With estimates valuing South Africa’s township economy at around R100 billion, there’s massive scope for small business growth.
But, as Gauteng MEC for Economic Development Lebogang Maile notes, the lion’s share of this money leaves the township and ends up in the hands of those who control the means of production.
“Reviving the township economy means we need to do things differently,” Maile told the Financial Mail. “We need to get more of our small and medium enterprises to participate in the value chain, because as long as the value chain is dominated by a few big white companies we will not be able to change the structure of our economy.”
Unlocking the full potential that the township economy offers requires rethinking your approach to business from a survivalist entrepreneur to an enterprise owner. This, says Pavlo Phitidis, CEO of Aurik Business Incubator, means building an asset of value. Here are four strategies that will help you do that.
Identify and act on opportunities
Forget about the business plan, says Raizcorp founder and CEO Allon Raiz.
Rather, he says entrepreneurs should focus on spotting and acting on opportunities that present themselves.
“Our society has created a myth around the value of a business plan, post it being written. There’s huge value in writing a business plan, but if you perceive that plan to be a reality, that’s problematic because everyone knows that once you complete the plan, reality and the plan completely diverge from that moment onward,” he said in an interview with Wealth Wise magazine.
“To act on an opportunity is far more important than what was written in a document. The skill of linking things together and seeing opportunities is something we should teach our kids and entrepreneurs.”
Tiisetso Maloma, an entrepreneur and co-author of Township Biz Fastrack, says starting small is best. Be strategic in the product or service you choose to offer, and be enterprising with your skills to grow your business one block at a time to minimise your risk exposure.
As the business grows, you keep reinvesting in the business and you’ll be in a better position to take bigger risks.
“Selling one or few products gives you an opportunity to learn greatly about business with minimal risk in investment. Feedback from customers will help you improve your service and product,” he says.
Work on the business, not in the business
Many entrepreneurs struggle to let go of the reins and insist on overseeing every aspect of the business. The problem with this though, Maloma notes, is that you wind up working in the business instead of focusing on growing that business. He says establishing business automation is central to taking your small business to the next level.
“Automation means putting processes in place that can be run by employees, even when you aren’t physically present. The business can transact without your presence. By so doing, you are passing on skill and intelligence to your employees. Intelligent and empowered employees mean that they can help you think and analyse trends in the business,” he says.
Having a firm understanding of what your customers want should be the compass that guides your expansion direction and links closely to bootstrapping effectively.
“Consumers always communicate their consumption preferences, business owners just have to listen and/or ask. Asking and listening are simple but powerful tools to get information on what the market is willing to spend on,” Maloma advises.