Entrepreneurship is often touted as the silver bullet for South Africa’s unemployment woes. Youth unemployment in particular is of great concern, with 53% of South Africans aged between 18 and 34 unemployed, according to a Global Entrepreneurship Monitor (GEM) report released in 2015.
Despite a strong drive from government and the financial sector, young entrepreneurs remain in short supply. This is because there has been no culture of entrepreneurship engendered within children from a young age, as it was not a career path that was encouraged. Now that encouragement is on the up, young people are developing ideas but have no clue where to start when it comes to implementing them.
Rob Le Blanc, chief investment officer and partner at incubator Awethu Project, says the best way is to jump into the deep end and go to market with your idea – irrespective of whether you think it’s ready. He says entrepreneurs mistakenly feel that their idea has to be perfect before taking it to market, only to find that their now ‘perfect’ idea needs to be reworked, or even abandoned for some reason or another.
“When you’re sitting in a room thinking about what your business should be,” says Le Blanc, “you don’t actually know because you’re not engaging with your customers, suppliers or investors. The best way is to start, even if you’ve got a fraction of what will actually be required to get up and running.”
When it comes to funding, it is best to look for innovative practical ways to get started and not to allow a project to be stalled because of a lack of angel investors, or banks declining a loan. Potential customers and suppliers may be willing to offer funding or give you free supplies if they believe it will reduce their costs and generate significant income for them in the future.
Le Blanc also encourages entrepreneurs to talk to as many people about their ideas [as possible] and look for opportunities to partner up with those who can improve their ideas and move faster. While it is natural to want to protect your gold-mine idea, as Moneyweb MD Marc Ashton once put it, your idea is probably not that ground-breaking in the first place.
Says Le Blanc: “As an entrepreneur – and I include myself in saying this – you are way too precious about your idea. Chances are, it’s been thought of before, or there is already something similar in the market. Everyone, by default, thinks their idea is the next big thing.”
He added that, while it would be beneficial to approach a business incubator for assistance in the early stages of a business, it is not absolutely necessary. The purpose of an incubator is to give entrepreneurs structure and teach them the processes that they often need to learn once they have become their own bosses and do not have the routine of formal employment.
“Incubation is about supporting entrepreneurs and giving them information that can help them avoid mistakes that others have made. They will still make mistakes, but with incubation the idea is to avoid the foreseeable ones.”
Ultimately it all comes down to research. Gugu Mjadu, executive general manager for marketing at Business Partners, says it’s about finding out whether the idea has been done before, whether there is a market for the goods or services you seek to provide, and whether you can a financial business base for your product. You would have to think of best- and worst-case scenarios and project revenues and profits and cash flow forecasts for each.
“Taking the creative idea into the research and planning phase is often the most daunting part of the venture,” says Mjadu, “but budding entrepreneurs shouldn’t become despondent during the process as it is one of the most important phases of starting a successful business.”
Research conducted by Samsung into South African Millennials aged 18 to 35 affected by unemployment, reveals that 49% of respondents feel they have good business ideas but don’t know how to turn them into money-making businesses. Samsung’s ‘Mixed Talents’ campaign seeks to create a technology solution to this challenge. The campaign invites entrepreneurs and would-be entrepreneurs to send their ideas – all of which will be used to design something that will better enable them to turn their ideas into viable money-makers.
Already the campaign has received over 2 000 business ideas and, from February, the beta phase of the project will begin wherein ideas will be tested and vetted.
Carol Koffman, senior manager at Deloitte and executive coach of the Samsung campaign says: “The ideas won’t be assessed based only on whether they will be able to make lots of money, but also on their social impact. What comes out will eventually be something that should inform policy, education, crowd-funding, social development…. It will be more than a business development platform.”