Q and A with guest editor: Sizwe Nzima – on the challenges facing SME’s
What do you think are the biggest issues that small business owners in South Africa face?
Lack of training. When someone has an idea, they always think it's a good idea. Business training allows a person to first be analytical about opportunities which have a chance for success in the market. The ones with good business ideas will implement them, but knowledge on growing the business becomes a problem.
Government policies. This might sound clichéd but it's true. I am currently experiencing this problem. To refer to my current situation, The Medical Control Council laws were written in 2003, referring to situations in that time. Now life has progressed and the way to do business has changed, but the laws being used speak to a totally different world and time. These laws delay and prohibit small businesses coming into the market to get a share in the market and operate legitimately. The process of a simple thing such as registering the business can take about 9 weeks or more, and the direct and indirect costs associated with it are substantial. Government support also plays a big role in SMMEs. The South African government does not look at small businesses because they are high risk. The introduction of private and public partnerships in health will benefit only the large companies which are considered to be more successful.
Knowledge / experience within the field. Experience in business is essential for growth and sustainability. Having the relevant knowledge about the field you're going into can work as a great advantage for your business as you will have more insight about the pros and cons within the field. If you lack experience, it can be a huge cost in terms of going into a field without understanding the necessary requirement to function.
What kind of training did you undergo before you started? What do you think is the most valuable training for someone wanting to start a small business? (For example, is it drawing up a business plan, book-keeping, marketing, or something else?)
I went to the Raymond Ackerman Academy, an entrepreneurial development Course at UCT Graduate School of Business. This is a 6 month business course which teaches you the basics of entrepreneurship. This course gives you the opportunity to test your business idea while supported by the academy, in case you want to make a proto-type, test the brand and access other support.
The most important training to have is the basic education which is Matric or high school level, and an entrepreneurial course which highlights the fundamentals components needed in business such as:
- Management - how to combine all the departments and make sure they function efficiently
- Accounting and finance - being able to track cash flow in order to know the expenditure and income
- Human resources - being able to manage people without exploiting them. Human resource also governs the role each person play in the company.
- Marketing - understand the consumers' needs and wants, their lifestyle and etc.
- Operation - Joining the processes which it takes until the service or product is at the customer's hands.
You now have more than 120 clients. How did you go about marketing your business? Do you have any advice to empower other entrepreneurs on fundamental marketing in order to grow their client base?
I started off working with my grandparents and then later on the idea spread through word of mouth. I then started to do research; and handed out pamphlets, this was when I also got more customers. I was also lucky enough to get a lot of media coverage.
When someone starts a business, customers have to know the business; this is where marketing comes in. Word of mouth is not the primary form of marketing; you will be required to do aggressive marketing, making the people aware of the business and the brand. This can be done through business cards, presentations or pamphlets. Social media is also one of the cheapest marketing tools. Join groups and create pages where people can get to know more about your business.
Before you do all these things, one will need to change the way they communicate to consumers as this can distinguish you from your competitors. It's not what you say; it's how you say it which makes the consumer interested.