you cannot possibly cut anymore, go through them once again to find ways of doing more with less. Incentivise productivity and cost reduction among your staff, and invest in cost-saving systems such as GPS devices for your vehicles or insulation to bring down your electricity bill.

3. Monitor your debtors

The worst time for bad debt is during a downturn because you need every cent to keep afloat, yet the likelihood that your debtors might default is so much higher, because their businesses are also struggling. Focus on collections, rethink your credit policy and tighten your vetting processes before granting any more credit.

4. Relook your business plan

A business plan compiled in the fat years is of little use during a downturn. Often, survival depends on much more than tweaking the projected sales figures, but rather requires a radical rethink of your strategy. Discard the old plan and start working on a new one from scratch.

5. Negotiate with your financiers

As awkward as it is, start communicating early and frankly with your financiers about your situation. They know that nearly all of their clients are struggling. When you show them that you are one of their clients who is proactively making plans to survive, the chances are better that they will support a rescue effort, for example through a loan-repayment moratorium or even through an extension of your overdraft.

6. Manage minutely

A downturn requires intense hands-on management, with great attention to detail, simply because there is no room for the kind of errors that can slip in when you step away and manage your team with a light touch, as you can during boom times. Even if you are consistently a hands-on kind of manager, double down on it during the darkest days.

7. Negotiate with your suppliers

Even though your suppliers are very likely, just like you, to become wary of extending credit terms during hard times for fear of bad debt, there is still a chance that they might be willing to accommodate their best clients.

8. Look towards your neighbours

When work dries up and your team and machines stand idle it might be worth looking in places that you wouldn’t normally consider. The more established firms in your industry may well be over-committed and would happily pass over-flow work on to you, or they might find it convenient to outsource a certain type of smaller client to you.

9. Try support programmes

If you haven’t tried government incentive schemes and support programmes yet, now is the time. Don’t expect a flock of angels that will swoop to your rescue. Government programmes work slowly, but it might just be the thing that gets your business going again when the economy picks up one day.

10. Keep looking for business opportunities

Some of the best business opportunities arise during downturns. Competitors go bust, leaving huge gaps in the market. Consumers look for alternatives and are often more open to break their loyalty to their usual suppliers and service providers. The pressure of the downturn on your peers may open them up to the idea of a merger which can ensure the survival of both businesses, and take you to the next level even before the economy picks up again, as it always will.  

Ten ways to hook investors onto your big idea

A great many excellent business ideas never get past the spreadsheet stage and into the real world simply because entrepreneurs fail to connect to the people with enough money and risk appetite to help them implement them.

Finding the right investors and pitching your idea effectively is a business skill that can be worked on, says David Morobe, BUSINESS/PARTNERS regional general manager. He offers the following ten tips to get you started:

  1. Get yourself connected and network. Investors are out there, and they are usually only one or two people away from those with whom you do business with anyway. Your accountant or suppliers, for example, can put you in touch with potential investors, or at least someone who knows a potential investor. Emphasize the “work” in “network” – investigate and ask for referrals.
  2. Prepare and sharpen a concise story around your idea that contains no waffle, but only the essential elements that will interest an investor – marketability, sustainability and your own passion for the project. Your value proposition should come through succinctly – what are you offering to whom, and why will they be prepared to buy it.
  3. Make sure that you know all the aspects of your idea, its market and industry. Investors want to know that you are experienced in the industry in which you want them to invest their money. Therefore, the more you have worked on your plan, even to the point of taking your idea to the market on a small scale, the better.
  4. Have a detailed business plan ready. Not only will it help to give you the knowledge mentioned in the previous point, but the fact that you will immediately be able to send or present your plan if someone wants to have a closer look will help to convince potential investors of your readiness. Besides, knowing that you can back up your pitch with a plan will give you confidence.
  5. It helps if your plan has a powerful executive summary, the written equivalent of your verbal pitch mentioned in point 2. It must encapsulate your business plan precisely, without waffle or exaggeration. Chances are that the investors whom you will be targeting have seen many business plans in their lives, and they will not bother to read further if the executive summary does not whet their appetite.
  6. Be prepared for a face-to-face presentation, more detailed than the one in point 2, for when an investor calls you in for a follow-up meeting.
  7. It is almost guaranteed nowadays that an investor who becomes interested in your idea will check up on you on the internet. It helps to have a good website around your idea and a strong presence on social media in which your successes are highlighted, not only in your current business but in previous ventures and jobs. Most astute investors investigate the strength of both the business idea and the prowess of the entrepreneur.
  8. Once you’ve made contact with a potential investor, stay in touch, even if it is just by asking for advice, for example on how an investment of the kind you are looking for can best be structured.
  9. Be open to feedback from potential investors, who would want to see that you are open-minded and adaptable. Besides, chances are that the investors you are pitching to are experienced business people themselves, and can enhance your ideas with their advice whether they decide to invest in your idea or not.
  10. Have a realistic exit strategy for the investor, who unlike you does not necessarily want to remain in the business in the long term. The investor’s thinking is likely to be: “How do I make the best return possible on this investment?” The time frames that most investors work with are between three and seven years.