In this edition of Access magazine, we take a look at the business of entrepreneurship and what the IDC is doing to practically support and assist entrepreneurs in the establishment and growth of new business enterprises in the country.
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Richard Combrink
Senior Account Manager, Business Support Programme – IDC |
We talk to the Senior Account Manager,
Business Support Programme, Richard
Combrink, to find out more …
Why is entrepreneurship so important in
South Africa today?
Firstly, South Africa has a large group of
people who are unemployed. Secondly,
the worldwide trend since the 1970s is
for big businesses to harness more
sophisticated technology to produce
the same or better results with fewer
people. Thirdly, to keep inflation under
control, to be competitive and ensure
poverty alleviation, we should be net
exporters of our goods and services.
This requires more people to go into
business to produce those goods and
services. Finally, we should be adding
more value through the beneficiation of
the raw materials we dig up from the
ground or by processing food locally. As
more people learn to run and manage
their own businesses, they create
employment not only for the many
people who are currently unemployed
but also absorb those skilled people
who are being retrenched and put into
early retirement by the larger
companies.
What are the biggest barriers/ obstacles to
South African entrepreneurs?
Knowledge and capital. Knowledge
comes through experience and a will to
learn. Capital comes from accumulation
of personal wealth or borrowing
someone else’s wealth. Because of our
history, there are many people who
have been denied opportunities to learn
or acquire capital.
How is the IDC trying to help
entrepreneurs overcome these
barriers/obstacles?
The IDC is a development financing
institution. It has a government
mandate to develop the economy in
areas where the private sector is either
not operating at all or is failing to
operate efficiently. IDC seeks out
opportunities to invest in businesses
that will aid in the development of
those parts of the economy for instance
in poor regions, townships, previously
disadvantaged individuals, especially in
sectors such as agriculture, small-scale
mining and jewellery, tourism,
healthcare, education, and
manufacturing. The IDC tries to make it
easier for people to access finance,
especially if their projects have a high
developmental impact, although the
first criteria that is always considered is
the financial viability and sustainability
of the project. The IDC funds those
projects that are financially viable in a
sector of the economy that needs to be
developed and where the owners have
difficulty raising the finance.
In addition to helping entrepreneurs
with the necessary capital, which
indirectly gives them the opportunity to
acquire the practical knowledge they
need, the IDC has a business support
programme that directly helps
entrepreneurs to use consultants and
mentors to pass on their knowledge
rapidly and effectively.
What are the most important things an
entrepreneur should consider when
starting their own business?
Market research. Key questions to be
answered include: Is there a business
opportunity? Is it something that
customers need? Who is the customer,
how much will the customer spend and
how many customers are there? How
much will it cost to make the product or
deliver the service? Where are the
customers and how are the customers
going to interact with the business?
Which key people must be in the
business to make the product or deliver
the service? What special tools,
equipment or knowledge is required?
Are these available in the marketplace?
What will be uniquely different about
the product or service that will make
the customers come to them and not
somewhere else? Are there any special
relationships that can secure the
business e.g. contracts with clients,
contracts with suppliers? Who will the
owners be? How much money is
needed to start the business? When can
it be repaid? Where can it be sourced?
What do you look for in an entrepreneur?
The ability to sell a business concept. A
good knowledge of financial
management and how to both make a
profit and return the money invested in
their business. Drive, determination,
energy, tenacity, honesty.
Once an entrepreneur has got their
business off the ground, what kind of
support is available from the IDC to help
them to grow their business?
Additional finance for future business
expansion and a range of services from
the Business Support Programme.
What’s the best/most important advice
you’d give to an entrepreneur?
Keep coming up with new ideas. Don’t
take no for an answer. Take time to plan,
review as well as do. Try to get partners
on board as it is always easier to share
the load and have a team working on
the business.
Do you think it’s possible for an average
South African to start up a business with
nothing and become a huge success?
Always. Business is not rocket science. A
good idea is only good if it can attract
the necessary capital to get the
business started. By learning from
mistakes, and potentially failing a few
times, any South African going into
business will learn how to grow their
business and ultimately turn it into a
success.
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