Sep 07, 2012
Regulatory environment killing small businessesBack
Africa|Branson Centre|Business Growth|Education|Environment|Flow|Google|Training|Africa|Mauritius|Rwanda|South Africa|Branson Centre|Flow|Tracey Webster
© Reuse this
Entrepreneurs often require extra capital to grow and expand their businesses but are unable to access it, owing to a lack of credit history and collateral.
“This is killing small businesses in South Africa,” asserts Branson Centre CEO Tracey Webster.
The regulatory environment in which businesses operate is also too rigorous for small businesses, she adds.
She points out that it takes about six months to register a business in South Africa with the Companies and Intellectual Property Commission, while the equivalent process can be done in a week in other African countries such as Mauritius and Rwanda.
“This limits an entrepreneur’s potential, slows business growth and discourages [the entrepreneur],” Webster stresses.
Financial and business laws are also too rigorous for small business to comply with and are more appropriate for big businesses, the Branson Centre states.
“A form of tax exemption should be put in place during the first few years of a small business’s existence, which will enable it to grow and make a profit.
There are many things in the regulatory environment that can be improved to help small businesses. Government should pay attention to aspects such as tax require- ments and business registration to ensure entrepreneurships are encouraged and nurtured,” Webster suggests.
Further, the Branson Centre, which has been 100% funded by nonprofit foundation Virgin Unite, now aims to raise 50% of its own budget this financial year.
“We are encouraging corporate businesses to choose us as an option for their enterprise development (ED) spending, and, in doing so, will receive broad-based black economic-empowerment points for their scorecard.
Investing in entrepreneurship is a great way for companies to help create employment and alleviate poverty in South Africa,” says Webster.
Branson Centre Developments
The Branson Centre of Entrepreneurship, launched in 2007, decided last year to reposition itself from being a school to focusing on supporting entrepreneurs who have already started a business but who need assistance in growing and expanding those businesses.
The centre focuses on practical hands-on training through a foundation course ensuring the entrepreneurs have all the basics in place, allowing for a follow-up advanced course which explores growth models. The centre accepts entrepreneurs who already have established businesses.
“We don’t incubate ideas,” Webster states.
The centre typically deals with people from disadvantaged communities who do not have a tertiary education.
“These people successfully started a business and realised they didn’t have the business skills, knowledge or network to expand it, she notes.
“If an application to the Branson Centre is successful, we help entrepreneurs nurture and support their businesses.”
Webster states that an entrepreneur’s business does not have to be profitable to receive assistance from the Branson Centre, but it must be operational.
The centre also opens up networks to financial institutions and organisations that fund entrepreneurial start-ups.
“We spend a lot of time ensuring our entrepreneurs are investment ready and that they have adequate business plans in place so that these institutions will consider funding them,” she explains.
She further adds that the Branson Centre’s training programmes are focused on the specific needs of entrepreneurs.
The centre conducted a research study, the results of which were published in its ‘The Young Upstarts’ report in 2011, and interviewed 800 aspiring entrepreneurs about their most pressing requirements to succeed in business.
“We found that entrepreneurs needed mentorship, access to business knowledge and finance, as well as skills training. Therefore, we decided to focus our training programmes on those skills,” the Branson Centre states.
Last year, the centre assisted 180 entrepreneurs and it aims to assist a further 320 entrepreneurs this year.
“We are about halfway to this target,” Webster states.
Matric Not a Necessity
“We are continuously surprised by entrepreneurs who have managed to get a business off the ground without a proper education.
“Richard Branson never finished high school or went to university and he created more than 100 operational businesses across five continents, which has created jobs for 50 000 people. That proves that entrepreneurship can alleviate the skills gap and job shortage in South Africa,” she points out.
However, she notes that financial management does prove to be problematic for aspiring entrepreneurs who have not completed matric.
“We are, therefore, very focused on the type of finance courses we provide for entrepreneurs so that they can easily understand cash flow, profits and losses.
As long as entrepreneurs have institutions, such as this one, to turn to for support, there is no reason why they can’t make a success of their businesses. We try to provide as much assistance as possible in ensuring entrepreneurs are able to succeed,” the centre notes.
Webster adds that Internet company Google visited the centre in June, as part of its yearly Make a Difference Day. The company not only assisted entrepreneurs in setting up their own websites and networking platforms but it also provided advertising advice and support.
“We were actually exploring the benefits of social media for business development at the time,” Webster notes.
Entrepreneurs also had the opportunity to have face-to-face meetings with the Google staff to ensure they are running their businesses efficiently, she concludes.
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Other Economy News
Updated 6 hours ago South Africa could see food shortages in the next ten years as the country’s commercial farmers, with an average age of 62, start to retire and the new crop of farmers entering the sector are unable to fill the void, placing considerable pressure on the nation’s...
Updated 6 hours ago International investment holding company Bidvest has lifted headline earnings a share by 5.2% to 886.3c for the six months ended December 31, helped by an “excellent” contribution from the group’s Foodservice business and positive currency effects. Bidvest CEO Brian...
Updated 5 hours ago The Department of Economic Development, together with Spanish solar company Abengoa and the Industrial Development Corporation on Monday launched a 100 MW concentrated solar power (CSP) park, about 60 km outside Pofadder, in the Northern Cape. Speaking to journalists...
Updated 5 hours ago South Africa could face another delay in its already years-delayed digital migration project if government adopted the much-disputed conditional access (CA) for the set-top boxes (STBs) required to intercept digital broadcasting frequencies. Emerging black-owned...
Updated 5 hours ago JSE-listed real estate investment trust Dipula Income Fund has entered into agreements to acquire the Umzimkhulu Shopping Centre, in KwaZulu-Natal, as well as the Corporate Industrial Park, in Polokwane, from two different vendors for R336-million. The industrial...
Recent Research Reports
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
This Week's Magazine
Subscribe to Engineering News and Mining Weekly for two years, but only pay for the first year. The weekly editions of Engineering News and Mining Weekly will be posted to your preferred postal address and also gain access to:
National flag carrier South African Airways (SAA) is in an advanced stage of renegotiating its deal with European airliner manufacturer Airbus to acquire A320 single-aisle (or narrow body) aircraft. The aim is to replace ten of the aircraft still on order with five...
Worldwide, the main thrust in the ports industry over the past decade or more has been to increase efficiency. Traditionally, ports have been run by engineers and mariners and, in the past, increasing a port’s capacity was achieved by expanding the harbour. “That has...
What do you do when an elephant has a toothache? You call Dr Gerhard Steenkamp from the University of Pretoria’s (UP’s) faculty of veterinary science, Onderstepoort, one of only two elephant ‘dentists’ in the world.
The 2015 Sanlam/Business Partners Entrepreneur of the Year (EOY) competition was launched earlier this month in Johannesburg, with the main focus on creating and inspiring entrepreneurs to create jobs and boost the economy.