16 minute read
Entrepreneurship
IT ALL STARTS WITH AN
idea
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For the longest time, our schooling and university studies were geared towards making young people employable and giving them the skills needed to start at an entry-level position in a company or corporation. Today, we know that working for someone else isn’t the only option! With South Africa’s rising unemployment rates, more young people are starting their own businesses. Entrepreneurship is one way to achieve personal success, but also to create more jobs and build a better society for all, writes Nicolene de Wee.
CHECKBOX
Be your own boss Start making money Become an entrepreneur Tap into available resources Social media for business and brand-building Become a promotor or influencer Networking, support and transferable skills A failure is only a failure if you don’t learn from it Tips
How to make money - on your own terms
Starting a new business has never been easy. It involves start-up capital and becomes even more difficult when you don't have working experience or business experience in the field you’re hoping to branch into. It’s hard, but not impossible, and those who manage to make a success of it are quick to tell you that it’s worth the struggle!
Starting your own business gives you a sense of responsibility and ownership, but entrepreneurship may be risky and can be
My best advice to entrepreneurs is this: Forget about making mistakes, just
Thrifting for funds
Thrifting, which involves the buying and reselling of secondhand clothes at a profit, is a new trend that is shaping a lot of South African entrepreneurs, even at school level.
Some are even adding their own touch to the clothes by making alterations that add a new flair to an old item. While your friends may see this as a hobby, this could be your ticket to a steady income, and an opportunity to promote other eco-friendly businesses on a shared platform.
Before you know it, you have some money in the bank, an emergency fund for the future, start-up funds for a new endeavour, or cash towards furthering your studies – while promoting a culture of saving. Along the way, you might have honed your social media marketing skills, taught yourself selling and bargaining techniques, and figured out how to manage your projects’ finances. These are all skills that are transferable and will serve you in the long run.
Most entrepreneurial projects start with an idea and are often borne from a need to solve a real-world problem.
costly, especially if you are still at school. It does, however, allow you to build and shape your own career, develop pathways to problem-solving and critical skills, facilitate innovation, and develop selfdiscipline. All of this in an exciting, selfpaced environment that can bring about real change for you and your community. It also evolves from the personality type of an entrepreneur. They can and always will find the market in the gap, not just the gap in the market. A unique product and service offering forms the concept. It now has to be supported by a business plan foundation, followed by funding. And only then does the real hard work start.
While there is a lot of talk about the government and big businesses needing to do more to encourage entrepreneurial skills among young people in the country, at the end of the day, the entrepreneurial spirit starts and ends with you!
Tapping into available resources That doesn’t mean that you can’t tap into resources that are available – government and businesses do have financial aid available to youth start-ups. Your parents and local community may also be able to help you with money, contacts and networking with possible investors.
Support is key when looking to start your own business. Do you know other people who are also interested in becoming entrepreneurs? If you do, you can pool your resources and work together to take your business from idea to reality. Teamwork is a survival tool and provides cutting-edge product offerings and solutions, as collective honed skills and entrepreneurial spirits amalgamate into one business plan.
Networking, support and transferable skills These people may not be experts in the type of business you’re hoping to start, but may bring other skills to the table that could be useful to you and your project. These are called transferable skills. If you’re thinking of selling baked goods, you may bring someone on board who can’t tell the difference between baking powder and baking soda, but who knows how to market a business on social media.
You may ask a friend who is very friendly and good at talking to people to sell your cookies at a neighbourhood market. When starting a business, it’s good to focus on all the things you might need for it to be a success.
Monique de Klerk
Monique de Klerk is a counselling psychologist at the Centre for Health & Human Performance at North-West University. She says, luckily, technology can be used to express and share ideas for a business start-up. Your generation, she adds, is much more geared towards innovation and independence, and you and your friends are a lot more likely to experiment with entrepreneurial ideas that allow you to portray your unique abilities and experiences.
Even if you don’t want to work for yourself and prefer a stable job and reliable income, Monique says these skills and your entrepreneurial mindset will still be an asset to your employer.
If, however, you do want to be your own boss, it’s good to start identifying your own strengths and skills – especially those in management, leadership and organisation. You might not think you have formal skills yet, but don’t think inside the box. If you were a school prefect or captain of a sports team, then there is a good chance that you have leadership and organisational skills. If you’ve been babysitting for the neighbours, then you’ve already proved that you can manage and lead others, and that you’re responsible and reliable. And if you excelled at debate, then you’re probably quite skilled at sales and negotiations.
Everything you’ve ever done has brought you to this point, and now it’s time to put those skills to use to start building your enterprise and shaping the future you want. Not everyone can (or wants to) study further after completing matric. Maybe you’re still deciding what to study, or maybe you can’t afford a university education at this stage in your life. Maybe you’ve decided to rather take some time to do your own thing before furthering your education, or maybe you just know that your business will be a success and don’t want to pursue anything else. For whatever reason, now is the time to start earning money – on your own terms.
Where do I find the money for my start-up? The first question you might ask yourself is how you can fund your entrepreneurial dreams. Even in these tough economic times, there are several organisations that can help.
You decide to start a business… One of these is the National Youth Development Agency (NYDA). The NYDA has a grant programme that gives young entrepreneurs financial and non-financial support to help them develop their businesses. You can visit their website by scanning the QR code below.
If you’re over the age of 18, you can also apply for a business loan from, for instance: • Nedbank • Standard Bank • Firstrand Bank • Small Enterprise Finance Agency (SEFA) • Isivande Women's Fund (IWF) • Business Loans South Africa. They may offer start-up capital to entrepreneurs with worthwhile ideas and a promising future. Some businesses might not need a lot of money to get started: • A car wash, for instance, won’t require much more than cleaning supplies. • Babysitting doesn’t have any expenses, although you may want to invest in a first-aid certificate to set the parents who want to hire you at ease. • Writing a blog or starting a vlog online can also bring in money if enough people visit your site. • Starting a baked goods business will only require the ingredients needed for your products, and a place to make them. • Another way to make extra money is to develop online applications or mobile apps. If you’re a tech-savvy innovator, search on social media platforms like
Instagram and twitter to see what other young people are developing – and get an idea of what type of apps are popular at the moment. • Crowdfunding is a way of raising sufficient capital investment in small amounts from a large group of people/investors. So, you don’t have to approach a bank for funding; you could also ask your parents or other adults to invest and help you get started. Some might even grant you an interest-free loan to get you started. As you can see, the amount of money you’ll need and the best way to get that money differs from situation to situation, so think carefully about what you want to do and what the best way is to get the support you need.
Here are some useful links regarding entrepreneurship in South Africa, as well as investment support:
• SME South Africa – tinyurl.com/SMESA • Thundafund – thundafund.com • Uprise.Africa – uprise.africa • Back-a-Buddy – www.backabuddy.co.za • The People’s Fund – thepeople.co.za • Jump Starter – tinyurl.com/JmpSt • South African Angel Investment Network – www.investmentnetwork.co.za.
Social media for business and brand-building Social media is a great way of marketing your business and reaching out to potential clients. But for thousands of young people, social media isn’t just a way to market their business; it is their business! Or rather, the way they market and promote themselves on social media is their business. To do this, they are establishing themselves as brands in their own right, who then partner with bigger companies to promote products.
You may be approached by brands and companies if you have built a big enough following on social media. The more followers you have, the bigger your chance of being scouted as a promoter. On Instagram, for instance, small businesses may start approaching you if you have more than 2 000 followers and ask you to showcase their clothing or accessories.
Become a promotor or influencer As a promoter or influencer, you may be given a unique discount code for products and can even earn commission on every sale that comes from your account. Big companies recognise the power of social influence, and make use of young people whose personal brands are in line with their corporate values. When it comes to social media, you and your friends have a distinct advantage. The generations before you didn’t grow up with the internet, smartphones or social media, and this puts you one step ahead. Digital engagement is second nature to you, and you can tap into this to promote brands for money or other perks, or to engage your own customers when starting your own business.
Remember that different social media platforms cater to different types of users. Promoting a business on Facebook might be more targeted than promoting it on twitter, for example. Instagram is a great way to showcase your products and engage with your customers, and social media stories and live videos make people feel connected, while creating a sense of immediacy and accessibility. Regardless of the platform you decide on, social media is about interaction, and allows for a sense of engagement that other advertising does not. This is especially important if your business caters to your local community.
My first business idea didn’t work. What now? Even with funding, many new businesses fail due to factors like lack of planning, poor marketing or insufficient research. The chances of a start-up failing is quite high, but experts say a failure is only a failure if you don’t learn from it! If your first business didn’t take off in the way you wanted it to, it’s important to spend some serious time examining what went wrong. This means looking at the root causes of the problems, and analysing decisions that led to the business bombing out.
What could you have done better, and what will you do better in future with the information you now have at your disposal? Another important analysis is a financial one, where you analyse your income and expenses, and see where you missed the boat. Maybe you tried to expand too quickly, or maybe there were some hidden expenses that you didn’t factor into your initial calculations.
For your next venture, you might want to find a new or additional income stream that can add to the financial success of your business, or you might want to explore a completely new idea for making money. You might also decide to form a partnership with other young entrepreneurs, which will allow you to share resources and costs.
Reaching out to people who are successful in the field or who run their own businesses can help you to learn from their mistakes, and equip you with the knowledge to deal with problems that might arise. Networking is crucial, and growing relationships with other entrepreneurs can help you feel supported in your own projects.
Tamlin Connolly
CASE STUDY
From the sky to the beauty salon
While some people believe a formal tertiary education is your ticket to financial freedom, you might not be convinced. Even if your parents or other adults in your life are encouraging you to attend university, you don’t have to lose your entrepreneurial spirit along the way.
Tamlin Connolly is 23 years old. After school, she studied at EPT Aviation, one of the country's leading aviation colleges that specialises in airline flight attendance, cabin crew training and air hostess courses. “I never believed that I needed a degree or diploma to be successful in life, but I didn’t want to disappoint my parents, so I enrolled for the course,” she explains. From a young age her parents taught her to save a portion of her allowance, and she continued this trend when she started earning a salary.
Her entire life changed when she applied for a job at a travel agency. Her work took her to a number of hotels, and they all had beauty spas, which she frequently visited for treatments. It was during this time that she fell in love with the idea of one day owning her own beauty salon. By this time, her sister had completed a year-long diploma through the Cape Town Nail and Beauty Academy and was a qualified beautician. “She often used me as a model for her practical examinations and in turn I helped her to make her bookings and start her own business,” she remembers.
Today, Tamlin owns and manages her own beauty salon in Johannesburg. Although she has no formal training as a beautician, she managed to tap into the entrepreneurial skills needed for success, with the knowledge and support of her father, sister and brother – who all run their own businesses too!
“Self-discipline is important, because you need to stay on top of what is happening as far as marketing, spending and profits are concerned,” she explains. “You need to plan your income and expenditure, and ensure that you reach the goals you set in order for your business to succeed.”
Tips to start your own business
• Start at the beginning
Before you get started, have a good idea about the product or service you want to offer your customers. Know your own strengths and weaknesses, and find something that you’re passionate about doing. It’s great to make money, but it’s easier to thrive when you’re doing something that you’re good at and something that you love.
• Consider a partner
Pending several deciding factors, it is sometimes a good idea to get a mental or business partner. Get someone that shares your value system, ethics and, most importantly, your vision. It is good to have a cofounder that will keep you accountable, but also complement your skills and experiences. No need to duplicate skills.
• Do your homework!
Before you get started, do solid market research. This means looking at the product you want to sell or the services you want to deliver, and seeing who else is doing the same. How many people need or want what you are offering? What can you offer that your competitors aren’t already doing? What are other businesses doing well when it comes to marketing – and what could you do better?
• Write a business plan
This is a written document that should outline the goals of your business, how you plan on achieving these goals, and the timeframe for achieving them. You can start with a basic business plan and expand it as your enterprise grows. Think of a business plan as a roadmap to help you get where you want to be. The good thing is you don’t have to start from scratch, as there are loads of templates available online that you can use to get started.
• Test your assumptions
Your business, the business plan, your product or service are based on several assumptions. One of them is assuming that your business will be an overnight success, built on a great concept. There’s nothing wrong with that mindset, but you do need to find practical testing methods to check the various moving parts. Tweak and adjust as necessary. Learn, apply quickly and move along.
• Budget matters
Part of your business planning should entail looking at what your start-up costs will be, and how much money you must make every month to keep your business afloat. Think about all the possible costs involved in making your product or performing a service, and think carefully about hidden costs like registration fees, marketing fees, delivery costs and more!
• Be professional and presentable
In the past, printed business cards might have been necessary, but today a welldesigned website or professional Facebook page can be used as a calling card. You can create a personalised email address for your business, and it doesn’t have to cost you a cent.
• Get the nitty-gritty right
Decide whether you need to register your business and get advice on VAT registration and taxes. Talk to a tax consultant or a consultant who deals with business registrations, or ask someone you know who runs their own business for advice. Protecting your intellectual rights might also mean copyright and trademark registrations.
• Don’t be afraid to ask for help
Develop a network of entrepreneurs and business owners to lean on and learn from. The internet has great resources for new business owners, and social media platforms such as Facebook and LinkedIn have thousands of groups to help connect entrepreneurs to each other and helpful resources. Input and guidance from an experienced mentor are invaluable and could save you money and time.
In a world that is constantly changing, there is no one subject or set of subjects that will serve you for the foreseeable future, let alone for the rest of your life. The most important skill to acquire now is learning how to learn.” – John Naisbitt
