The hardships of starting a business from scratch are well documented, but there is a way to make the journey for budding entrepreneurs easier.
Mentorship is one highly recommended measure for small enterprise owners who wish to reap the benefits of support from established business specialists.
Despite government identifying small businesses as having the potential for job creation as the country battles a pressing unemployment problem, many entrepreneurs find themselves in a difficult trading environment.
The high failure rate of start-up businesses, lack of support from a skills development perspective and difficulties in accessing funds resulting in cash flow challenges – are scenarios that most entrepreneurs are likely to encounter.
Speaking at the Standard Bank and Moneyweb entrepreneurship roundtable on Tuesday, CEO of financial services group Cartesian Capital Anthea Gardner says mentorship for entrepreneurs is still important.
“There is no harm in getting advice, and mentorship can have a huge advantage,” Gardner says.
Elaborating on her mentorship experiences, Gardner says she still surrounds herself with astute people who offer support in times of uncertainty. While she does not have specific names as a mentor(s), she does not limit her influences of support to industry players but also family.
Gardner, who has local and international investment and business experience, having worked for companies such as Rand Merchant Bank, Morgan Stanley in London, and the African Development Bank in Tunisia, has had her fair share of exposure to the entrepreneurial space.
She initially started a property business in the South of France and upon her return to South Africa in 2014 she started up Cartesian Capital. “Running a business takes guts and perseverance. If you don’t believe in your dream, you are going to give up. The lows are low and long and the highs are high,” says Gardner.
Today, Cartesian Capital is one of the empowerment partners for JSE-listed asset management firm Anchor Capital.
Despite there being various relevant books available to entrepreneurs, offering advice on starting a business, Gardner admits that many people still don’t know about entrepreneurship. “Entrepreneurship is a sacrifice in time, financial and emotional capital. You need to be strong if your business is going to thrive.”
Another captain of industry supporting Gardner’s views is Esna Colyn, CEO of JSE-listed beauty group Imbalie Beauty, with a market capitalisation of R51.8 million.
Also building a career in investment banking, private equity and corporate financing for more than 15 years, Colyn subsequently joined Imbalie Beauty in 2010 as the CEO.
Since then she has transformed the business – a franchisor marketing and distributing its line of beauty and health brands to more than 150 franchised beauty salons, large retailers and selected pharmacies – to add more brands to the Imbalie stable.
In 2012, Imbalie acquired the Perfect 10 franchise chain, with its 55 national beauty salons, adding to its brands of Dream Nails Beauty, Placecol, Dr. Gobac and more. Colyn says it took two years to transform the business to what is today.
“The biggest lesson over the last five years is to be patient in business. Form partnerships with the best in the industry and don’t just do partnerships, be selective. And most importantly you need to be passionate about what you do,” she says.
One of the challenges that Colyn has come across in her day-to-day operations includes the South African Revenue Services’ claim that the company owes “millions” in taxes. Five years on and “[they] are reaching a settlement.”
Imbalie has also survived claims by a supplier that it overcharged for products, gift cards at one of its line of brands being faulty and operating in a competitive industry.
The biggest mistake entrepreneurs make, she says, is accepting capital from anyone who is willing to offer it. “It’s not just about money but building relationships with people you can work with in the long term. Entrepreneurs are too hasty. Try to always calculate your risk.”
A parting tip from Colyn, which is arguably not unique to the small business environment is: “never forget where you come from and stay humble”.
This article is part of a series sponsored by Standard Bank Business Banking. Should you require further information about small business funding please e-mail Moneyweb MD Marc Ashton with details of your project and he will connect you with an appropriate banking resource.