Ben Bierman Minister of Finance Pravin Gordhan delivered a balanced and conservative budget which strives to continue the necessary fiscal consolidation, attempts to address inequality, and will likely ensure that South Africa has a realistic chance of avoiding a ratings downgrade. From a small and medium enterprises (SME) perspective, this should create an economic environment that is more conducive to growth and opportunity. This is according to Ben Bierman, Managing Director of Business Partners Limited (BUSINESS/PARTNERS) , a specialist risk finance company for formal SMEs, who says that given the current narrative regarding inequality that continues to plague economies around the world, particularly South Africa, the Finance Minister made a progressive move in targeting high-income earners to get the additional revenue required. However we foresee that this is the first of several initiatives in the move to address inequality and we might see more taxes introduced for the we

While franchising’s prevalence in the South African economy underlines that it is a successful formula, many franchisees continue to fail each year. Often, it’s the small stuff that separates winners from losers: reluctance to follow the formula, poor management and poor people skills. There’s a bit of the rebel in each of us, but the reason most people choose to become a franchisee is to follow a successful model. Those that don’t follow it, really only have themselves to blame. However, to be a top performing franchise takes a little more than following the beaten path, says Sandwich Baron founder and CEO Sally J’Arlette-Joy. Over the 20 years of Sandwich Baron’s existence she has noted the characteristics that separate her best franchisees from those who simply make a living, or even fail. “It often comes down to taking something which has been tried before and doing it better, or with a bit of a twist. The characteristics of successful franchisees are those who provide the b

We unpack the reasons why even good businesses are struggling to be sold. By Kobus Oosthuizen Through the years SA Franchise Warehouse has advertised a fair number of genuinely well-priced existing businesses and while there is no shortage of interest from credit-worthy prospective buyers, very few sale/purchase transactions where the purchaser had to procure funding, as is most often the case, ever materialised. Why is it that a profitable business operating under the banner of a great brand is difficult to fund, even if the purchaser meets all the requirements as far as own contribution, credit record and skill sets are concerned? More often than not the reason for declining the application relates to the valuation and/or financial compliance or the integrity of information relating to the business being sold. An existing business sold as a going concern should be valued using either the future discounted cash flow or earnings method. Rather than relying on what the current owner

While the franchise agreement is an essential component of the franchisor/franchisee partnership, legal agreements do not guarantee mutually productive relationships. Co-operation, motivation and teamwork are the real building blocks of success in a franchise chain. Contributed by Franchize Directions To say that franchising is just a legal or commercial relationship between two parties is to provide only part of the story. To complete the picture we need to consider the quality of communication between the parties and said quality is largely dependent on the quality of relationships between the parties. Given the long term nature of the franchise relationship and the interdependence of the parties, the franchisor/franchisee relationship is often likened to a marriage and, as in every marriage, relationships can sometimes become strained. Where a franchise network has developed a system of good internal communications, pressures on one party, rather than becoming a cause for co

Disruptive innovation and smart contracts — what is the future of legal agreements? By Monisha Prem Disruptive innovation displaces old systems, products and technology. It is the radical changes in industry that often result from technical advancements such as automation — in other words, turning tradition on its head. Uber and Airbnb are prime examples of companies who have disrupted their respective traditional industries by providing modern, easy and cost-effective solutions. Even with no assets to speak of, these companies are worth billions of US dollars. A critical component of disruption is the social ease of accessing traditionally inaccessible products and experiences. The financial sector, for example, is experiencing disruptive innovation in the form of FinTech or crowdfunding (online lending or investing without traditional financial systems) and Bitcoin (cryptocurrencies). How does disruptive innovation impact the legal industry? According to the techies, t

BACKGROUND Since Brian Cumins founded Cash Converters in Perth, Western Australia in 1984, the Cash Converters chain has grown exponentially into a multi-million dollar international business with more than 750 stores in 20 countries, and is still growing. Cash Converters has pioneered the transformation of the buying and selling of pre-owned goods, and offers an exceptional franchise opportunity that provides franchisees with an internationally proven, recession-resilient business model for achieving real wealth. Cash Converters stores offer multiple revenue streams making this a sustainable franchise that offers the cash you need to live the life you want. THE CONCEPT Whatever happens in the world, people will always need access to cash — whether they’re selling their belongings, borrowing money or just looking for a great bargain. The internationally aligned rebrand and new store design of Cash Converters southern Africa ensures that this household brand is top-of-mind wh

In 2016, South Africa experienced deteriorating GDP growth caused by various factors including the Rand’s depreciation of R15.51 against the Dollar, severe drought, water shortages, and the rising unemployment rate. GDP growth is however expected to improve moderately in 2017. Businesses, particularly start-ups and SMEs, can expect better growth and opportunity than in 2016. “Now more than ever small businesses need to safeguard themselves against the perils that could be harmful to their growing business,” says Derek Wilson, Head of online insurance and financial services comparison website, Hippo.co.za . Business Insurance is more than just protecting your business assets. Not having insurance could result in a negative impact to your bottom line, damage to your business’s reputation or even the loss of your business. Here’s what you need to know about Business Insurance: Insure your nett worth If you have business property such as commercial offices, a house or any vehicles used

Ever stopped to think about just how valuable the people in your workforce are? Ian Fuhr, CEO of Sorbet , is an example of someone who invests in employees and reaps the rewards. He is a firm believer that you can’t motivate employees, but that you should create a work environment conducive to people motivating themselves. By Pieter Scholtz According to research by Gallup, an American research-based, global performance management consulting company, employees who are given the opportunity to use their strengths on a daily basis are six times more likely to be engaged on the job. While the onus primarily falls on the individual to constantly improve their skills, the business also has a responsibility to find ways to leverage existing talents and ensure that these are woven into the business itself. Making an investment in existing staff is also an excellent way to attract new talent. When word gets out that you and your business take the time and resources to build and enrich your w

Kobus Engelbrecht While the unemployment rate for the fourth quarter of 2016 as released by Statistics South Africa on Tuesday decreased from 27.1% (Quarter 3 of 2016) to 26.5%, urgent action and support structures are still required in order for local entrepreneurs to do what they do best – create jobs. This is according to Kobus Engelbrecht, spokesperson for the 2017 Entrepreneur of the Year competition sponsored by Sanlam and BUSINESS/PARTNERS , who says that one of the surest ways to further bolster employment figures in South Africa is to place more emphasis on the promotion and development of entrepreneurship. Engelbrecht points to the latest Global Entrepreneurship Monitor 2016-2017 which states that small and medium enterprises (SMEs) in South Africa contribute 36% to GDP. “However, we could improve this figure if we make business conditions more conducive to growth.” Engelbrecht references the 2017 World Bank’s Ease of Doing Business report ranked South Africa 74 out of

Christo Botes When it comes to starting a business venture, many people think that an out-of-the-box, unique idea is needed in order to develop and build a company. However, this notion is progressively changing as more and more budding entrepreneurial-minded individuals are looking to seasoned entrepreneurs for their starting block in the form of an offer-to-purchase. Christo Botes, executive director at Business Partners Limited (BUSINESS/PARTNERS), says that developing a start-up business or buying a franchise isn’t the only path to becoming a successful business owner, and that the route of purchasing an already existing business is growing in popularity. Botes says that the country’s high startup failure rate is contributing to the shift from start-up ventures to acquisitions. According to the 2016-2017 Global Entrepreneurship Monitor report, South Africa’s established business rate – the percentage of the adult population that are owners or managers of businesses that have be

The real estate agent's offer in the buying and selling of a home is invaluable in today's property market with all the new laws and regulations. “In today's hands-on society, it's the responsibility of homeowners to fully understand all aspects of the buying and selling process – even the undisputed factor of commissions” notes Craig Hutchison, CEO of Engel & Völkers Southern Africa . The information below should serve to add a fuller picture to this part of the property process. Why are there estate agent commissions? Estate agents in most countries don't work for a salary, their earnings are commission based per sale they produce and often constitute their livelihood. When is an agent eligible to ask for commission? Both the agent and the agency they work for, must have valid Fidelity Fund Certificates in order to be eligible for commission. This means that the agent is qualified to operate in the real estate industry and has the necessary security as a saf

Morne Cronje Much has been said about the slothful state of the economy and have echoed sentiments that 2017 is not going to be a walk in the park. The franchising sector has however found its way through the slow economy with industries such as the fast food segment showing positive growth in 2016. That said, franchising in South Africa is still not fully realising its true growth potential and franchises need to continue to plan ahead, innovate and adapt to changing market conditions to ensure that they stay abreast of the changing business environment. “The splendour of franchising is that you’re in business for yourself but not by yourself, however, one has to let go of the myth that franchising brings instant success. It is a safer type of business because it is part of an established brand: the risk nevertheless is not necessarily lower,” says Morne Cronje, Head of Franchising at FNB Business . He shares some of his views on what to monitor in the franchising sector: