9 minute read
ENERGY SECTOR
A BRIGHT FUTURE
Opportunities abound in South Africa’s fractured energy-supply market with renewable energy promising to light the way, writes LEVI LETSOKO
Eskom’s inconsistency in supplying the necessary capacity for the country to realise its social and economic ideals has opened up the South African energy market. Advances in technology and infrastructure have seen renewable energy being punted as a sustainable option for market entrants looking to break the state-owned power company’s monopoly.
The renewable energy space has long passed its infancy stages, but adoption still lags somewhat. Nevertheless, the green sector provides ample opportunities for aspiring entrepreneurs.
The South African Photovoltaic Industry Association (SAPVIA) has been instrumental in regulating the sector, creating operational benchmarks that demand adherence by new and already trading renewable energy companies. The organisation has assisted and credited some of the major players in this industry.
Mark Willoughby, MD of One Energy Group, is excited about the commercial opportunities in green energy, but remains sceptical about what this means for the consumer, saying the industry is not immune to bogus suppliers. “To be avoided at all costs are the myriad
ENERGY SPECIALIST.” – MARK WILLOUGHBY, MD, ONE ENERGY GROUP
‘hit-and-run’ backyard importers who on the face of it seem to offer cheaper products. End-users purchase these products at their peril,” he says.
“There are several reliable suppliers who import products to sell on a wholesale basis directly to installers,” continues Willoughby. “When evaluating a supplier, assess the quality of their products. Check the pricing and track record in honouring warranty claims. Familiarise yourself with their after-sales support system.”
GREEN SHOOTS
One Energy Group has a structured franchising model that guides entrepreneurs through the various stages of setting up a renewable energy franchise. Before approving a franchising request, Willoughby looks for technical knowledge. He believes it’s important for franchisees to understand the specifications and the dynamics of the solutions on offer.
He also says franchisees stand a better chance of being approved if they can showcase their selling skills in a way that translates the technical features of solutions on offer into answers to the customers’ most immediate questions. “The objective is for a franchisee to become a fully fledged renewable energy specialist who can provide a client with a complete blueprint to take them gradually yet substantially off the grid by making successive investments in recommended and compatible technology over time.”
DRIVING RENEWABLE ENERGY ADOPTION
It is compulsory for entrepreneurs in the renewable energy space to possess a particular set of technical and trading skills. The South African Renewable Energy Business Incubator (SAREBI) is dedicated to mentoring energy entrepreneurs to comply fully with the industry’s demands.
Sarebi general manager Helmut Hertzog says that many entrepreneurs enter this sector with the misconception that an understanding of business is all they need. In most cases, they are wrong – the renewable energy space is a highly technical and technological one that requires a broader understanding of the renewable energy value chain to achieve success.
“Entrepreneurs need to be decisive about the role they are looking to take up, be it manufacturing, assembly or installations,” says Hertzog. “They also need clarity on the markets they are targeting. Working with a franchise helps with marketing and market entry. It is not easy to do it alone. This is a highly competitive industry.”
One of the obstacles facing renewable energy franchisees is that the end-users often don’t understand energy, adds Hertzog. Customers don’t buy energy solutions because they preserve the planet; they buy solutions that guarantee them lesser costs over the long-term. It’s up to franchise owners to educate them.
GENERAL MANAGER, SAREBI
SOUTH AFRICA’S RENEWABLE ENERGY MARKET
The size of the renewable energy market in South Africa is expected to grow substantially over the next decade. According to government’s proposed draft amendments to the electricity regulations on new generation capacity tabled in 2020, financially stabilised municipalities will have the authority to source energy supplies from independent power producers. This means that they will have the option of generating their own power or source it from small scale suppliers independent of Eskom.
ADAPTING TO CHANGE
Valuable lessons from the Covid-19 pandemic
Facing a global pandemic not only pulls communities together, it teaches us valuable business and life skills. Standard Bank’s Head of Franchising, André Beck, shares his insights into what we can learn from Covid-19 to build better businesses for the future.
The Covid-19 pandemic has been devastating to many businesses in the hardest hit sectors. In your view, will there be any positive outcomes?
Business owners have seen that their businesses do not survive in isolation. They are inextricably linked to the economy, their communities, their employees and each other, which means we need to work together, support each other and do what’s best for the entire community – not just individual balance sheets.
Many businesses have always operated like this, but I believe there will be an uptick in overall reasonable and ethical practices, particularly towards employees, as a result of what we have collectively experienced in 2020.
How has the pandemic created new cultures within businesses?
Franchisees used to wait for their franchise managers to visit them before addressing challenges or concerns, but these are now handled immediately. We are closer than ever to our clients for the same reason. We can log onto our systems and instantly reach colleagues, clients or other members of our networks, and it’s not only made us more empathetic and collaborative, but we’re finding incredible solutions to the problems we’re collectively facing as a result of the pandemic.
What is the single most important quality a business should embrace right now?
Adaptability. There are many aspects businesses should be focusing on, but they all come down to this trait: How quickly can you adapt your business model, products and service offerings based on new insights, data, operating conditions and customer expectations?
A high adaptability quotient is critical to sustainability and success in a post-Covid-19 world.
What are the biggest sector trends you have noticed as a result of the pandemic?
There has been a fundamental shift in every industry. For example, many quick service restaurants are opening ‘dark kitchens’. These are also known as ghost kitchens, cloud kitchens or virtual kitchens. They refer to central kitchens where orders are placed, cooked and then collected for delivery. The result is a larger focus on deliveries instead of customers coming into stores, smaller stores and lower rentals – all while catering to new customer demands.
There has also been a significant uptake in e-commerce and online retail solutions. This covers 3D virtual tours and selections that support customer experiences through virtual platforms, as well as partnering with delivery companies to offer online ordering and deliveries.
We’ve also seen brands investing in apps that support overall customer experiences. For example, imagine an app that allows a customer to order a cappuccino from their car while filling up with fuel, ensuring limited in-person contact. Our clients are increasingly investigating our contactless payment solutions, which highlights this shift in consumer behaviour.
Business owners have realised that it’s more important than ever to know who their customers are and what they need. How does this impact on-theground decisions for franchisees?
Every day businesses generate hundreds – even thousands –
of data points relating to their customers. The big question is whether you are using this data to understand who your customers are, how they are interacting with your brand, and what they need from you?
For example, the data that we collect and share through our CustomerViewTM solution is invaluable. Our clients can see anonymised data on who prefers in-store visits versus online ordering and shopping by their demographics, including which times of the day different demographics engage with the brand. This can help you create specific specials or offerings that speak directly to each demographic in a way that aligns with their preferences, delivering an overall better consumer experience and building long-term brand loyalty.
The insights that can be drawn from the right data are endless and extremely valuable and they begin with this simple lesson: know your customer.
What are the key learnings for franchisees as we adjust to a Covid-19 world?
When I sit down with our clients, the first question I always ask is: “Why did you invest your money into this business?” It’s important for me to understand each of our clients’ values and motivations, but I also believe that franchisees should be revisiting their passions as well. We’ve all had our heads down trying to get through this pandemic. We now need to look up, step back and remember why we do this so that we can build a better future.
CUSTOMER SERVICE
“We needed to set up a new account to purchase a Sorbet franchise business and Standard Bank assisted us throughout the entire process, from a business loan to business bank accounts and through to speed points for the store.
We chose Standard Bank because of the value they saw in the business we wanted to acquire. They understood our strategy and were willing to put together a portfolio of products to ensure we could make our dream a reality.
Even in very turbulent and uncertain times, Standard Bank worked with us to best navigate the situation and ensure we could keep the deal alive despite the challenges brought about by Covid-19.
We are very grateful to Standard Bank for all their assistance. They understand the needs from an entrepreneur’s point of view and believe in the value small businesses can add to our economy.
Thanks to Standard Bank we have a business that provides a livelihood for more than 28 people today.
By understanding not just banking but also the business, Standard Bank became more than just a partner in the capital market, but our business partner.”
– Craig & Katherine Sydenham Skin Guardian & Sorbet Beauty Salon Franchisee
CUSTOMER SUPPORT
How we’re supporting our customers during Covid-19
• We’ve leveraged our strong balance sheet to support our clients • We’ve offered financing solutions and extended payment terms • We’ve worked closely with clients to implement innovative solutions that address the need for contactless payments, e-commerce platforms and increased insights into customer demographics and spending patterns • Our team has been available to ensure our clients receive the support, advice and access to our network when they need it most.
For more information on how we can assist you to achieve your franchise ambitions, visit our website at www.standardbank.co.za
