www.itsmybusiness.co.za

IT’S MY

December 6 2009

www.itsmybusiness.co.za

IT’S MY

DECEMBER 6 2009

‘Buying afranchisechange dmy life’

Page 4

A closer look atconstruction,retail andm a n u fa c t u r i n g

Pages 9, 10 & 11

EVE’S PARADISEA JOURNEY FROM SOFT SKILLS TO SOLID EARTH PAGES 6 & 7

DECEMBER 6 2009: IT’S MY BUSINESS / Sunday Times2 3DECEMBER 6 2009: IT’S MY BUSINESS / Sunday Times

Do it yourself, butWhen money is tight, homeowners tend to repair their propertiesrather than move house. Hendri Pelser went to find out ifhardware stores can make you money in this economic climate

up in three years’ time. You willstill be able to get in later but yourmargins will probably be lower.”

Seasonality and product rangeshould also be considered and dueto the nature of the sector, cashflow is vitally important as capitalbecomes tied up in stock.

Linda Smith, the owner of LFSHardware in Eldorado Park, hasbeen in the game since 1996.

Although she started off as anindependent, Linda joined a buy-ing group three years ago.

“The buying group serves mebetter because I still have indi-viduality and I can interact withmy suppliers directly. At the sametime, I have the muscle of bulkbuying power. As an independentit is very difficult. We used to buyfrom the same suppliers but didnot get the same bulk prices the

buying group can negotiate. Theyput you on a cash basis and oftenthe approach is ‘if you don’t like itthen tough’.”

Linda says it took her about twoyears to get her stock mix rightand adds that people should neverneglect cash flow in this retailspace. She believes d ive r s i f i c at i o nis important and while the storestocks DIY and hardware goods,the business also acts as a cementand building supplies wholesalerto competitors in the area.

“Even if you only make a 5%profit, this is fine because if yousell enough volume, you will get ar e b at e , ” she says.

Build it’s retail operations man-ager, Hans Koekemoer, expectsthe market to remain tough forthe next six months but adds thatgrowth will continue thereafter.

DIY Depot shares this senti-ment; director Dani Machet sayssales will improve once banksstart to relax lending criteria andthe housing sector picks up.

Fellow director Mark Reevesadds to this, saying that in ruraland peri-urban areas, the marketis still quite healthy and evengrowing at the moment.

Mica CEO Clifford Buchler s aysgood entrepreneurs in urban ar-eas can also make money in theDIY space right now, as con-sumers will rely on a store ownerfor advice when maintaining orrenovating their homes withoutthe help of contractors.

Chris Argyrou, Warrior Paints& Hardware’s marketing andsales director, says that despitethe economic climate, it is up toeach entrepreneur to go out andsecure market share: “We all have

to up our game”.Ja c k ’s Paint & Hardware op-

erations director, Chris Russell,echoes this, saying the currentclimate will force operators to be-come more streamlined and thatthis will translate into better prof-its during the good times.

Plus Ten Hardware Distribu-tion director Norman Jacksonadds: “There is so much oppor-tunity in South Africa. The pro-cess of buying groups and evenfranchises has only just begun —

BUSINESSMAN AlanKnott-Craig once flew toLondon to meet his thenboss for just half an hour.

The 16-odd hours on the airplanewere well spent, he says, for at themeeting the budget was signedand sealed and they could get towork — i m m e d i at e ly .

“It would have taken months ifwe had done it any other way.There is no more productive wayof doing business than meetingpeople face to face.

“I spent at least 90% of myworking day meeting and talkingto people,” says the retired Vo -dacom CEO.

Alan is by no means the onlyexecutive to understand the im-portance of face-to-face meetings.

“There is an understanding inthe current climate that we haveall had to pull back on travel,” aSaudi Arabian executive was re-cently quoted as saying. “But asthe economy improves, we willstart to see damage to the busi-ness if we are not out there. Bot-tom line: when I am with the clientless, I’m bringing in less rev-enue.”

It is with this in mind thatBritish Airways has launched itsbusiness opportunity grants, aR29-million initiative aimed at en-couraging local small-to-medium-sized South African businesses totravel in an effort to see their

businesses grow.“The economic downturn has

seen business travel budgets in-ternationally slashed by morethan 56% over the past year andSouth Africa has been no excep-tion, with airlines seeing consid-erable contraction in corporatebookings,” says Sue Botes, BritishAirways commercial manager.

“This is a really tough envi-ronment in which to do businessand we’re hoping that, throughthis initiative, SMEs will have anopportunity they would not havehad otherwise. By invigoratingtheir business travel, new oppor-tunities can open up and they cantruly experience the benefit ofdoing face-to-face business.”

British Airways will award 50small-to-medium enterprises aye a r ’s worth of travel to anyBritish Airways international des-tination through the programme,which has been successfullylaunched in the US and Europe.

In a survey by Harvard Busi-ness Review Analytical Services,95% of respondents say face-to-

face meetings are key to successin building long-term relation-ships, while about 87% said theyare essential when sealing a deal.

But for most SMEs, travelling tomeet business partners (especial-ly internationally) is just adream.

“It is very difficult to be top ofother people’s agenda if you arenot present,” says one of the 2 300respondents in the Harvard study.“Face-to-face meetings speed upalignment and decision-making.”

Nkhensani Nkosi, founder ofStoned Cherrie, is an advocate ofthe BA opportunity grants ini-t i at ive .

“This initiative gives SMEs theopportunity to develop into newmarkets in this challenging eco-nomic environment,” she says.

Alan says the BA initiative is anideal opportunity for a small busi-ness to make its mark.

“To lose opportunities just be-cause times are tough and youdon’t want to spend money ontravel does not make businesssense. Through this i n i t i at ive

there is no reason not to traveland meet existing and potentialclients. This is the ideal oppor-tunity to grow a business.”

According to the Harvard studythere is no doubt that “meetingtechnology” is on the rise, butbusiness executives still believethat face-to-face meetings are es-sential for success, offering ben-efits that cannot be replaced bytechnology.

“The value of face-to-face meet-ings is incomparable and it isencouraging to see initiatives thatsupport SMEs through these dif-ficult times, giving them a chanceto expand into new markets,” s aysAlan.

SMEs from any industry em-ploying 250 people or less areeligible to enter, says Sue.

“Entries can be made online atwww.ba.com/safrica-grants. Theclosing date for entries is Febru-ary 19 2010. After that a panel ofjudges will look at each appli-c at i o n . The 50 winning SMEs willthen be chosen and the winnersannounced on March 19. The tick-

ets awarded to each of the win-ners will be valid for a year.”

In the applications, a case forthe unmet business travel needsof the SME will have to be madeand applicants will have to outlinetheir objectives for 2010 and howbeing awarded a grant would ben-efit their business.

Whether it is a sit-down ap-pointment with a potential client,buyer, investor or a check-in on anoffice that has not been visitedbecause of budget cuts; the ini-t i at ive allows the SME freedom touse the tickets to suit their needs.

“The programme is designed tohelp budget-conscious businessesget where they need to go, phys-ically and financially,” says Sue.

“The 10 return business ticketscan be used entirely at the SME’sdiscretion.”

British Airways will cover thecost of the fares, but winningcompanies will be responsible forpaying taxes, fees and charges.

According to Sue, “it does notmatter what industry they are in,be it a laundromat owner or an ITbusiness”.

She says Alan, along with apanel of British Airways exec-utives and people not connectedto the airline, will judge the en-tries. “It will come down to thebusiness plan submitted and howbusiness travel can benefit theSME.”

Flying to new horizonsTravel may broaden the mind, but it also clinches thedeal. British Airways is encouraging small and mediumenterprises to fly high. Liesl Venter re p o r t s

THE do-it-yourself andhardware retail sectorwas not spared by the re-cession.

But, because of the nature ofthis industry, some of its sub-sectors are still performing rel-atively well, with homeownerstending to repair and upgradetheir houses instead of buyingduring slower economic times.

Th e question for existing andprospective entrepreneurs iswhether there is an opportunity tomake money in the sector.

The answer is not clear cut: theshort-term expectations are notgreat and everyone is waiting forthe upswing to gain momentum.

But entrepreneurs with accessto capital can invest now andcream it later.

The DIY and hardware retailsector can be split into threebroad categories — 1) general DIYand hardware, 2) building sup-plies and 3) industrial supplies.

While the first sub-sector hasbeen relatively insulated, theother two have taken a pounding.

The industry can also bedivided further. Some stores gettheir goods independentlythrough wholesalers; others joinbuying groups to pool their buy-ing power and secure discountsand franchises.

Glass, hardware and paintmake up 7% to 8% of all retail tradein the country. According toStatistics SA, the sector experi-enced a 23.1% year-on-year de-cline in sales (at constant prices)in June. The biggest reason wasthe decline in building and man-ufacturing activity.

But there is definitely still mon-ey to be made if one looks at thegrowth experienced by some in-dustry players such as Build it.This buying group generatedmore than R4-billion in sales dur-ing their last financial year.

Evan Walker, a retail analyst atRMB Asset Management, says themarket will consolidate over thenext three years and he warnsindependents against makinghasty decisions.

“I just see the bigger playersbecoming bigger at the expense ofindependent retailers. If you are

looking to open, I think you shouldlook at a franchise model. I wouldbe very nervous as an en-trepreneur to venture out on myown over the next five years.”

Economist Tony Twine ofEconometrix says the economywill only really pick up once therest of the world has normalised.

“We are probably likely to haveone more false start (in early 2010)before sustainable growth re-tu r n s , ” he says.

Although both Tony and Evanpaint a negative picture of theoperating environment, they aredefinitely not saying that oneshould not invest in a business.

“You want to invest when timesare tough and not when you are inthe middle of a boom,” Tony says.

“The smart guys with capitalwill be able to get in now and clean

Investment and return

don’t be in a rush

EACH franchise or buyinggroup has its own formula onhow much money is needed toopen a DIY, hardware orbuilding supply store.

There are some rules ofthumb.

A general store can rangein size between 100m² and450m².

Extra space is needed if youwant to sell building supplies.

A turnkey operation ofabout 400m² in the DIY or

paint area will costR2-million to R4-million.

The stock componentgenerally makes up about50% to 70% of this amount.

Paint is usually moreexpensive than DIY goods.

Franchises and buyinggroups secure products forbetween 10% and 20% lessthan independent buyers,depending on the type ofst o c k .

Your return on investment

also depends on what is sold.Plus Ten Hardware

Distribution director NormanJackson says that buildingmaterials generally generatean 18% to 24% gross profit(GP) margin, whereas DIYand hardware can bring in aGP of between 33% and 38%.

Industrial supplies have aGP of 26% to 30%.

Some franchises though,report slightly lower profitmargins.

Consumers willrely on a storeowner for advicewhen maintainingor renovatingtheir homes

HAMMERINGAWAY: DIYshop ownersFreddie andLinda Smith

Picture: KATHERINEMUICK-MERE

there are hundreds and hundredsof opportunities left.

“It is important to understandwhat you are investing in. In theold days, if you enjoyed fixingthings, you could use your pen-sion money to open a hardwarest o r e . These days it is much morecomplicated and you need a de-cent back-office system. You alsoneed to understand that productknowledge and service are thedifferentiating factors.

“If you are willing to play thegame, there are opportunitiesava i l ab l e . ”

HEAT OF THE MOMENT: DIY entrepreneurs are advised to stay cool, even when the sparks start to fly Picture: MARIANNE SCHWANKHART

DECEMBER 6 2009: IT’S MY BUSINESS / Sunday Times4

Taking control of yourlife, and making money

Changing careers can be daunting, but nothing is as liberating as taking chargeof your destiny. Liesl Venter found out how buying a franchise changed a life

HAPPY IN HER WORK: Kumon franchise owner Elmarie King at Horison Primary with pupils Amogelang Nathane, Remoneilwe Mngomezulu, ChareseJordaan, Bernice Jordaan and Lesedi Nathane Picture: KATHERINE MUICK-MERE

‘I feel as ifI am making adifference to thec h i l d re n ’s lives’

DR ELMARIE King, 42,has never regrettedbuying a franchise. Shesays it is probably the

best career decision she hasmade.

“It may sound corny, but Ireally took my destiny into myown hands. It changed my life.”

Elmarie was looking for achange when the chance to buy aKumon centre came up.

Ku m o n is an educationalmethod which uses maths andEnglish skills to develop chil-dren’s potential. The aim is toencourage them to love learningby improving self-esteem, whileencouraging self-discipline and agood daily study habit.

“I was trained as a social work-er and had spent years workingfor the Wits Deaf Associationwhere I had gone through theranks until I became a director.My husband and I had also trav-elled a bit and had worked in theUK for several years, and on myreturn I had found work in Pre-toria. It was, however, time for achange.”

Going back to school seemedlike the perfect solution so shedid an IT course at the Universityof Johannesburg, convinced theworld of programming was beck-oning.

“I realised very quickly that itwas not for me. I had worked withpeople my entire career andneeded that interaction.”

A newspaper advertisementbrought the much-neededchange. “It was just a small ad-vertisement about a franchiseopportunity. I started exploring avariety of options, and finallycame across Kumon. I applied,was accepted and the rest, asthey say, is history.”

Today she owns two Kumoncentres in the Johannesburgarea — one in Robertsham andthe other in Horison.

“Initially I thought I was mak-ing a huge mistake — I did notknow anything about owning afranchise, or about maths. What Idid know, however, was that Ineeded time as I had enrolled formy PhD at Joburg University.Buying a maths centre seemedideal as it would allow me to havemy mornings free to do my re-search for my degree, and towork in the afternoons.”

She took the leap of faith andbought the centre, not realisinghow much this career changewould come to benefit her.

“Owning a franchise meant Icould spend time with my daugh-ter Courteney (who is now three).If there was a crisis she couldcome to work with me withoutany issues. It is the ideal solutionfor a working mother.”

Asked about walking out ofa full-time job into buying a fran-chise, she admits it was daunt-ing.

“I think there are various rea-sons why people make careerchanges — be it boredom, ordislike of the people you work

with, or even finances. Like manyother people it was not easy forme to make the decision, but onceI had made it, it changed my lifefor the better.”

She had to go through a se-lection process before being ableto buy a Kumon franchise. “Butthe difficult part was only be-ginning as I had to find an areawhere there was no centre or buyout an existing centre.

“Like any other franchise youcan’t have two of the same on onecorner — it will not work. I thenhad to wait for a centre to becomeavailable as I had taken the de-cision to buy an existing centre tostart off with.”

One finally became available inRobertsham and Elmariegrabbed the opportunity withboth hands.

“I had done the training courseand had all the material. I did notconsider myself a maths expert,but I fell in love with this jobimmediately. The children, andthe accomplishments, make allthe difference. I feel as if I amcontributing to their lives.”

A year after buying her first

franchise she bought a second,this time in Horison. “Both thecentres I took over were verysmall and all my efforts initiallywent into growing them.”

Finding a centre is not alwayseasy. “It becomes very compet-itive when you move into areaswhere there are already existingcentres, so much research has totake place. Like with any busi-

search what they want to buybefore they take the plunge.

“I could never own a fast-foodrestaurant. I chose a franchisethat suited my lifestyle, my per-sonality and my pocket. It worksbecause I am passionate about it,but also because it allows me thefreedom to be with my child. Iwanted that freedom — someoneelse might have other needs.”

Knowing what you want out ofyour franchise is i mp o r t a n t .

“I now have more control overmy life. If I want to grow mybusiness I can, if I want to down-scale I can do that too. It is notabout what the boss wants, butabout what you want.

“I work just as hard as when Iwas employed full-time. The onlydifference is this is mine and Ihave the freedom to manage itthe way I want to and need to. If afranchise does not do that foryou, I think it can be just asfrustrating as having a full-timejob.”

Elmarie’s top tips to potentialfranchise owners:ý Do your homework! Knowwhat you are buying and where

you are buying it. It must besomething you love and some-thing you can manage. Buying afranchise for the sake of buying afranchise is a recipe for disaster.Find out what is available andwhat suits your needs. Researchevery aspect of the business be-fore you put your money down.ý Work your way up through theranks. Education, in the class-room or in the everyday wo r k i n gworld, can never be underesti-mated. The fact that I had wo r ke dfor years as a social worker mademe a better franchise owner as Ihad life experience.ý Don’t cut corners. Being a suc-cessful franchise owner is aboutknowing that nothing happenswithout hard work. There is noeasy-win situation — it takestime and effort to get to the top.ý Don’t let finances get youdown. Not all franchises cost thesame so find one that suits yourpocket. There are affordable op-tions available.ý Think and dream big. Any-thing is possibly if you put yourmind to it. I never thought ofmyself as a mathematician.

ness you must plan and be readyfor what you are taking on. It isalso about establishing whetherthere is a need for the pro-gramme and if there is interestnot just from parents but alsofrom schools.”

Elmarie advises would-befranchise owners to carefully re-

DECEMBER 6 2009: IT’S MY BUSINESS / Sunday Times6 7DECEMBER 6 2009: IT’S MY BUSINESS / Sunday Times

Eve’s garden of EdenA true entrepreneur isresourceful, can solveproblems and identifyopportunities, asHendri Pelser found out

EVE Ntseoane is tinkeringin the farm workshop. Ithas taken two days to dis-mantle the tractor and as

she fiddles with the engine blockit is difficult to see even a spot ofgrease on her shirt.

“The crankshaft went,” shesays, then smiles. “Three yearsago I did not even know what acrankshaft was!”

Dressed in her working bootsand jeans, the owner of Eve’s EdenFarming Enterprise nearFochville in North West walksbriskly towards her new chickencoops — there is much to be doneand little time in which to do it.

Eve has been tending her 539ha“garden” for three years. Gettingher hands dirty every day is adream come true.

She gave up corporate life al-most a decade ago when she leftEskom as a communications pro-fessional to start a catering com-pany. Catering seemed like a goodidea as she has always been in lovewith producing food. After eightyears of preparing food for others,however, Eve had to face the truththat catering was not her calling.At the same time, competition hadincreased and her margins wereunder p r e s su r e .

“My uncle was a farmer and Iused to work for him duringschool holidays. I always had thispassion for producing from thesoil,” she says.

She decided to follow in hisfootsteps and become a farmer.

Eve might have all the passionfarming requires, but land doesnot come cheap. Eve started re-searching government supporti n i t i at ive s .

She approached the former De-partment of Land Affairs for agrant and persuaded it to forkover some cash for a farm.

“I had to identify the land andthe department had to decide if it

was viable,” she says.She had made up her mind to

focus on maize and sunflowers.She eventually found a working

farm, received a grant and gave upcity life.

But she knew her abilities andknowledge were lacking. She hadstarted attending courses offeredby Grain South Africa even beforeapplying for the grant.

Eve also approached the De-partment of Trade and Industryfor export training, as well as theItalian Trade Commission inSouth Africa.

“I went looking for every pos-sible person who could help me,”she says.

She also spent some time withthe farm’s previous owner to en-sure that she understood her newland intimately.

“I spoke to the farmer and heshowed me his books. I liked thesoil type and knew that this farmwould allow me to diversify.

“I had to learn what acrankshaft looked like, and whereyou poured oil into the tractor.

“I was a person with soft skillsand I was entering a differentwo r l d . ”

Eve might be a farmer, but anentrepreneur hides beneath herstraw hat.

Maize and sunflowers were on-ly the beginning and she recentlysecured another grant to builtchicken coops.

She is now securing contractsto supply an ab att o i r .

A flock of goats will be joiningthe farmyard soon, and Eve hasearmarked their milk for cheese.

Her diversification strategiesare testament to her en-trepreneurial abilities and she ex-plains that adaptation and flex-ibility are the keys to success inbusiness.

In the farming world this mightmean having to get up early on a

Saturday morning to plough afield if it happened to have rainedthe previous night. In the busi-ness world it means looking foropportunities and positioningyourself to make the most of everyp r o sp e c t .

As a result, she has appointed amarketer and a food scientist toinvestigate the possibility of turn-ing her crops into starch.

“Starch is used as a thickener inalmost every type of food pro-duction, and I intend to export

what I produce — I want to set upa factory on the farm.

“My initial focus was on pri-mary production but as a businessperson you need to be innovativeand think out of the box.

“You need to grow your busi-ness to create and sustainwe a l t h . ”

Eve says she believes that herhumble farm will one day be theheadquarters of a large and suc-cessful business, and she is pre-pared to do everything in herpower to make this vision ar e a l i ty .

“Business does not need anapologetic leader — you have to beon your toes the whole time andpush, otherwise you will not sur-v ive , ” she says.

“I came into this businessknowing I would not make moneyin the first year. It is like climbinga ladder — you have to start at thebottom step and work your wayup.

“You need to surround yourselfwith people who are in a similarposition and who can help you.

“Then, you should not beashamed of admitting your fail-

ENGINE: Three years ago Eve Ntseoane did not know what a crankshaft was. As a learner farmer she has had to get to grips with the innards of tractors, among other things Pictures: HENDRI PELSER

ures because somebody elsemight just have the advice youneed. You learn from hardship.”

Being a black female farmer in awhite male-dominated world wasnot easy, but Eve says her time asa corporate communications pro-fessional came in handy.

Initially, she faced oppositionand resistance not only from otherfarmers, but from her own staff aswe l l .

Some of the male farm workerswere not pleased about takingorders from a woman; Eve sayssome of the farmers in the area didnot exactly know how to treat her.

Some service providers tried topull the wool over her inexpe-rienced eyes.

Nevertheless, her people skillscame in handy and she took careof every situation as it arose.

Some of the farm hands left andEve approached her mentors fromGrain South Africa for advice onseeds, chemicals and farm man-ag e m e n t .

“I have a group of good workersnow who share the vision. Wework as a team and they under-stand that, if something goes

wrong on the farm, it affects all ofus.

“At first, the other farmers inthe area closed up. I did not knowAfrikaans when I came here andtook it upon myself to learn thelanguage. I now have good re-lationships with my counterpartsand they help me when I’m inneed.”

Eve recently visited Italy dur-ing a trip sponsored by the coun-try’s trade commission to inves-tigate clustering and the localSME sector.

This experience and the en-counters lived through when shemoved to the farm have led her tothe conclusion that the SME sec-tor in South Africa needs tochange. In South Africa, peoplework in silos. But we are all de-pendent on each other.

“We need to understand that ifone (small) business fails, otherswill fail. For example, if I don’treceive the right types of seedsfrom a supplier then I won’t pro-duce enough crops to sustain thefarm. If I fail, they lose a customer.We need to become a businessc o m m u n i ty . ”

DOWN ON THEFARM: Beneaththe straw hat,the brain of anentrepreneur isticking away

‘I wentlookingfo reve r ypossiblepers onwhocouldhelpme’

VUVU Bengane did notknow where to gowhen her small print-ing business burnt

down. Her jar, as she says, wasempty. She was at the point ofgiving up when she was intro-duced to business incubatorRaizcorp.

“That changed not just myoutlook on my business, but whoI was,” she says.

“They took me under theirwing and through their learn-ership I came to be not just abetter entrepreneur but possiblya better person. I know what myvalues are, my needs and whereI am going. I am the driver of myown destiny.”

Today Siya Phambili Copy &Print is a thriving small businessin the northern Johannesburgsuburb of Bryanston, with largeclients including Dimension Da-ta and Eskom.

Vuv u ’s story is not out of theordinary, says Gavin Friedman,head of enterprise developmentsales at Raizcorp.

“About 96% of businesses failwithin the first 10 ye a r s , evenmore so in South Africa wherewe have fewer entrepreneursper capita than, for example,Ug a n d a .

“Wavering funds, blacklistingand low self-esteem become areality for these entrepreneurswho try but don’t succeed.”

To truly advance the growthof entrepreneurship in the coun-try, it was clear that a solutionwas needed, especially for thecorporate sector, which isobliged to be involved in en-terprise development, a compo-nent of the broad-based blackeconomic empowerment codesof good practice.

“But throwing money at aproblem is not a solution,” s aysRaizcorp CEO Allon Raiz.

“Enterprise development as anational strategy will becomemisguided and ineffective if it isdriven by volumes and not thequality of entrepreneurs.”

It is for this reason that Raiz-corp, a for-profit, unfunded busi-ness incubator, prefers to referto itself as a “p r o sp e r at o r ”.

“For us it is about offering aninnovative and holistic solutionto South Africa’s challenges forgrowing the small business sec-tor,” says Allon.

“We are about creating pros-perous entrepreneurs and grow-ing profitable businesses.”

Enterprise development is de-fined by the government as theassistance given to en-trepreneurs or would-be en-trepreneurs by a company tohelp the entrepreneur’s busi-ness become su st a i n ab l e . It is nolonger just a nice-to-have.

“It is a reality if we want togrow South Africa’s en-trepreneurs. The problem is thatas a strategy it is misunder-stood. Corporates know how todo their business, they don’tknow how to inspire en-trepreneurs, how to develop

located a full-time team ofguides who focus on strategy,finance, marketing, personal de-velopment and sales, en-trepreneurs are also givenmuch-needed sales training.

“Sales is the lifeblood of anybusiness,” says Gavin.

“Improving these skills is coreto being successful. The en-trepreneurial journey is a lonelyone — we provide a communitywhere entrepreneurs can inter-act and draw strength and in-spiration from each other.”

Mark believes this is part ofthe success of Raizcorp, wh i c hsupports more than 200 busi-nesses around the country.

“We are very excited aboutthis partnership as we know thismodel will afford Nedbank theopportunity to offer end-to-endnurturing and development ofvarious companies and providea host of services, includingtraining, infrastructure, serviceproviders and capacity-buildingfor each of the beneficiary en-terprises — all under one roof,”says Mark.

Helphasa r r i ve d

For 12 entrepreneurs, a lifeline is closerthan they realise, writes Liesl Venter

them, how to encourage them.We do,” says Gavin.

It is for this reason that Ned-bank found itself knocking onRaizcorp’s door.

Mark Rose, head of businessdevelopment for Nedbank Busi-ness Banking, says the bankstarted the process of enterprisedevelopment long before the De-partment of Trade and Indus-try’s BEE codes became a re-a l i ty .

“It is not something we mustdo, but something we want to do.There is no doubt that the SMEmarket plays a pivotal role ingrowing the South African econ-omy. We want to be part oft h at . ”

By donating about R3-million,Nedbank will help 12 emergingentrepreneurs build their busi-nesses.

“There was immediate syn-ergy between us and Raizcorp,”says Mark.

“We did not just want to givemoney and walk away. We wantto see the development of theseentrepreneurs and be involvedin their progress. The Raizcorpmodel allows us that.”

The 12 entrepreneurs havestill to be identified by Raizcorp.Applicants will have to undergoa strict selection process.

“We screen our applicantsc a r e f u l ly , ” says Gavin. “It is nota quick application, interviewand then you are in.

“We make sure that the rightpeople join the programme. It isan intensive find-and-filter se-lection process. It starts with anonline expression of interest,which leads to the first interviewafter which all applicants have toparticipate in an entrepreneuri-al assessment, complete an au-dit and due diligence documents,attend another interview andthen present their business tothe final review panel.”

Those accepted undergo ayear-long learning programmeduring which the entrepreneursare given access to infrastruc-ture such as boardrooms, re-ception area, telephones andready-to-use offices.

“Professional staff is also partof the deal as they will haveaccess to book-keepers, lawyers,receptionists, accountants andtrainers.

“The learning component ofthis programme develops andhones life skills as well as busi-ness skills.

“Being an entrepreneurmeans far more than building aprofitable business.”

As each entrepreneur is al-

‘We are lookingfor people withheart, who trulywant to bes u c c e s sf u l ’

‘This programmedevelops andhones life skillsas well asbusiness skills’

The Raizcorp model, saysGavin, “is an eight-step processwhich requires commitment,dedication and hard work”.

“We are happy to partner withNedbank because, unlike manyother organisations, they trulyunderstand the importance ofenterprise development — t h atit is the one element that canturn the face of the SouthAfrican economy around.”

For Nedbank and Raizcorp,enterprise development is muchmore than a mandate from theg ove r n m e n t .

“It is easy to call yourself anincubator, get money from abank and liberally throw moneyat people who call themselvesentrepreneurs,” says Gavin.“This partnership is not likethat. Nedbank and we are look-ing for people with heart, whotruly want to be successful busi-ness owners, and are willing toput in the work.

“This is about developingSouth Africa’s future.”

DECEMBER 6 2009: IT’S MY BUSINESS / Sunday Times8

Crafting into the futureThe stitchings, weavings and carvings passed down and developedby generations are finding new inspiration in the handsof two Joburg-based women. Liesl Venter finds out more

SEDICA Davids and Chan-tal Collet are, by theirown definition, innova-tors, strategists and c at a -

lysts, but they are also creators.“We both needed to express

our creative energy through abusiness,” says Sedica. “We hadbeen toying with the idea of set-ting up a business that specif-ically harnessed the creative en-ergy of professionals throughmentoring and advising, and al-so by sharing our strong start-uptendencies with others.

“The result was Create AfricaTrading (CAT CC), which I thinkis best described as a catalystc o mp a ny . ”

One of the few women-ownedresearch, project-managementand merchandising businessesin the creative industries sector,the company has gone fromstrength to strength since itslaunch in 2006.

Chantal, an experienced cul-tural industries practitioner,brought a host of skills to thetable, as she had been involved incultural research projects, artsmanagement and skills develop-ment and training.

Sedica, with a long history inorganisational development andeducation, is an expert in human-resource management, researchand policy development.

“South Africa’s growing eco-nomic environment presents ma-jor opportunities for en-trepreneurs and innovativet h i n ke r s , ” says Sedica. “But weneed indigenous and innovativesolutions to the challenges weface. Researching craft, we re-alised it had the potential tocreate jobs where the need is thegreatest. CAT CC is about el-evating, motivating and support-ing this sector, which is poten-tially massive.”

The Gauteng Creative Map-ping Project, a 2008 study com-missioned by the Gauteng de-partment of sport, arts, cultureand recreation, revealed thatcreative industries contributeover R33-billion to the province’seconomy every year, and createdirect employment for more than60 000 people.

CAT CC, which undertook re-search for the Craft Audit ofGauteng and were involved inthe drafting of the Gauteng craftstrategy, have been in partner-ship with the department since2008, implementing the two-yearProduct Development Pro-gramme.

The project, created and d r iv -en by the department, comprisesProgramme 1, Urban Spirit andProgramme 2, Heroes’ Co r n e r .

It is a pilot project aimed atcraft entrepreneurs who are eco-nomically disadvantaged but cul-turally and conceptually very ad-va n t ag e d .

Crafting just for the sake ofcrafting has no point. “For manycrafters, it is their survival,” s aysSedica. “Our programme isaimed at emerging craft en-trepreneurs who are alreadypart of an existing enterprise(Urban Spirit) within one of thef ive municipal regions in Gaut-eng. We look at their productand, through the programme,

participants are mentored in anumber of areas, from how toprice and cost their product toensuring that their product isauthentic and unique.”

Research into the crafting in-dustry has shown that, while cre-ativity is alive and well, businessskills and access to markets areoften lacking.

“Crafters get into the pro-gramme through their local mu-nicipality, which has a databaseof existing craft enterprises intheir areas. The programme ad-ministrator ensures that appli-cations are forwarded to a prod-uct developer, who goes throughthe applications, looking at thedifferent products, and makes aselection of the candidates.”

Sedica says the candidates arethen provided with a five-daycontact period at the Craft De-sign Centre Gauteng in Sandton.

“It is part about mentorshipand quality product develop-ment using identity, heritageand authenticity in line withmarket trends, and about grow-ing your business, taking aspectssuch as market demand, trends,costing, pricing and other busi-ness elements into account.

“In the Heroes’ Corner pro-gramme we are looking at yo u n ggraduate craft entrepreneurs orthose with relevant experienceand put them in touch with buy-ers at the start of the contactsessions.”

Sedica and Chantal agree thatjust being able to craft is notgood enough.

“This programme is aboutfinding the secret to success forthe individual craft en-trepreneur — what makes theproduct authentic and unique,interweaving the personal storyinto the product and findingways of selling it successfully.”

Ensuring that crafters leavethe programmes with enoughskills to start a business is partand parcel of the Heroes’ Co r n e rprogramme, in which buyers areintroduced into the programme.

“Both programmes are aimedat creating an entrepreneurialenvironment for the crafters, inwh i c h they work towards def-inite goals. Every individual isalso matched to a mentor and,through that process, we not on-ly develop their skill as en-trepreneurs, but also build con-fidence and provide them withthe necessary information to be-come successful small businessenterprises.”

Nina Sedumedi, 31, a designerfrom Soweto, is among the suc-cess stories of the Heroes’ Co r -ner programme. Having justsigned a contract with a majorbuyer that will see her Africanfairies sold at retailers and air-ports across the country, shesays it was the programme thatmade all the difference.

“I studied fashion design at the

University of Johannesburg andwas convinced I would be a hugesuccess. After all, I was one of thefew who managed to finish thecourse. I found myself sewingcurtains and doing clothing al-terations just to pay the bills.”

Designing and making chil-dren’s clothes in her spare time,she was still dreaming of a bigbreak when a car crash cata-pulted her into action. Calling hercompany Innocent Spirits, shestarted making fairy outfits forgirls and animal suits for boys.

“When I joined the Heroes’Corner programme, my wo r l dchanged. I have learnt skills thatI desperately needed to make asuccess of my business. Morethan that, I found a mentor whogave me precious advice andmuch-needed criticism.”

She was also put in touch withbuyers leading to her signing thedeal to sell clothing and her spe-ciality, African fairies.

“Just being able to do some-thing is not enough — you haveto get out of your cocoon and goout and enrich yourself by doingthe programmes, learning theskills and developing your craft.

The best advice given to herwas to find her originality anduniqueness. “There is no pointgiving the world what it alreadyhas. My fairies were born duringmy mentorship programme, as Irealised I needed something thatwas different and unique.”

Tips for emergingentrepreneurs:ý Find out where youcan get support — thegovernment haspledged support to thecraft industry through avariety of programmessuch as the Product De-ve l op m e n t / E n h a n c e -ment programme —knock on as many doorsas you must but get in-volved with supportprogrammes;ý Gain experience —work for an establishedcrafter before tacklingthe industry as an in-dividual entrepreneurý Understand your areaof craft – know whereand who your market is,your expenses, yourpricing — develop ita c c o r d i n g ly ;ý Research your craft— authenticity is whatis going to define you;ý Be unique, be you.

How toget ahead

CRAFTING SUCCESS: Nina Sedumedi, owner of Innocent Spirits, with Sedica Davids of Create Africa Trading Picture: KATHERINE MUICK-MERE

9DECEMBER 6 2009: IT’S MY BUSINESS / Sunday Times

WHAT TO EXPECT NEXT YEAR: RETAIL

Tough 2010 loomingWorking smarter will be the key to survival, reports Hendri Pelser

VALUE for money is go-ing to be the name ofthe game in 2010 forsmall and medium en-

terprises in the retail environ-ment.

The days of credit-card s h op -ping sprees are over for m o stSouth Africans. Expectations arethat consumers will remain un-der pressure next year as thethreat of electricity price in-creases and possible new taxesloom. Half of all SMEs will beaffected as the SME Surveyshows that 34% of small busi-nesses focus on consumers and afurther 17% target either retail-ers or wholesalers.

The Bureau for Economic Re-search says retail confidence hitan eight-year low towards theend of 2009 as profitability cameunder pressure. While elementsof this picture will remain some-what static in the new year, im-provements are expected and itseems the worst may be over.

Evan Walker, a retail analystat RMB Asset Management, saysit is difficult to paint a clearpicture of 2010 because of the

Eskom and taxation unknowns.While minister of finance

Pravin Gordhan has hinted at apossible increase in income tax,Evan says the new NationalHealth Insurance Bill might in-clude a contribution from theworking population.

“This will affect consumersagain because it is effectivelyanother form of tax. If this hap-pens, retail will be hurt badly…and it will constrain long-termgrowth in the sector.”

Possible Eskom tariff increas-es will also affect consumers di-rectly: “There is a lot of un-certainty on the horizon and re-tailers should be conservativefor the next year at least. It isdifficult to see negative growthnext year. The average con-sumer can still hold out, butthere will not be any massiveg r ow t h . ”

This is echoed by Mike Schüs-sler of Economists.co.za — hesays the good news is that pos-sible cellphone tariff reductionsand a decrease in household debtmay lead to retail growth. Hisprovincial barometers also show

that trade growth is slowly start-ing to take place in somep r ov i n c e s .

Initially, at least, Mike expectsdiscretionary spending on smallitems to increase. He advisesSMEs to stock items that offerconsumers value for money. Itwill take a while before retailersselling big-ticket items will seeany significant growth.

ment is going to be critical nextyear and says inventory levelsneed to be watched carefully.“They should cut costs whereverthey can and they should avoidgetting too indebted … I thinkSMEs will continue to take moreand more pressure simply be-cause they don’t have the bar-gaining power.”

Mike advises SMEs selling big-ticket items to have smalleritems on display to promote anyform of cash flow.

Price increases will remainunder pressure and Mike be-lieves the only way to get the feetthrough the door is by offeringgood prices and by making surethat consumers are aware ofthis.

Food and beverage sales tendto remain fairly stable and Evansays food inflation has been de-creasing steadily. This means re-tailers will have a better time ofit initially as profitability is notunder as much pressure.

Abel Coelho of the GlenharvieSupermarket near Westonaria isan independent retailer and he isoptimistic about 2010. “The re-

cession did not really affect us aswe sell basic foodstuffs. Every-body needs food.”

On the other side of the spec-trum is Amith Kara from Orig-inal Penguin in Nelson MandelaSquare and his high-end clothingbrands are now subject to a 5%increase in import tariffs.

The effects of these increaseswill come to the fore when win-ter clothing hits the shelves, butAmith says the strong rand willlargely offset this.

“The rand is much stronger, soit is almost 30% cheaper to buyclothing. This gives us betterselling prices and, thus, bettertu r n ove r … at one stage, we werebuying at R11 to the dollar.”

Amith has ensured that hismargins allow room to manoeu-vre: “If things go south, we ad-just our pricing — we will simplydrop our margins and increasevolumes because you can see animmediate effect in the feet com-ing through the door. I think thatthe World Cup should give us abetter first part of the year.Thereafter, it is up to traders tooffer the right products.”

FOOD IS YOUR FRIEND: Retailers are advised to make sure they attract customers by selling at good prices, and making sure the customers know this

“If all these (unknown) thingscome to fruition, buying patternswill change and you will have toadapt your product range to be inline with the available disposableincome out there,” Evan says.

“Most SME retailers will needto look to offer more value prod-ucts — people will be spending.”

He adds that stock manage-

Expectations arethat consumerswill remainunder pressure

DECEMBER 6 2009: IT’S MY BUSINESS / Sunday Times10

Upturn predictedS e c to r ’s prospects are looking better in 2010, reports Hendri Pelser

‘We expectbuilding activityto start pickingup again’

WHAT TO EXPECT NEXT YEAR: MANUFACTURING

NOT long ago SouthAfrica had virtuallyreached its manufac-turing capacity.

The global downturn quicklytook the wind out of many SMEm a n u f a c tu r e r s ’ sails but, accord-ing to economist Mike Schüssler,2010 has the potential to nurturea recovery in the sector.

Still, it is going to be a longroad and SMEs will have to be ontheir toes.

“Manufacturing growth, to alarge extent, is going to dependon the world’s economic recov-ery. It won’t be heaven but itwo n ’t be the hell 2009 was,” s aysMike. “Overall, I am not too con-cerned about manufacturingnext year.”

Manufacturing is dependenton a number of other sectors andMike says SMEs that are focusedon producing consumer-relatedgoods can expect a pick-up involumes initially, with a down-turn in the second half.

He says inflationary forcesand the effects of a possible elec-tricity price increase will taketime to hit consumers, hence theexpected decrease in manufac-

turing activity towards the endof the year. Food and beverage-related manufacturing willremain stable.

The mining sector is alreadyseeing a recovery based on highcommodity prices. SMEs su p p ly -ing the industry should have agood year.

Overall, Mike expects manu-facturing to perform better, butsays significant growth will re-ally return only in 2011.

Export-orientated manufac-turers should do better if therand devalues, but Mike saysSMEs focusing on Africa stillhave many opportunities to pur-su e .

He adds that Gauteng, as SA’smanufacturing powerhouse, willsee the first effects of an upturnand decision-makers should lookat their industrial areas for signsof increasing activity.

Sanisha Packirisamy, an eco-nomic analyst at RMB AssetManagement, says because man-ufacturing was one of thehardest-hit sectors this year, itshould see signs of recoveryearly because it is coming off anextremely low base.

She adds that demand willincrease in general next year,based on expected overall eco-nomic growth, which will drivehigher production levels.

“If you believe the world willrecover next year, we shouldstart seeing export volumesrecovering. This year, exportvolumes declined by about 13%and we see this becoming a 4%year-on-year growth (in 2010).”

Sechaba Kitleli is chairman ofReunko Steel Suppliers inAlberton, which manufacturesballs and brackets for the miningindustry. Instead of sitting backand waiting for large mininghouses to find their productsamong a myriad of suppliers,R e u n ko ’s management wereproactive and recently conclud-

ed an equity deal with AngloAmerican’s development fund,Anglo Zimele.

“We convinced them of thevalue we offer because of ourproducts, technical ability andownership equity. I think we aregoing to take off in 2010,”Sechaba says.

Nevertheless, there will bep r e s su r e on input costs, includ-ing steel. “Our clients under-stand that there will always be aprice increase for our product.Constant communication letsthem know what is happening.

“I have faith that we are goingto ride the tide if we have theunderstanding of our clients.”

Neil de Wet of DoorsUnlimited in Pretoria is alsooptimistic about 2010.

The wooden door and windowm a n u f a c tu r e r experienced a 40%drop in volumes in 2009 as hous-ing construction came to avirtual standstill.

“Now that banks are relaxingtheir lending criteria and be-cause the interest rate is lower,we expect building activity tostart picking up again,” s aysNe i l .

“As a result, I expect vo l u m e sto increase. We also focus on therenovation market, which isrelatively stable for us.”

Neil expects the upturn tohave taken root by the secondquarter of 2010.

But he is worried about inputcosts, especially the electricitytheir three-phase machineryuses: “A price increase will hurta lot. It might just be cheaper torun a generator than to use elec-tricity from the main line.

“Obviously, we will have topass on any increased inputcosts to the customer. Theymight not like this, but they willnot have much of a choice be-cause all manufacturers usee l e c t r i c i ty . ”

Neil is in a significantly betterposition than many c o mp e t i t o r sbecause he imports the wood thebusiness uses.

This means his pricing re-mains more competitive andthere is room to absorb in-creased input costs.

“Some you win, some you lose.You need to manage the possiblenegative implications on yourbusiness as they arise.”

BOTTLE IT: Volumes of consumer-related goods are expected to surge in the first half of next year Picture: BUSINESS DAY

11DECEMBER 6 2009: IT’S MY BUSINESS / Sunday Times

Building industrystill under pressureFinding a niche in the market is the secret for SMEs, writes Hendri Pelser

‘The number oftenders beingput out hasd e c re a s e d ’

WHAT TO EXPECT NEXT YEAR: CONSTRUCTION

SME owners in theconstruction and hous-ing industry don’t have togo to a theme park as

they have their own roller-coast-er rides to contend with.

Unfortunately, the ride is notover yet and 2010 is going to beanother demanding year for thesector.

Property economist ErwinRode says SMEs should assumethat 2010 will be similar to thisyear. Next year will be a year ofc o n s o l i d at i o n .

“We must remember thatbuilding construction is a lag-ging indicator. So as rental rateshave been under pressure thisyear, one cannot expect muchimprovement in building con-struction next year,” he says,adding that the residential prop-erty sector will also remain un-der pressure.

There is oversupply in the res-idential and commercial mar-kets so new buildings are notreally “necessary”.

Economist Mike Schüsslerechoes some of Erwin’s senti-ments and believes commercialproperty will be the first sub-sector to perform better as man-ufacturing recovers.

Things do not look rosy in thecivil and infrastructure con-struction sectors, either, as thespending cycle initiated on theback of the Fifa World Cup isdrawing to an end.

“Government finances are un-der pressure,” Erwin explains.“When this happens they saveon capital projects. The potentialdemand for capital projects ishuge, but money is going to be ac o n st r a i n t . ”

Mike says many projects stillneed to come to fruition, amongthem expansion plans at E s ko mand Transnet.

“Civil construction, in general,should continue,” he says,adding: “One must rememberthat South Africa is so far behindthat there is simply no alter-n at ive . ”

There is some good news forsmall businesses not directlylinked to the construction sector.Erwin says businesses special-ising in home repair and DIYshould do better as fewer peoplewill move to better housing dueto financial constraints.

Mike adds that other housing-related service providers such asgarden services will still havework, but warns that consumerswill cut their spending.

At the same time, there is atremendous opportunity insupplying and installing energy-saving products such as solargeysers or geyser insulationblankets because of possibleelectricity price increases.

Erwin says rental prices willnot increase significantly nextye a r .

“Landlords cannot increaserentals if the retailers cannotafford it, and retailers cannot

afford higher rental if theirturnovers do not increase.

“It’s a tenant’s market and ithas been a long time since busi-nesses have been in such astrong bargaining position.”

But tenants must not overplaytheir hands and should askthemselves if the landlord reallywants them in the shoppingcentre.”

Large, showpiece projectssuch as stadiums or the Gautrainare either complete or approach-ing completion, but infrastruc-ture spending is not ove r .

Marcell Mellet, the managingdirector of Mellet Construction,says his business focuses onniche construction such astelecoms infrastructure and gov-ernment-orientated work suchas building schools and clinics,or upgrading existing buildings.

Because they operate in theFree State, Northern Cape andEastern Cape, where much stillneeds to be done, his business isticking along nicely.

“We really can’t complain —

we have a lot of work. The stateand parastatals are not worriedabout interest rates,” says Mar-cell. “But, we have found that thenumber of tenders being put outhas decreased, which makes us alittle nervous.

“It is difficult to say what will

happen next year. T r a d i t i o n a l ly ,it is quiet in the beginning of theyear and we use this time tocomplete our own developments,such as building office space.

“This way, we are able to keepour people busy and keep theirskills.

“We are a bit nervous aboutnext year, but we are also op-timistic — I’m just very happythat we do not focus on theprivate market.”

Chris Ringas of Pipeline Per-formance Technologies is alsooptimistic about 2010 as hiscompany focuses on analysing,protecting and repairingpipelines.

Chris explains that the infras-tructure that been created overthe past couple of years will needconstant monitoring and main-tenance, and this is an area

where many SMEs can pursueopportunities in the year tocome.

The challenge in securing thistype of work is convincing po-tential clients about the benefitsof outsourcing.

“The challenge is then to en-sure that you are geared up in-ternally and that you have thestaff complement with the rightskills and experience to deliver.”

He adds that in the pipelineindustry there are also signif-icant opportunities in the watersupply sector as much of theavailable infrastructure needs tobe replaced.

“As an SME it is not alwayseasy to bypass the bigger playersto secure such a contract. Butyou can market yourself as aspecialist to these players andbecome a supplier,” Chris says.

LOOKING UP: A construction worker makes his way in to a site in Rosebank, Johannesburg, where business is booming Picture: SIMPHIWE NKWALI

12DECEMBER 6 2009: IT’S MY BUSINESS / Sunday Times

A long way from homeVinny Lingham left SA tomake his business work,writes Alex Matthews

MAKING CONNECTIONS: Vinny Lingham has created a site to help others make websites — free of charge

VINNY Lingham p a c ke dhis bags for San Fran-cisco in 2007 afterfounding Yola, his

start-up that makes it easy forpeople to create and run theirown websites.

“As an Internet company weneed to have access to someunique skill sets, which are notalways found in South Africa,”says Vinny. “Also, we want to becloser to some of our partners —and most hi-tech companies arein Silicon Valley (in California).”

He studied information sys-tems at the University of CapeTown and did honours in e-com-merce through Unisa. Afterspending time at Dimension Da-ta, Commerce One and Slick-street Marketing, he launchedClicks2Customers in 2003, scoop-ing the Top ICT Young En-trepreneur in Africa award threeyears later.

“I think I’m a successful en-trepreneur because I get in-volved with businesses and in-dustries that I have experience,passion and insight into,” s aysVinny, who has been onlinesince the mid-’90s, when manypeople still thought the “we b ”was something a spider sp u n .

“The Internet is my passion,”he says.

Clicks2Customers, which doessearch engine marketing, says it

drives over $100-million in salesfor its clients. Vinny was CEO forjust over four years before thestart-up bug bit again. He re-signed in 2007 to concentrate onYola (then named Synthasite).

“We wanted to make buildinga website easy — now we evenhave an 88-year-old granny us-ing Yola!”

The user-friendly service en-ables you to design, create andhost your own website for noth-ing. It has over three millionusers already; people love it.

While anyone can use it, Vin-ny says it was developed withsmall businesses in mind. Theseare the guys who often cannotafford the costs involved in cre-ating and hosting a website, orhave the expertise.

“Yola is about helping en-trepreneurs to be successful onthe web, so in some way ourbrand reflects much of my per-sonal passions too,” says Vinny,who was recently home for Glob-al Entrepreneur Week.

“There are so many peoplewho are passionate about jobcreation in South Africa and pro-moting entrepreneurship that Ibelieve, as a country, we willsucceed at building a strong en-trepreneurship ecosystem,” hes ays .

Vinny says slow, expensivebandwidth has made starting

tech companies difficult in SouthAfrica. However, with the land-ing of the Seacom cable in Julyand with further cables on theirway, bandwidth will becomemuch more accessible.

Vinny hopes to return to CapeTow n . He believes that, if SouthAfrica is going to compete withtech titans like the US, a clusterapproach needs to be adopted.He mentions the recent launchof Silicon Cape, which will create

a community of investors andstart-ups in the Western Cape toattract the best tech talent.

As an entrepreneur, Vinny’sgreatest challenge has been toget the money for his start-updreams. He persisted, and thisyear Yola received $25-millionfrom the Reinet Fund, controlledby the Rupert family.

“Entrepreneurs need to beable to concisely explain theirbusiness and value proposition

to investors. Investors want toback people, not just ideas,” s aysVinny. “Ideas are nothing with-out execution of them, so you’remore likely to get funding ifyo u ’re already executing yo u ridea.”

Vinny says he believes thatwhile no particular skills areessential for entrepreneurs,what is important is “to havepassion for being able to controlyour own destiny”.