SMEs are once again in the background. Very little new is going on which is new. There is a SME conference in Bloemfontein 26 and 27 July. Contact the Bloemfontein Chamber of Commerce for details.
The conference appears to be different to the run of the mill, so here's hoping it is.
Another finance related conference will take place in November with the KZN Treasury the possible sponsor. This too should be an unusual conference. I will provide more info as time progresses.
New info will be advised as it becomes available.
Showing posts with label opportunity. Show all posts
Showing posts with label opportunity. Show all posts
Sunday, July 22, 2012
Sunday, April 29, 2012
SMEs - why so many start-ups fail
I never stop being surprised at the overall low level of quality of start-up business ideas/concepts in South Africa. Way too many people are being pushed and pulled into the world of entrepreneurship, and yet they would not even survive in a protected franchise environment as a business owner as opposed to an entrepreneur.
Research has shown that a clear harvest plan and business model are the two key starting criteria for a successful business. Anecdotal evidence I have accumulated over the years points to the validity of this research.
I find it depressing that so many people know so little about starting a business. I think a large contributor to this poor situation is due to the extensive role of government in SME development. Would-be business owners are seldom evaluated properly, mainly because the evaluators themselves are incapable of assessing them. Development capital is handed out by accountants and bankers without any view to the entrepreneurial metrics, and a major emphasis on credit and financial metrics.
I believe that the identification of the correct opportunity is half the battle won. A business essentially requires the following activities to occur in order to exist:
1. Sales management
2. Technical skills management
3. Admin management
4. Financial management
5. Marketing management
Marketing, financial and admin management can all be outsourced. Marketing consultants and accountants are a dime a dollar.
The technical skills and the ability to sell the product or service are however a whole different story. So if the correct opportunity has been identified, the would-be business owner has the technical skills and the ability to sell, who cares whether his financials are correct. Do them for him!! Manage them for him. However the problem is that here we will try to make every SME owner an accountant and business plan writer. No one is evaluating the OPPORTUNITY. This is where they fail - before they even start!!! This is why so many markets are so heavily over-traded. Sign writing, taxis, hair salons, funeral parlours, loan outlets spaza shops, garden services, pool services, etc. That is why so many fail.
I do defer here to a number of private sector organisations who do this well such as Business Partners and GroFin. However, they are the exception rather than the rule. There are others that I have not named, so please do not abuse me.
We need to change our focus in order to create more success and fewer failures. We will consider the harvest plan in the next article.
Friday, December 31, 2010
SME - types of opportunities
The starting point for me with writing this document was Prof Mark Casson from the University of Reading on the UK.
As an economist he wanted to know how many opportunities there were and who decided who got which opportunities.
I did a little desktop research as I found the question intriguing. My research revealed the following. Opportunities vary in complexity. Therefore the skills, knowledge and experience needed to sell fruit to people at a taxi rank in a developing country is minimal. However, at the other end of the scale, identifying two companies for a merger, and then succeeding in achieving a merger between the two, requires a high level of skills, knowledge and experience.
So the first thing to note is that opportunities can be graded from extremely simple through to extremely complex. Similarly, the simpler the opportunity, the more of them there are, and the converse is also true for complex opportunities.
The second thing to note is that as complexity increases so too does the profitability in respect of both % and actual value. While you may be selling oranges at the taxi rank for US $1, the merger could be a US $10bn deal.
Therefore the question must be asked as to whether you are looking for simplicity or complexity when looking for a new business opportunity?
Bear in mind that your ability to handle complexity will be informed by your education and experience.
How complex is your business or your new idea? Here in South Africa there are too many copy cat entrepreneurs. They are lifestyle entrepreneurs simply looking for an easy buck. I have seen very very few business plans that have made me sit up and say wow. However, we can do it, and this is evident when we look at the number of world leading products designed in South Africa.
As an economist he wanted to know how many opportunities there were and who decided who got which opportunities.
I did a little desktop research as I found the question intriguing. My research revealed the following. Opportunities vary in complexity. Therefore the skills, knowledge and experience needed to sell fruit to people at a taxi rank in a developing country is minimal. However, at the other end of the scale, identifying two companies for a merger, and then succeeding in achieving a merger between the two, requires a high level of skills, knowledge and experience.
So the first thing to note is that opportunities can be graded from extremely simple through to extremely complex. Similarly, the simpler the opportunity, the more of them there are, and the converse is also true for complex opportunities.
The second thing to note is that as complexity increases so too does the profitability in respect of both % and actual value. While you may be selling oranges at the taxi rank for US $1, the merger could be a US $10bn deal.
Therefore the question must be asked as to whether you are looking for simplicity or complexity when looking for a new business opportunity?
Bear in mind that your ability to handle complexity will be informed by your education and experience.
How complex is your business or your new idea? Here in South Africa there are too many copy cat entrepreneurs. They are lifestyle entrepreneurs simply looking for an easy buck. I have seen very very few business plans that have made me sit up and say wow. However, we can do it, and this is evident when we look at the number of world leading products designed in South Africa.
Sunday, May 17, 2009
SMEs in South Africa - a big opportunity
Last week we looked at one of the biggest obstacles to SME development in South Africa. This week we look at some of the big opportunities available to SMEs in South Africa.
One of these opportunities are the government funded activities such as marketing assistance. The government funds many interventions which have been shown to be of enormous financial benefit to the SME. To get a handle on these, go to the DTI website at http://www.thedti.gov.za and spend some time reviewing all the opportunities available to you for accessing government funding to help your business. You have to work at this as government itself markets these amazing opportunities very poorly.
Another opportunity is the broad base of useful information and research available from South African universities, South African Department of Statistics, SARS and the DTI. Look at their websites and the university libraries to identify information useful to you and your business. Remember that knowledge is power, and therefore you need to gain as much useful and current information as is possible. Look particularly through dissertations prepared at the local university as it is normally research based upon local businesses.
One of these opportunities are the government funded activities such as marketing assistance. The government funds many interventions which have been shown to be of enormous financial benefit to the SME. To get a handle on these, go to the DTI website at http://www.thedti.gov.za and spend some time reviewing all the opportunities available to you for accessing government funding to help your business. You have to work at this as government itself markets these amazing opportunities very poorly.
Another opportunity is the broad base of useful information and research available from South African universities, South African Department of Statistics, SARS and the DTI. Look at their websites and the university libraries to identify information useful to you and your business. Remember that knowledge is power, and therefore you need to gain as much useful and current information as is possible. Look particularly through dissertations prepared at the local university as it is normally research based upon local businesses.
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