Entrepreneurs need financial know-how to enter broader market
One of the biggest stumbling blocks that entrepreneurs come across when starting their business, is the lack of financial experience and financial intelligence, which is why greater education in this sector is needed, Gunguluza Enterprises & Media founder Lebo Gunguluza told delegates attending the Global Entrepreneurship Week on Friday.
Small Enterprise Finance Agency CEO Thakhani Makhuvha agreed, noting that the agency was often approached by entrepreneurs seeking funding for projects that were “not watertight”.
Many entrepreneurs also lacked the knowledge of how to correctly “package” and promote their business plans, he highlighted, adding that this financial skillset needed to be taught at an early age.
Both Gunguluza and Makhuvha agreed that, often, entrepreneurs lacked financial discipline and could not manage their cash flow. They added that new entrepreneurs tended to spend the money they received through development agencies and other sources of funding on “a new car”, instead of using it to source materials for their business and repay loans.
To overcome such challenges, Small Enterprise Development Agency CEO Mandisa Tshikwatamba suggested that entrepreneurs engage with vocational training institutions, as well as using the corporate environment to gain experience.
City of Johannesburg economic development executive director Ravi Naidoo added that the city was working towards making the support of small businesses a basic service, as it was “very difficult” to get a business registered, to be tax compliant and to apply for black economic empowerment status.
“All of this is very frightening,” he noted, adding that every region in the city aimed to have special incubator and hub programmes, where entrepreneurs can gain financial knowledge for free.
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