In 2010 the Global Entrepreneurship Monitor (GEM) Global Report 2010 presents South Africa as a county with only 16.7% people with entrepreneurial intentions; and 25% having a fear of failure to venture into business. Apparently it is this fear that contributed to entrepreneurial ventures failing to take off.
According to Endeavour’s White Paper on the State of Entrepreneurship in South Africa, a number of factors are a stumbling block for aspiring entrepreneurs to venture into business. Some of these factors have to do with what is referred to as the country’s financial and operating environment “being unsupportive of entrepreneurs” when it comes to policies and regulations as well as access to capital. While there could be reasons for such an assertion at the time the White Paper was written, the environment is quite enabling for aspirant entrepreneurs to venture into business in South Africa. In the past the main source of start up capital has been the banking sector. However a number of institutions have been set-up to provide start-up capital for business ventures in South Africa. These include agencies like the National Youth Development Agency (NYDA); the Development Bank of Southern Africa (DBSA) administered Job Creation Fund, Independent Development Corporation (IDC), and a host of private sector initiatives.
In a country with over 25% unemployment rate like South Africa, entrepreneurship is the way to go. In fact South Africa is arguably a country with enabling policy and regulatory environment to start-up and support business ventures. The Department of Trade and Industry currently runs a R200 000 worth marketing and branding support to small businesses. This initiative is meant to support business ventures with much needed capital to prop up businesses in South Africa.
Small businesses rely on government and private business opportunities to sustain themselves. This means the public and private sectors would put up calls for proposals and the entrepreneurs will pitch for such businesses. Truth is such business ventures are not sustainable as they tend to fizzle after the funding period. The public sector, read government, also makes things extremely difficult for small businesses to grow due to enormous red tape when it comes to paying for services rendered.
The economic recession that has hit the world and South Africa recently makes business initiatives vulnerable to forces that hinder progress for business sustainability. It is in this context that the country’s business sector, especially small business needs business leadership and/or entrepreneurship with high levels of expertise to grow and sustain business enterprises. A business leader has a responsibility to ensure that that a business enterprise is commercially viable and sustainable. And for a business leader to provide effective leadership for any business venture some levels of expertise should be reached. These levels of expertise can only be reached through acquiring relevant business development knowledge and skills.
Leaders and/or managers who want to make it big in business need exceptional business leadership and/or entrepreneurship skills. South Africa has lot of academic and non-academic programmes to hone business and/or entrepreneurship skills. UNISA’s Masters in Business Leadership (MBL) and a host of Masters in Business Administration (MBA) programmes are some of the examples in this regard. There are specialised leadership and management programmes that can be pursued to hone business and/or entrepreneurship expertise, and these include arts and culture management programmes, cultural leadership programmes, strategic leadership programmes for corporate development.
Entrepreneurship programmes also include entrepreneurship mindset programmes. These are programmes that seek to instil corporate shared values through agility, adaptation and rapid response to market opportunities. Such programmes also instil confidence to think, behave ad act with business interest in order to realise the company’s intended purpose for the beneficial growth of stakeholders.
Good business leadership is about the Vision, and effective business leaders must be able to give direction for a vision to help sustain the business. Aspirant business leaders should take cognisance of that having a vision for business is not (always) enough – the vision must be articulated clearly for other business team members to buy into it. Business leaders must passionately drive the vision and see it through for sustainability of the company. Experts says that passion is contagious, and this means a Vision that is passionately articulated is likely to have buy-in and everybody will be committed to it.
Good business leadership is about communication – i.e. communicating clearly and passionately.
It is important that aspiring entrepreneurs are made aware of the factors that fail or flounder business ventures in South Africa. These factors would need to be taken note of and measures should be put in place to anticipate and address them.
One of these factors is lack of entrepreneurship skills and preparedness amongst entrepreneurs. Aspirant entrepreneurs get into business without having a solid idea of what is expected of them. They are found wanting in the basics of starting and running business. Government, through initiatives like the NYDA, Khula Enterprise Trust, have programmes that facilitate short programmes for starting business. Such programmes help with knowledge and skills on how to develop a business plan.
There is also perception and attitudes towards entrepreneurs where people who initiate business ventures find themselves less respected and recognised, especially if those business ventures collapse. Such negative attitudes and perception also have to do with the fact that corporate career path is more preferred than initiating a business venture. Pursuing a business route contributes to addressing social challenges of the country in that it creates job opportunities and contributes positively to the country economic growth. Resources should be invested to initiate and sustain business ventures in townships and create township entrepreneurs. Similar efforts should also be made for village entrepreneurs. Specialised business development programmes that also take into account language dynamics in the townships and villages should be implemented.
There are some leadership and entrepreneurship rules and qualities for success in these fields. Central to all these rules and qualities is Adaptability, and this is about anticipating problems and instituting means to respond to those challenges. It is like ability to institute risk analysis and risk management. Purposefulness is also one of the critical rules and qualities for successful business leadership and entrepreneurship. It’s about translating the vision to a strong sense of purpose and inspiring a drive in others to strive towards that vision. Business leaders and entrepreneurs must also be assertive to ensure that what is expected of team members is clearly stated.