Ben Bierman SME indicators of distress, in particular the number of liquidations, are increasing. “We have noticed a sharp increase in credit risk amongst our clients,” says Bierman. He points to the Business Partners Limited 2016/2017 financial results which reported that net credit losses had almost doubled during the financial year, highlighting the level of distress amongst SMEs. Bierman stresses that SMEs are critical engines for growth and job creation, and, as conditions are expected to get worse before they get better, SMEs need to prepare for the challenges ahead. “If business owners are to steer their companies through this almost perfect economic storm, and possibly emerge stronger, they need to set a clear course and actively stick to the plan. “Now, more than ever, business owners need to anticipate the future by forecasting and quantifying the cash flow implications for multiple scenarios. Should the country face further economic strain, business owners should a...

Morne Cronje South Africa has over 35 000 franchise outlets that employ more than 300 000 people. Consequently, franchising holds the key for job creation, because the failure rate of franchise businesses is far less than a regular start-up. Morne Cronje, Head of Franchising at FNB Business says, “In spite of the economic slowdown that is having a knock-on effect on small businesses, the franchise sector continues to grow gradually and Franchise brands are doing better because of their strong business models and supporting structures.” Cronje shares four key insights on why we need more franchisors and franchisees: Employment: Franchising is a healthy vehicle to drive sustainable jobs, this sector is often overlooked and we need to start investing in it by raising more awareness so that more people can be familiar on how to get into this sector. Contributes to economic growth: Job creation can only be accelerated through sustained economic growth, and the stable nature o...

Kobus Oosthuizen While we have on previous occasions highlighted various aspects of the programme, in this article we elaborate on how the various phases dovetail with one another in contributing to the greater objective of enterprise development, transformation and job creation. By Kobus Oosthuizen The basic principles of traditional franchising are relatively well understood, however the development of emerging franchisors and their business models within emerging markets presents unique challenges, inherent to the environment and era we find ourselves in. THE CHALLENGES How do you determine whether a business operating in the emerging market, without the benefit of proper management accounting systems, has the potential to be replicated and franchised on a commercially viable basis? How would emerging franchisors, who invariably do not have access to the necessary resources, fund the high cost of developing and packaging a franchised business in a statutorily compliant...

Reacting to two announcements this week - on the proposed national minimum wage of R20 per hour or around R3 500 per month and unemployment rising 27.1 percent, the highest in 13 years – the franchise sector, which contributes 11.6 percent to the country’s GDP and employs over 400 000 people through its 757 franchise systems and their 35 111 franchise outlets, is keen to find  solutions that will maintain a balance between paying a liveable wage and creating the necessary jobs to grow the economy. This is according to Vera Valasis, FASA ’s Executive Director.  “The franchise sector is unique in that it is represented in seventeen different business sectors – many of whom have their own sector bargaining councils setting their own minimum salary scales. “Whilst we wholeheartedly support the move towards paying a liveable wage, and many of our franchise owners already pay their staff above the minimum prescribed wage, those in the more rural areas where lower sales are realise...

Partnership contributed meaningfully to job creation and poverty eradication In living up to its name of partnering for a brighter tomorrow, Masisizane paid tribute to the Small, Micro and Medium Enterpri (SMMEs) that it supports in the Gauteng region. All have contributed meaningfully to job creation, economic growth, attracting investments, eradicating poverty and reducing inequality. At the Fund’s provincial awards event held on the Thursday, 27 October 2016, Masisizane celebrated some of the outstanding achievements of the SMMEs that it ‘partners for a brighter tomorrow’ in Gauteng. Zizipho Nyanga, CEO of the Masisizane Fund, said: “As we approach the 10th anniversary of the Masisizane Fund in 2017, we would like to capture the road the Fund has travelled and demonstrate the legacy it is creating as it continues to grow. We are also looking forward to a meaningful celebration in July 2017, following a decade of job creation, boosting economic growth and achieving other significan...

Gugu Mjadu We are approaching 100 days since the local government elections and as newly elected mayors of South Africa’s municipalities begin to tackle the many governmental challenges that face them, there is significant opportunity to boost job creation among small and medium enterprises (SMEs), especially those that provide vital products and services to municipalities and local authorities. This is according to Gugu Mjadu, executive general manager: marketing at Business Partners (BUSINESS/PARTNERS) , who says that entrepreneurs are critical to the development and well-being of any community, and stronger partnerships should be forged between local government and business communities if South Africa is to improve economic growth, create employment and effect real change in the various municipalities. “For many newly elected mayors their political parties listed improving employment opportunities at local government level on their campaign agendas. As one in four South Afri...

Heather Lowe Bolstering efforts to support high potential businesses to grow revenues and reach the next level of growth should be one of the solutions considered to help the country reach its National Development Plan (NDP) goals to create an estimated 11 million jobs by 2030. Scale ups are high potential businesses that have been resilient enough to outgrow challenges that many small businesses face in the start-up stages. These businesses stimulate high levels of entrepreneurial activity and can drive the creation of sustainable jobs. Heather Lowe, Head of Enterprise Development at FNB says the contribution of start-ups to economic growth and job creation is invaluable, but these businesses should not be neglected as they grow. High potential businesses still need support and mentorship in order to fulfill their legacies, contribute to sustainable economic growth and help the country to be more competitive. Lowe says there is a growing misconception that scale-ups are already...

How to Seal that BEE Deal In South Africa, as in the rest of the world, business shareholders focus on annual returns and dividends. For companies in South Africa, being B-BBEE-compliant makes a significant difference when it comes to growth and success. When implemented well, BEE can support job creation, global competitiveness and economic growth. It can also reduce the burden on entrepreneurs and assist in creating a more skilled workforce.   The Broad-Based BEE Codes of Good Practice are legally binding on all State and State-owned entities, so when it comes to choosing suppliers, granting licences or making concessions, all government (and an increasing number of public) businesses require their suppliers to be B-BBEE compliant. Israel Noko, CEO of NPI Governance Consulting says, “Being B-BBEE compliant has knock-on effects. For example, businesses with high B-BBEE ratings may be preferred suppliers because their score helps to improve the score of the companies makin...

Arrival of Domino’s Pizza in SA creates real jobs Since its successful launch into the South African market in April last year, followed by the opening of six stores from October 2014, Domino’s Pizza has already made a noteworthy contribution to job creation around the country.  The six restaurants effectively employ over 180 people, and more than 300 jobs will be created with the opening of an additional 12 restaurants by the end of March 2015. The company estimates that it will open or convert 125 stores in 2015, adding further socio-economic development initiatives. Domino’s Pizza employs a range of employees, including those who function as trainers, general managers, assistant managers, behind-the-counter crew and drivers, as well as head office staff. Ongoing skills development is taking place with 22 employees already having completed in-depth training of between two and five weeks in Miami, Florida, USA, with the Domino's Pizza International team. Further, Domino...

Arrival of Domino’s Pizza in SA creates real jobs Carlo Gonzaga Since its successful launch into the South African market in April last year, followed by the opening of six stores from October 2014, Domino’s Pizza has already made a noteworthy contribution to job creation around the country.  The six restaurants effectively employ over 180 people, and more than 300 jobs will be created with the opening of an additional 12 restaurants by the end of March 2015. The company estimates that it will open or convert 125 stores in 2015, adding further socio-economic development initiatives. Domino’s Pizza employs a range of employees, including those who function as trainers, general managers, assistant managers, behind-the-counter crew and drivers, as well as head office staff. Ongoing skills development is taking place with 22 employees already having completed in-depth training of between two and five weeks in Miami, Florida, USA, with the Domino's Pizza International team. ...

Real People Group’s SME finance offering anticipated to promote job creation Commenting on the recent announcement that The Real People Group has expanded its purpose specific lending offering to include business finance to local SMEs (Small and Medium Enterprise), Neil Grobbelaar, Group Chief Executive Officer of the Real People Group says market research indicates that the local SME market is ripe for alternative funding facilities. “The reality is that many entrepreneurs are unable to secure finance due to insufficient collateral. Research1 indicates that some of the major challenges facing local SMEs include not only access to finance, but a challenging regulatory environment and lack of entrepreneurial training. Our new SME finance offering plans to address both the financial and training aspects of these challenges,” he comments. The Real People Group acquired WIZZIT Bank’s Loan book together with its entrepreneurship training facility in January 2014. The acquisition means it...

      There are thousands of successful small independent businesses trading in the formal and informal retail sectors who, because the businesses themselves are viable, are able to provide job opportunities in a sustainable manner. By Kobus Oosthuizen Small businesses and particularly those delivering essential goods and services in an emerging market environment are not hugely affected by high interest rates, fuel prices or a recessionary climate and as such their employment base is largely sustainable and stable. What makes a business sustainable? While there is no quick answer to this question, the following key success factors all contribute to the sustained success of an enterprise: The nature of and a sustainable demand for its goods and/or services Its number of years in existence A suitable location Access to operating capital   The abilities of the operator and his presence within the business The ability of the operator to a...