SA’s young entrepreneurs urged to seek out advice before funding
Traditionally, June or Youth Month is synonymous with increased calls by influential industry players for South Africa’s youth to start their own businesses and subsequently create more jobs.
According to Byron Jeacocks, regional general manager for Business Partners Limited, while these calls are necessary, young entrepreneurs still need to exercise caution when starting a business and should make use of fellow business owners as mentors, as well as seek out advice before funding.
He explains that the business support landscape in South Africa for young entrepreneurs is like the business world itself – it is teeming with opportunities, but entrepreneurs needs to seek these opportunities out and build their own support network. “Nobody is going to hand it to you on a silver platter.”
Jeacocks says that when starting a business, possessing deep industry knowledge, the kind which entrepreneurs are likely to pick up after 10 or 15 years of working in a sector, is key. “General knowledge and business skills also mean the difference between survival and business failure. It is thus why young entrepreneurs should continually tap into older entrepreneurs’ knowledge and experience.”
He says that for decades various spheres of government, corporates and development organisations have been setting up “one-stop shops”, “help desks” and “local business service centres” – places entrepreneurs are able to source affordable help on anything ranging from compiling business plans to finding finance and setting up administration systems.
Jeacocks says that the idea behind the concept is positive, but so far none of these projects have managed to sustain and grow a consistently good service. “The advantage of these projects is that services are often subsidised and are therefore affordable. Finance may even be available in the form of grants. However, the disadvantage is that the quality of service may vary considerably, and young entrepreneurs should scout around widely for good alternatives if the subsidised ones fail to live up to their promises.
“In fact, it is entirely possible for young business owners to build an excellent support network for their business without any state-sector support.” It starts, says Jeacocks, with the acknowledgement by the young entrepreneur that business support is much wider than access to business finance. “If you don’t have to borrow money, don’t. You don’t need a million rand to start a business.”
He says that more often than not, young entrepreneurs rather need support in setting up and managing systems in their businesses, including people management, VAT returns, sales, bookkeeping and cashflow forecasting. “As many entrepreneurs are unaware of where to find help in building these systems, they simply focus on production and neglect the other aspects of running a successful business.”
A crucial part of any business support network that young entrepreneurs often overlook is other business owners. Jeacocks says he finds that inexperienced entrepreneurs are the only ones that try to keep their operations and plans secret. “If they are lucky, they find out sooner rather than later that experienced business owners are remarkably willing to share information, tips, advice and even customers. There is no harm in reaching out to business owners around you.
“They are often busy, however, and one of the best ways in which to network with other business owners is through your local business chamber where you can meet them when they are themselves in networking mode. South African business chambers are untapped and unappreciated for their potential to support young entrepreneurs.”
He says that many successful entrepreneurs acknowledge the role of a mentor in their career. “This can be a family member, a business teacher or an older or retired business owner. Such mentors are everywhere in South Africa.”
He explains that sometimes they are formally organised in projects such as Business Partners’ Mentorship programme, but more often they need to be sought out purposefully by young entrepreneurs at business chamber meetings, industry associations and through referrals from other business owners.
Jeacocks draws a distinction between a consultant, who charges by the hour and wants to make a living out of advising businesses, and mentors, who do not need the money and who simply want to give something back to the business community by advising young entrepreneurs.
He says that starting a business is a do-it-yourself project, and young entrepreneurs must not expect individuals and institutions to fall over themselves to offer support. “But an entrepreneur does not have to be lonely. With the right attitude and willingness to work at it, young business owners can build a substantial network of people around them who really want to see them succeed,” concludes Jeacocks.