Moving a business from Support to Sustainability
Sibusiso “Busi” Raphekwane
Chief Empowerment Officer| Enterprise and Supplier Development | Leadership | Personal Mastery
Small Medium and Micro Businesses (SMME’s) have been identified as the catalysts and drivers of economic growth in this country. Over the years there has been research that proves that for our country to reach desired growth levels, SMME’s need to be up-skilled and developed to ensure that they sustainable. Research also proves that an estimated 80% of start-up businesses fail within the first two years of operation. This certainly does not allow for the sustainable economic growth that has been anticipated to yield from the growth of SMME’s.
The support of SMME’s has been recognized as a solution to ensuring that SMME’s actually last beyond the two year mark. There have been various programmes have been established to address this challenge. The Hope Factory is one of the organizations that was birthed to address this challenge through various Entrepreneur development programmes. One of the questions that is pertinent to Entrepreneur development programmes is: How do we move our entrepreneurs from support to sustainability?
Moving a business from support to sustainability is a process. The support stage is when a business needs the guidance and intervention of an entrepreneur support programme. The goal for these programmes are to ensure that businesses actually get to a stage where they do not need this support and can stand on their own. The process of ensuring that a business is sustainable, just like everything else that is intended to last requires a good foundation. For any business to thrive it needs a solid foundation to ensure that even if the business is shaken by challenges it can still succeed.
So what is sustainability and why is it important? . According to the Oxford Dictionary; Being sustainable is referred to as the ability to maintain a certain rate or level. It is also referred to as the ability to be upheld or defended. If an SMME is able to maintain a certain level or rate, this would mean that their businesses would be able to operate beyond the two year mark when the majority of businesses close down. This would not be the only factor, there are greater chances of a business leaving a lasting legacy when a solid foundation is laid.
In my view sustainability in the context of SMME’s refers to the ability to maintain a consistent standard in the running and management of their business for a lasting period of time desired by the entrepreneur. The ideal would be to get the greater majority of our South African SMME’s to get to a level of sustainability where their businesses can actually contribute to economic growth on a long term basis.
What does a sustainable business look like?
There are key characteristics of a sustainable business that are inherent in businesses that contribute positively to the economy on a long-term basis. The key characteristics are as follows:
? The entrepreneur needs to establish a clear vision and purpose for why it really exists
? A strong business model is necessary to ensure that all the key functions of the business tie in together
? The business has systems and processes in place that are established and operated on a consistent basis
? The business is continuously addressing a need and has a market for its products and/or services
? The business has an effective and efficient team to execute its key objectives
? Ability to create sustainable secure jobs
? The business needs to have a leader who has the capacity to grow and manage the business, therefore they need to be equipped to run the business successfully.
The process of moving a business from support to sustainability involves the above key characteristics of a sustainable business. In our mentoring model, we assist an entrepreneur to cast their vision and establish what the purpose of their organization is. This assists the entrepreneur to have clear direction of where they are going so that they can succeed. The first step to establishing a sustainable business is knowing exactly where you are going and what you want to achieve. The process also includes ensuring that the entrepreneur establishes systems and processes in the business; they build a resourceful team that will ensure that their goals are reached; the business understand the marketing strategy for their business clearly in order to continuously have a market for their products/or services; more importantly it is key to also grow and develop the entrepreneur because they are a key part of driving this growth in the business.
The truth is sustainable businesses have solid foundations; therefore creating a business that will leave a lasting legacy requires a clear understanding of the key foundations that will ensure that this is a reality. Creating these types of SMME’s is a process which requires time, commitment, passion, perseverance. Moving a business from support to sustainability is about ensuring that the business has a solid foundation to enable it to stand on its own and operate without the assistance of entrepreneur development programmes.
Committed to elevating African livelihoods through Responsible Entrepreneurship
9 年Good conversation, and timely too in the context of South Africa; 21 years post democracy.For just under a decade we have seen a proliferation of enterprise development (ED) organisations; known interchangeably as small business incubators or propellers all aimed at improving the survival rate among small business operations; but with different approaches to this end and varying success levels. As anyone involved in the work of such organisations will testify, participation on an ESD programs is not a silver bullet guarantee of success. As alluded to in the article, small business survival is indeed a multi-dimensional challenge. The ultimate aim must be sustainable participation and contribution by the SMMEs being developed to economic growth, job creation and poverty alleviation. Incubation by definition refers to developmental support introduced at the most vulnerable stages to equip, facilitate and promote growth. It requires a careful mixture of tender guidance, nurturing etc.; and stepping aside, gradually reducing support levels so as to allow exposure to external pressures and adverse conditions by the subject. This mixture produces non co-dependent growth that is vital not only for surviving but thriving post the incubation period. In the case of small business incubation, the challenge is further complicated by the fact that business growth must be supported by the entrepreneur's personal development. This secondary aspect is often either neglected by ED organisations or simply abdicated by entrepreneurs leading to non-achievement of desired goals and impact. Simply put, 21st century business survival, let alone sustainability for SMMEs requires total commitment from competent, connected, agile, innovative and socially and economically savvy business owners. However its not enough to have great entrepreneurs. They must be supported by an enabling environment involving several key stakeholders. These include adaptive, competent, aware and socially-relevant ESD programs that can offer guidance and structured interventions at the appropriate time; a private sector that recognises SMME development as good business sense and is willing to support the spirit, and not just the letter of ESD and government leadership in continually creating a conducive and pro-SMME growth macro environment through legislation, policy and practical interventions, particularly in high growth sectors.
Chief Empowerment Officer| Enterprise and Supplier Development | Leadership | Personal Mastery
9 年Economic trends are key principles that every business needs to understand. A key skill that needs to be obtained by the entrepreneur is the ability to forecast and assess potential threats in the business whether they are due to economic climate changes or market downturns. The development process involves the building of entrepreneurial skills, specifically leadership skills that enhance the entrepreneurs' ability to be adaptable and respond effectively to market trends.
Global Business I Capital Raising I Inter-Africa Trade Consulting
9 年I repectfully disaggree with the characteristics and put forward that business perfromance , administration and globalization, form the back born of sustainability. As an entrepreneur for 12 years I have tried having all the characteristics you listed through guidance from SEDA, SIDA and WBS. My business was not prepared for the challenges i have experienced. economic recessions, slow growth figures, etc Banks and development programmes dont grasp the fundemental needs of the audience due to their inexperience of SMME environmental and social barriers that play a huge roll. Your comments are welcome. Shaun