Showing posts from November, 2015

The impact of interest rate hike on businesses

Sanjeev Orie, CEO of Business Value Adds 

Given the tough economic conditions that SMEs are already facing, the increase in interest rates will add more pressure by making debt more expensive. Profit margins are also likely to be impacted in the long term due to a lower demand from consumers that will tighten their belts as disposable income decreases. 

For most of the middle class consumers, a rate hike typically means an increase in mortgage and vehicle repayments. This means that businesses that are highly geared and operating on low margins may struggle to service their debt commitments. 

As a result, small businesses may run into cash flow problems, making it difficult for them to manage running costs and payments to staff and suppliers for goods and services. Moreover, the possibility of further interest rate hikes next year will require SMEs to place more emphasis on their annual cash flow forecasts and regularly review them as business conditions change. 

Difficult trading conditi…

Entrepreneurial lessons from 2015

As 2015 draws to an end and everyone starts to wind down, now is the ideal time for entrepreneurs to take a step back and reflect on how their business has fared this year, and the lessons they have learnt as a result. Analysing these can help entrepreneurs apply key insights into their business, and avoid certain mistakes and challenges.

This is according to Christo Botes of the Sanlam / Business Partners Entrepreneur of the Year® awards, who says that entrepreneurship unfortunately does not have a  ‘how to’ guide or roadmap, and entrepreneurs are therefore left to find their own ways in business, often facing  a maze of challenging circumstances. 

“2015 was a tough year in terms of the economic conditions, but despite the ups and downs, the hard work and dedication paid off for many entrepreneurs and businesses. Perseverance - a trait of any successful entrepreneur – assisted many entrepreneurs with the various challenges witnessed in 2015. This inherent determination allowed them to …

Can franchisees really cope with rising interest rates and other pressures?

The recent decision by the South African Reserve Bank to increase the interest rate to 6% has impacted on all sectors of the economy from consumers, big conglomerates to franchisees. As with all business enterprises, the economic conditions of the day impact directly and indirectly on the operations of franchises – their production, management, pricing – and so must be analysed carefully and managed strategically. 

Ethel Nyembe, Head of Small Enterprise at Standard Bank says, “The recent interest rate hike combined with myriad other economic challenges certainly puts franchisees under pressure, and so, with the rate only expected to rise, they must plan carefully to mitigate the foreseen side-effects for future success.”

“Fortunately, there are a number of strategies that can help franchise owners weather this economic storm.”

Limit your spending: It is common to underestimate the costs involved in buying, opening and maintaining another franchise, but in a weak economy this can be fatal…

Improve your service station efficiencies

FNB to host inaugural Fuel Forecourt Forum

FNB will host the inaugural Forecourt Forum, a first in South Africa where fuel stakeholders and industry leaders will meet to discuss and debate the fuel landscape. The event will take place in Umhlanga today. 

Ronél Fester, FNB Franchise Fuel Specialist says, “ There are approximately 4 600 forecourts or service stations in South Africa and the fuel industry has remained solid despite recent challenging economic conditions. The Forecourt Forum provides an opportunity for stakeholders to discuss how best to improve their service station efficiencies. At the end of the day, we’re here to assist retailers achieve their financial objectives of return on investment and return on assets.”

The inaugural Forecourt Forum is hosted in partnership with Traderite, a ‘Best Practices’ service provider to the South African Fuel Industry. 

Ray Maingard, Director of Traderite says, “The fuel industry remains  one of the major contributors to the South African G…

Aspiring young SA entrepreneurs celebrated

In the wake of Global Entrepreneurship Week, budding entrepreneur, Lebohang Selloane, has been named the winner of the 2015 Business Partners / SME Toolkit Global Entrepreneurship Week’s Business Plan Competition for Aspiring Young Entrepreneurs at an awards ceremony held in Johannesburg.

Now in its 6th year, the competition seeks to equip passionate and enthusiastic youth with the knowledge to turn their business idea into a reality. Aspiring entrepreneurs – between 18 and 35 – were encouraged to submit their business idea and attend one of nine regional workshops across the country to learn the complexities of compiling a business plan and managing the many functions of running a business. Following this, each young entrepreneur was invited to submit a formal business plan to a judging panel.

Selloane, based in the Free State, is a Diagnostic Radiography graduate who is currently pursuing her MBA. The 28 year-old’s winning idea is based on an onsite mobile X-ray services business call…

E-Signatures gain traction in South Africa

Successful companies have a long history of leveraging technology to replace slow, complicated, manual processes to drive efficiency, reduce costs, and improve customer satisfaction. Liz De Freitas, Account Manager at AdvanceNet says, in spite of this drive, many unfortunately still use antiquated ways to collect and use information during transactions, particularly when signatures are required.

De Freitas says under South African law, a written signature is not necessarily required for a valid contract. Contracts are generally valid if legally competent parties reach an agreement, whether they agree verbally, electronically or on paper. “While companies have automated processes leading up to and following the actual signature, many still needlessly rely on pen and paper to transact business. This slows business, delays results, and creates a negative customer experience,” she says. 

“To meet the demands of today’s more educated consumers and businesses, organisations need to create gre…

Implication of "'water shedding' on business operations and insurance

Drought conditions have many devastating effects on communities and the surrounding environment. While the devastating effects of drought are first realised within the agricultural sector, the ripple effect into other sectors and consumers’ personal lives is quickly felt. 

This is according to George Davis, Head: Construction and Engineering at Risk Benefit Solutions (RBS), one of South Africa’s largest independent insurance and risk specialists, who says that this has already become evident with the implementation of water restrictions in Gauteng last week. 

“Businesses – across all sectors – need to start realising the potential devastation and associated costs that can arise from the current drought conditions, and should be implementing risk management strategies accordingly.” 

South African Water Minister, Nomvula Mokonyane1, was recently quoted stating that South Africa is currently experiencing its worst recorded drought since 1992, and as a result two of the nine provinces - Mpum…

Franchise Expo in Buffalo City (East London) 13 – 14 November 2014

Business owners who would like to franchise their business individuals interested in venturing into the franchise business arena a platform for franchisors and franchisees.

The Buffalo City Municipality (East London and surrounding areas) is hosting a Franchise Expo on the 13 and 14th November to not only promote franchising in this area but based on the theme of ‘what it takes for an entrepreneur to own a franchise business.” Acknowledging that the franchise business model is an important tool in promoting SME development and increasing private sector development, the Buffalo City Metropolitan Municipality is hosting this event in order to maximise on the potential of the area. The Expo is aimed at:

business owners who would like to franchise their businessindividuals interested in venturing into the franchise business arenaa platform for franchisors and franchisees.Please visit the SA Franchise Warehouse Stand!

2015 FNB Franchise Leadership Summit

Planning for the Future

Aptly themed, ‘Planning for the Future’, FNB hosted the fourth consecutive FNB Franchise Leadership Summit where South Africa’s franchising leaders and stakeholders met to discuss and debate the Franchising landscape.

Morné Cronjé, Head of FNB Franchising says, “In South Africa, the franchise industry has remained solid despite challenging economic conditions and the country remains attractive to local and international franchise brands. The industry’s contribution to GDP is estimated at almost 12.5% with more than 600 franchised systems operating and over 31 000 franchised businesses and employing just over 320 000 people countrywide. However the shift in the franchising landscape is changing and businesses need to start looking and planning for the future.”

FNB’s chief economist, Sizwe Nxedlana adds, “South Africa’s economic growth has been exceptionally weak in recent years. GDP growth has averaged at 3.1% since 1994, but we have been nowhere near that since 20…

SMEs should use festive season profits wisely

Given the current tough economic conditions locally and the highly uncertain business environment, SMEs should fully capitalise on the opportunities presented by the busy festive period by saving and investing profits wisely.
Similarly, business owners that are less busy should avoid shutting down and going on holiday early, but rather use the quiet period to review their business plans and adequately prepare for the months ahead. 
Elize Giese, Head of Business Investments at FNB says “profits earned during the festive season can go a long way to help SMEs prepare for the tough times and even quieter periods in the beginning of the year. One of the challenges we are seeing in the SME sector is that many business owners are failing to maximise profits earned during the festive season by overlooking the vast savings options available to them.”
She says selecting the right investment and savings options largely depends on the nature of the business as well as its cash flow. For example, a…

Understanding your market is key to entrepreneurial success

Regardless of the industry, successful entrepreneurs understand that the marketplace changes all the time and it’s necessary to be willing and able to adapt to changing customer needs. For some businesses it can be as complicated as changing the product offering or developing a new service, and for others it can be as simple as highlighting different benefits that already exist.

For Lerato Sibanyoni, owner of the Greenstone Cash Converters franchise, it was about spending time every day with customers to better understand their needs and then responding to these needs accordingly. Sibanyoni explains that after owning a Woodmead Cash Converters for five years, she relocated her branch to Greenstone, where her customer profile had changed considerably.

“After spending so much time building up our clientele and nurturing relationships, the Woodmead lease wasn’t renewed - but thankfully the Cash Converters Franchise Support Centre helped me locate a new site in Greenstone. Although the site…

H2O leads the way as SA’s no1 purification company

In South Africa H2O International SA has the longest proven track record of any purification company and for the past 21 years they’ve been providing South Africans with the very best water and air purification systems. Tried and tested by families, businesses, the hospitality and agricultural industry alike, all agree – when it comes to clean pure water and air, H2O International SA is the company to turn to. 

New look, new targets
As part of their continued growth and evolution, H2O international SA has appointed Touch Marketing as their official agency to handle all social media, PR and on-going marketing strategy, communication and advertising.

In accordance with their new positioning and marketing campaign they’ve also implemented a new positioning line “It’s what’s inside that counts” to support H2O International SA’s commitment to making each and every South African aware of the importance of purified water and air in their daily lives. 

Quality franchisees support a quality brand

News Cafe celebrates 20th anniversary with fans in its #newscafeturns20 summer programme

News Cafe, South Africa’s most loved cocktail bar and entertainment venue, is celebrating twenty years of good vibes and great service with festivities, promotions and events nationally, starting this October. Voted Best Cocktail Bar 16 years in a row by the South African public in a survey done by Best of Joburg, Pretoria, and Ekurhuleni, News Cafe is pulling out all the stops. They have been working in conjunction with their supportive and excited franchisees and, in a well-conceived match of brand and personality, with DJ Mo Flava from Metro FM who will be promoting the campaign and hosting events. Together, they form the perfect recipe for a spectacular summer celebration campaign. 

The campaign will consist of in-store, social media and radio advertising, as well as a series of fun-filled events taking place at locations around the country. Fans will be able to keep up with everything as it happens by liking the News Cafe’s Vibez Facebook page and following its @NewsCafeVibez Twit…

Arching to Melrose

Engel & Völkers Southern Africa has kept it no secret that the company has experienced exceptional growth this year and now it seems like the elite Real Estate Agency will not leave any stone unturned or unbranded as a matter of fact – as they have just signed another licence for the Melrose area in Johannesburg. 

Craig Hutchison, CEO of Engel & Völkers Southern Africa says that it no surprise that Scott Pharoah, Licence Partner of Engel & Völkers Hyde Park, spotted the opportunity to add Melrose to his portfolio, after signing the licence for Hyde Park, earlier this year.  

The Melrose Licence includes the suburbs of Birdhaven, Birnam, Melrose, Melrose Arch, Melrose Estate and Melrose North, and the territory comprises a great percentage of lifestyle estates and freehold properties.

Hutchison stated that Melrose is a wealthy and developing suburb in Johannesburg, with the well-known Melrose Arch Shopping Centre that hosts prestigious events such as the Mercedes Benz Fashion …

The Evolution of the Franchising Customer

The Hybrid Consumer

The rise of the ‘hybrid consumer’ is an emerging and growing trend with significant implications for the South African franchising industry. It is pivotal that these new customers are understood so as to leverage a profitable relationship with them. At this year’s FNB Franchising Leadership Summit, Dion Chang, trend commentator and founder of Flux Trends, will be discussing the rise of the hybrid consumer. Chang defines a ‘hybrid consumer’ as someone who shops both online and offline.

Morné Cronjé, Head of FNB Franchising says, “To service a hybrid customer is like having two companies at the same time because you've got to run a virtual and a physical store, which in the end could be costly for the franchisee and franchisor. Retailers could be reluctant to service hybrid consumers who shop both online and offline, but if we fully understand these customers, it could be a profitable experience.”

“A year or two ago, people were just considering an online or offline…