Entrepreneurship has become a buzzword in South Africa and is often punted as one of the ways to help kickstart the sluggish economy. It makes sense for people to start their own businesses as not only are they empowering themselves and building their own livelihoods, but even the smallest of businesses contribute to national development.
Research and statistics from across the world show that SMMEs tend to be the biggest job creators, far outstripping the corporate and large established businesses that used to drive innovation and economic growth during the 20th century. The picture is no different in South Africa, where the established mining and industrial behemoths that built the country’s 20th-century economic growth story are today known for restructuring, downsizing, job cuts and even investment offshoring.
South Africa’s future, like that of most developing economies, is in growing and nurturing start-ups, smaller businesses, and even individual survivalist entrepreneurs. But in South Africa, entrepreneurs face a myriad of challenges to start a business and keep it running. These especially centre on access to financial support and skills development, among others. According to ongoing research by the Heavy Chef Foundation, which is a learning platform for entrepreneurs and is designing a programme for disconnected entrepreneurs, engagement and learning from other business people is the best way to develop.
The foundation researches the enablers and barriers to entrepreneur development, surveying the operational environment for and listening to entrepreneurs on the ground, especially “disconnected” segments of entrepreneurs. Heavy Chef describes “disconnected entrepreneurs” as those that start and sustain their enterprises in marginalised communities with limited access to the financing, training, information, and collaboration networks that encourage growth and risk-taking.
“Engagement needs to prioritise community-led learning by applying a participatory pedagogy between peers,” says the foundation’s CEO, Louis Janse van Rensburg. “… entrepreneur learning cannot happen in isolation. Entrepreneurs, especially those in disconnected communities, require support and resources of all types – things that help create an environment that enables better and more focused learning but also rewards learning itself.”
He cites examples from conversations the foundation has had with entrepreneurs in Khayelitsha, Cape Town, and other marginalised communities, on what they need to sustain their businesses. “One needed money to pay accreditation fees that will allow him to operate with credentials. A few in the health and fitness sector were specific about the type of gym equipment they need in order to serve more customers more regularly. Another was battling anxiety and would value ways of helping her stay focused on work,” he says.
A more in-depth analysis of the foundation’s research on enablers and barriers to entrepreneurship development offers several insights on what support is needed. Entrepreneurs have a long list of types of support they value, with money being the most prominent, followed by networking, skills, equipment and workspaces. The need for entrepreneurs to apply for financial and/or skills support is on the increase, and they have a discernible willingness to apply for financial support, especially with formal financial institutions.
Also, entrepreneurs are increasingly looking beyond government and formal education institutions when applying for skills support. However, there is a high level of ambiguity about the reasons why entrepreneurs do not qualify for financing or skills support, including not receiving a response, incomplete documentation, or not matching the criteria.
Many of the respondents say they will not apply for support again because of a lack of belief that they will qualify. “To oversimplify a bit, we have a classic lost-in-translation issue on our hands. The entrepreneur community and institutions of support are all in it together, unfortunately building a metaphorical Tower of Babel. Each righteous in their conviction that the other is the source of misunderstanding,” says Janse van Rensburg.
He believes that the entrepreneur community has a very high level of skepticism towards institutions offering support. They see promises of support being made but actual support being provided is shockingly thin in supply.
“Surely there are easy wins to cross the divide. Where’s the canary in the coal mine? Small examples of doing things right i.e. high hit rate of successful applications? Let’s look at those. Extrapolate the ingredients and share the recipes, so to speak.”
Ironically, this view echoes the opinion recently shared by Small Business Development Minister Stella Ndabeni-Abrahams, who warned of a disconnect between the government’s genuine desire and attempts to help entrepreneurs, and the reality that many of them cannot access this support, sometimes because of simple hurdles such as not understanding the requirements and the language utilised in application forms.