Why faster Internet makes accounting easier
South African Internet speeds may not be the fastest, but they are increasing. Cable.co.uk conducted more than 163 million speed tests in 200 countries and ranked SA number 76 when it comes to our average global broadband speed. In 2017, it ranked 80th.
If you’ve ever had to wait for a video to buffer or had your online shopping experience thwarted by poor connectivity, you’ll understand how a speedy Internet connection can improve experiences in both your personal and professional lives.
Think this doesn’t really affect your accounting firm? Think again. Here are a few unexpected ways that faster Internet connectivity can make an accountant’s job easier:
- Save time
According to a SanDisk study, the average business loses a whole working week each year, per employee, due to slow computers and poor Internet connections. Consider for a moment what you could do with an extra five days every year. If your accounting practice is run by just 10 people, that amounts to an extra 50 days each year. And, as a number cruncher, you’ll know that having more time means more work gets done, which means more revenue and more profit.
- Join the content marketing revolution
Gone are the days when content was only a priority for the media and communications industry. Today, all businesses that want to market themselves must have a content strategy. Video marketing has been shown to have a direct impact on business performance. According to Hubspot, 43% of people want to see more video content from marketers.
Producing a short and simple video, detailing how to complete a personal income tax return, might just be the marketing material you need to secure new clients. But without a speedy Internet connection, this wouldn’t be possible.
- Become more data-driven
It’s no surprise that when you are using data strategically, your business is better positioned to make more informed decisions.
But being able to store, sort, access, and analyse your accounting data in real time demands a fast, reliable Internet connection. With fibre, that’s no longer a concern. Accountants with a good Internet connection – and capable analytics tools – can instantly update and share financial information, offer greater insights, and exceed customer expectations.
- Consume software as a service, in the cloud
The cloud may seem far too technical for accountants to handle but it is here and it a great asset for accounting firms. The obvious benefits include the fact that you can securely store and access your data anywhere, at any time, and can easily access the most up-to-date information. With cloud, you can say goodbye to expensive software licenses because you only pay for what you need and use.
If you’re keen to scale up or down as your needs change, cloud gives you this flexibility. And with solutions like those offered by Sage, compliance is as easy because tax rate changes are updated instantly.
Accounting firms have to deal with more and more data and they often need help handling all this information. At Sage, we’ve focused our R&D spend on cloud-based solutions. It won’t be long before running your accounting practice in the cloud will be the norm.
- Future-proof your business
High-fibre Internet increases the likelihood of business success. With the lines between the physical and digital world becoming ever more blurred, businesses have to deal with so many “things” they’ve never had to handle in the past. Having the agility to quickly adapt your business model to handle these changes is a must.
Your Internet connection may be fast enough today, but you’ll need to increase it in the future. Why not upgrade your Internet connection before it becomes an issue and take a step towards making your firm a digitally enabled business?
From bean counter to trusted advisor: Why accountants need to be more curious
Have you ever watched a child interact with something they’ve never seen or experienced before? They’re curious, they ask questions, and aren’t afraid to explore this novel situation. Accountants could learn a thing or two from children.
This is according to Brandon Rajah, director of Trailblazers Accountants and Northern Region Chair of the South African Institute of Professional Accountants (SAIPA). Speaking in an episode of the Sage #NextGenAccounting podcast, Rajah explains that most accountants find being curious quite uncomfortable because their job is generally methodical and rules-based.
But being more curious is essential for accountants who want to become the kind of advisors their clients really need. This is especially important, as technological advancements make it easier for anyone to be a number-cruncher.
Bye-bye bean counters
The accounting profession – and all of the different tools that enable it – have evolved, says Rajah. For example, historical reporting is still necessary but is becoming less and less important. Business owners can’t change yesterday’s sales figures, so accountants should be focused on helping them prepare for what comes next.
Rajah compares it to driving a car. When you drive, you regularly check your rear-view mirror but there’s actually very little you can do about what’s happening behind you. Which is why the rear-view mirror only occupies a small portion of your vision, he notes.
“You should be focusing on the windscreen, on what’s happening in front of you. In the real world, this means not just understanding your client’s business but building a broader understanding of the entire industry, it’s challenges and opportunities, and how your client can navigate this.”
Modern accounting software makes it easier for businesses to balance their books themselves. In fact, many of these tools run automatically without any human intervention.
And yet, so many accountants remain fixated on the tools.
Rajah attributes this tendency to a lack of confidence. Sure, the tools are helpful, but if you don’t know how to use them, they’re pretty useless, he notes. “Tools are enablers, but they won’t do the work by themselves.”
This is where accountants need to step in and do what software can’t, says Rajah, noting that the value accountants add is more about knowing what’s happening in the world around them.
“You can’t be an advisor if you have your head in the sand. You need to become more aware of what’s happening, not only in your clients’ business but in their industry, the local economy, and the world,” he notes. Let’s imagine you have retail clients. Their prices are likely to be affected by changes in the price of fuel or strikes in the logistics industry. Curious accountants understand what’s happening and how it will affect business going forward. This perfectly positions them to advise clients about how to react, he continues.
“It’s not the strongest who survive; it’s the most curious. The ones who ask the right questions, who experiment, who explore the unknown, who absorb everything around them – much like children do,” says Rajah.
The best accountants are the ones who help their clients understand what change means for their businesses, and offer advice about how best to adapt.
For accountants looking to become trusted advisors, it is critical to always be learning, says Rajah. In line with this, accountants must adapt to new customer demands. One way to tap into modern customer needs is to hire younger talent because they offer a fresh perspective and bring creativity and curiosity into the industry. “This could be just what an established firm needs to get out of a rut.”
But Rajah asserts that accounting graduates shouldn’t assume that learning ends when they leave college. It never stops. The sooner novice and experienced accountants commit to lifelong learning, the better advisors they’ll become.
According to Rajah, one should also never underestimate the value of human connection.
“The work we do impacts people’s lives. Our clients aren’t businesses. They’re people, with families and bonds to pay. We help them to look after those interests by being proactive, foreseeing what might happen, and preparing them for action. And that’s something technology can’t do.”
Keen to access more insights from Brandon Rajah? Listen to the full Sage #NextGenAccounting podcast below.
Fear not! AI is the tool small retailers need
The retail industry has just emerged from its busiest time of the year. As shopping holidays like Black Friday and Cyber Monday gain popularity in South Africa, many local retailers struggle to keep up with the rush. This is understandable when you consider that, in 2018, South Africans spent a staggering R2.9 billion on Black Friday alone, according to BankservAfrica.
A great opportunity to build hype around their businesses and attract new customers, this time is also stressful. Not only do small retailers have to go toe-to-toe with their larger counterparts, but the shopping frenzy also puts strain on their systems and staff.
While some small retailers are apprehensive about artificial intelligence (AI), it can actually help them survive the mayhem.
Gartner described AI as the top retail trend for 2017, with large retailers already using it to boost customer experiences and outdo their competitors. It’s time for small retailers to also start thinking about AI as a tool that opens up a world of opportunities.
Not convinced? Here are four ways small retailers can bring AI into their operations:
- Make the most of marketing spend. Using AI and machine learning, retailers can analyse buying behaviour and segment their customers into different demographics, so that they can more effectively target specific “personas”. These insights make it possible to reward loyal customers with personalised incentives and identify opportunities to engage with new customers. And the beauty is that many of these insights are freely available. Facebook, for example, will help you target customers who have expressed an interest in the type of products and services you sell.
- Believe in bots. Today, we expect businesses to be available 24/7. But this isn’t always possible if you’re running a small business. Chatbots use AI to interact with humans through automated responses to queries. These bots can solve a customer’s problems and recommend products that they might be interested in. Facebook Messenger, Chatfuel, and FlowXO are great tools that make it easy to set up your own bot. Sage’s own Pegg, a smart digital assistant, also automates much of your accounting processes – another way to keep your business running while you sleep.
- Optimise your inventory. On a day like Black Friday, stock flies off the shelves, making it imperative that stock levels are updated in real time. Your customers will get frustrated if they want to purchase something, only to discover that there is no stock available. The Internet of Things (IoT) and AI simplify your supply chains and can predict what products will most likely be in demand based on factors like the weather, historical buying patterns, and customer behaviour. This means you’ll never have too little or too much stock.
- Boost cross-channel engagement. We’re living in a multichannel world. This is especially true when it comes to shopping. Consumers will use their mobile phones to browse and compare product prices before buying items in-store. With AI, you can seamlessly carry a conversation from one channel to the next, offering a consistent customer experience. Once customers are in your store, AI will even help you to track their movements and send them push notifications about specials when they walk past certain products. Mobile wallets, beacons, and smart shelves not only improve the customer experience; they can also bring more customers into your store.
Want to be a smarter, faster, and more efficient retailer? AI frees up your time to focus on product innovation and growing your business. If you haven’t started investing in AI, it’s time to get moving.
5 ways to grow your business on a low budget
There’s no denying that having access to funding during the first year of building your start-up business simplifies the process.
If lack of money has ever stopped you from starting your own company, you’re not alone. Research report ‘The Hidden Factors: SA Women in Business’, led by the Sage Foundation and Living Facts, found that 61% of female participants opted out of starting their own businesses for that very reason.
But a successful business is built on more than just money. Managing your time effectively, honing your skills, showing grit, and hustling, are just as important as the state of your finances. Our research found that 21% of non-business owners believed they had good business skills, and only 33% of women who run their own businesses believed they had good financial skills.
Here are five smart ways to make your business a success, without funding:
- Be smart with your money. Because so many women believed that the only capital that they could access to start their business was their own, 84% used their savings. Only 17% believed they were capable of accessing more formal funding, and even fewer actually secured funding from a bank. Fewer still knew that venture capital, crowdsourcing, grants, and angel or seed funding were an option.
Each month, save what you can from your full-time job to put towards your business. The first few months of building your start-up are make or break, and a safety net is crucial.
- Be smart with your time. One of the biggest mistakes new business owners make is underestimating how much time needs to be invested in establishing the company – a lesson that 25% of women who left entrepreneurship to return to the corporate world learnt after experiencing time poverty.
Make the most of your spare time by pursuing new business opportunities and investing in yourself. While you grow your existing skills, learn new ones, too – like basic video editing or design. Seek to understand your industry and competitors, and isolate what sets your business apart. Once you’ve nailed that down, focus on what makes you different – and keep hustling.
- Be smart with your people. In business, it’s inevitable that you’ll deal with drastically different people and personalities. This demands a high level of emotional intelligence, yet almost 22% of founders felt that finding and managing the right kind of people for their business was difficult.
Rather than fearing those who know more than you, lean into the fact that they can offer guidance and a fresh perspective on things. Don’t forget to cultivate your networks, as these can offer opportunities, too.
- Be smart with your resources. While starting a new business is exciting, it’s important to start with the basics. If your business can be run from home rather than a rented office, work from there, and don’t buy any equipment that isn’t crucial to your operation right now.
Before spending time and money on creating a marketing strategy, fine-tune your elevator pitch and business differentiator. These matter most in the early phases of a business.
- Be smart with your processes. The bulk of the challenges mentioned here can be dealt with by adopting simple and smart business automation processes. Instead of joining the 36% of women who struggle with cash flow, and the 20% struggling with debt, consider automating your business with cloud-based accounting software, like Sage.
It’s easy and convenient to manage your finances this way and helps you to address other areas of your business and identify new opportunities for growth. It also takes off the pressure you experience when managing people and frees up your time to focus on what really matters: growing yourself, your business, and your team.
While money is certainly needed to start a business, don’t underestimate the other key ingredients. The investment of your time and skills is just as important and should feature in your business plan accordingly.
Tips for growing your customer base in 2019
The age of the customer is here. According to Forrester analyst Kelly Price, this trend will see many successful enterprises reinventing themselves in an attempt to better understand and serve increasingly powerful customers.
But here’s the issue: not only do businesses have to come up with smart strategies to attract new customers; they also have to find ways to keep existing customers coming back for more.
Here are our 10 top tips to expand your customer base in 2019:
- Embrace social. A recent study by World Wide Worx and Ornico revealed that 16 million South Africans are on Facebook. Social media platforms allow businesses to engage with existing customers and to raise awareness about their offerings among potential clientele. Getting customers to visit your website via social media also improves your search rankings and, as a result, your organic growth.
- Let them test the waters. With so many options out there, customers may need a little convincing to choose your offering over another. By providing no-strings-attached experiences, you can give people the nudge they need to become paying customers. Ideally, you should try to subtly get something in return, like an email address for your marketing database.
- Take a personal approach. Businesses have so much data about their customers and this should be used to personalise experiences. Consider how delighted customers will be if you offer them specials on items you know they like or use. At the end of the day, it’s about respecting them as people and treating them like more than just another sale.
- Network. People talk. If they’ve had a bad experience with your business, it’s unlikely that they’ll recommend you to a friend. Trust and authenticity are powerful commodities in today’s oversaturated business landscape.
- Find solid partners. In line with the above, partnering up with a business that offers complementary products or services is a great way to tap into a new audience. If you’re in the device repair business, why not align yourself with a company that sells accessories, for example?
- Show your skills. If you’re an expert at something, it’s a good idea to share your knowledge, for free. By setting up a YouTube channel or offering master classes, you’re tapping into people’s natural curiosity and you’re also accessing a captive audience who are already interested in what you do.
- Diversify. If the only thing you offer at your business is shampoo, and you’re selling plenty of it, now may be the time to expand your product range. Something as simple as bringing in options at different price points can be the trick to attracting a variety of new customers.
- Offer micro-services. Long-term contracts that involve large financial commitments make people uncomfortable. Flexibility is key. If you can, try to unbundle your services into smaller pieces so that your customers can pick and choose what they need.
- Dump doubt. You need to make it really easy for customers to do business with you by removing any financial, psychological, or emotional risks. It comes down to giving people options – perhaps they don’t want to pay using a credit card. This means you need to allow them to do an EFT or mobile payment. With the right cloud-based accounting solution, all of this is automated and fuss-free.
- Don’t forget to adapt. Things change constantly. Staying ahead is about keeping updated on what’s coming next. This requires an innovative mindset. The businesses that succeed are the ones that aren’t afraid to constantly evolve their products and services to meet changing customer needs.
If you want to generate leads, retain existing customers, scale your business, and diversify into new markets, your customers must always be top of mind. Every touch point is a chance to pique their interest. Ensure you’re taking advantage of every opportunity.
Why SMEs need options to succeed
Funding conundrum: Why SMEs need options to succeed
Did you know that as many as 75% of South African small businesses fail within the first year? A lack of funding, or poor financial management, is one of the biggest stumbling blocks. For many SMEs, securing funding proves tricky, either because they haven’t been in business for long enough, or they don’t understand the ins and outs of the lending market.
With this in mind, alternative lenders offer a welcome lifeline for small business that are struggling to survive. Speaking during a recent episode of the Sage #NextGenAccounting podcast, Marilynn Leonard, Co-founder of FundingHub, a credit marketplace that matches SMEs with suitable lenders, outlined a few reasons why SMEs fail to secure funding. These include:
- Lack of compelling reasons to borrow money;
- Applying for a loan equal to their annual turnover; and
- Not being in business for at least a year and not turning over R1 million.
What many small business owners fail to understand is that they can only borrow a percentage of their turnover, she explains. “No lender – whether a bank or an alternative lender – will advance a loan equal to their entire turnover.”
Alternative lenders are not registered with the National Credit Regulator and cannot loan money to businesses that don’t meet the one year / R1 million requirement. If you fall into this revenue bracket, you’d have a better chance securing funding through an equity partner or personal finance, advises Leonard.
Banks vs alternative lenders
Leonard believes that banks should be an SME’s first choice for funding because they’re the cheapest. But the process of securing funding through a bank can be lengthy because of the checks and balances they have to complete.
Should an SME need money quickly – to pay invoices or salaries, for example – alternative lenders provide a good supplementary option. But this comes with a price tag. Alternative lending is costly, so the benefits of accessing funding must outweigh the cost of acquiring it.
How to guarantee lending success
Start with the why. “Lenders won’t just hand over money,” says Leonard. “They’ll want to know the purpose of the loan, like expanding into new markets or paying salaries.” Once you know why you need funding, you can decide what funding options suit you best.
According to Leonard, it can be confusing, overwhelming, and time-consuming to find the right alternative funder. This is where a credit marketplace like FundingHub can prove valuable because these resources guide you towards the right lender without you needing to know the intricacies of the available products.
What funding? Here’s what you need before you apply:
- You must have an active bank account. No lender will give you money without one.
- At least one month’s trading activity and transactional history should reflect in that account.
- Gather your accounting records from whatever platform or accounting solution you are using.
- If applying for funding from a bank, you’ll need a copy of your audited financials.
In addition to this, she explains that credit marketplaces safeguard SMEs against unsecured lending, or “loan sharks”. While a same-day loan is appealing, the fine print often reveals high interest rates and undisclosed costs.
If you are eyeing alternative funding, be sure to partner with lenders that are registered with the South African SME Finance Association (SASFA), which encourages transparent and responsible lending.
Cash flow problems caused by slow or late players can cripple SMEs.
Should a small business have to wait between 30 and 90 days for payment, they run a high risk of experiencing cash flow problems, notes Leonard. As such, many SMEs are realising that alternative funding can be an enabler of their success.
Don’t forget that lenders are in business because you’re in business. They want to see you succeed. If you have a problem repaying your loan, banks and responsible alternative lenders are generally quite understanding and accommodating with loan repayment terms, Leonard explains.
Ultimately, everyone has a role to play in enabling SME success. From government and the private sector, to consumers who have the freedom to support small, local ventures over more established alternatives. “It has to be a collaborative effort. We have to work together to empower the SME space and micro enterprises if we want to grow the economy.”
Setting new hires up for success
If you’d like to kick off the New Year on the right foot, transforming your onboarding experience for new hires is a great place to start. The moment a new hire signs on the dotted line, they’ve entered into a relationship with your business, one that will flourish if it’s built on trust, respect, and a commitment to self-improvement.
The benefits of comprehensive onboarding programmes speak for themselves. Almost 70% of employees are likely to stay with a company for three years if their onboarding experience was positive. Similarly, companies with an engaging onboarding programme retained 91% of their first-year workers and saw an 11.5% improvement in employee performance.
By setting new hires up for personal success, the outcomes naturally feed into your business’s success, so everyone wins. Here are a few ideas to get the most out of your new hires:
- Roll out the welcome mat. By introducing new hires to their colleagues as soon as they start, you’ll immediately make them feel like they’re part of the team. Similarly, having regular catch-ups with new hires when they start out ensures that they feel welcome beyond the first day.
- Boost the benefits. If you want to attract the best candidates, you need to offer the best benefits. Not only does this boost loyalty, it also increases job satisfaction. Because different things motivate different people, it’s important to align benefits with the values new hires identified during the onboarding process.
- Set goals and plans to achieve them. Want to keep your team focused? Be sure to set solid goals and come up with realistic strategies to achieve them.
- Monitor performance. It’s important to regularly keep tabs on how someone is doing and adjust goals where necessary. This also makes it possible to reward good performance, introduce new challenges, and deal with issues promptly.
- Encourage them. By allowing your new hires to apply their knowledge to business challenges and offering them training opportunities outside of their comfort zones, you’re developing them into more valuable, well-rounded employees.
- Champion collaboration. There is so much value in learning from others. Enlist the help of more experienced team members to participate in the training of a new hire’s training. By doing so, you’re recognising their abilities and upskilling your new staff at the same time.
- Be upfront. It’s crucial to be honest with new hires. If the job requires a lot of overtime or entails working with tough clients, this should be disclosed upfront.
- Offer training. Cover everything from company culture and benefits, to opportunities for growth. Training people is costly because they’re not being productive in the short term. However, taking your time with on-the-job training means that you’re making sure that new hires fully understand what they need to do before they actually start working.
- Communicate. This is essential. New hires must understand expectations and should feel comfortable asking questions. If experiences at their previous jobs can be used to improve productivity at your business, they should be able to suggest alternatives.
- Stay positive. If you’ve ever worked with a negative colleague, you’ll know how someone else’s mood can set the tone for the entire office. To ensure your team is enthusiastic about your product or service, you need to create a positive space for them to work.
Keeping people motivated and productive comes down to providing them with the tools, knowledge, and support they need to do their best work. With all of these elements in place, they’ll be perfectly equipped to come up with bright ideas, they’ll be more motivated, and their productivity will undoubtedly improve.
Ask these 6 questions before implementing IoT
The IoT journey: Six questions to ask before getting started
Did you know that a massive 20 billion smart devices will be connected via the Internet of Things (IoT) come 2020? The information generated by these devices offers real-time insights that can be used to improve the customer experience, increase efficiency and productivity, reduce operating expenses, and streamline processes.
With this in mind, embracing the IoT as a way to further business transformation seems like a step in the right direction. But if your IoT strategy isn’t properly developed, deployed, and supported using the right resources, tools, and data, you could face a number of challenges relating to costs, security, and regulation.
As such, before any business embarks on an IoT project, it’s important to answer these six questions:
- What is your goal?
It can be easy to get carried away with all of the opportunities related to the IoT.
With your implementation, be sure to start small and identify how your strategy can offer better customer service and increase revenue. A manufacturing company, for example, may start by looking at how the IoT could be used to manage inventory – from optimising logistics and maintaining stock levels, to detecting theft.
Be sure to have a clear vision of how your IoT initiative aligns with customer needs, as well as how to further your own strategic objectives. By doing so, you will ensure that you choose a solution that meets your business’s needs.
- What is your plan?
Planning is usually the most time-consuming part of the process. But this phase is an important part of setting you up for success – or failure.
Some questions to ask include:
- What are the metrics?
- Are there specific project timelines?
- What is your budget?
- What skills do you have available, where can you upskill, and where should you outsource?
- How will you deal with unexpected issues and changes in scope?
- What data can you access?
- Does this data relate to the business goal?
- Where are the gaps in processes, policies, and infrastructure and how will these be plugged?
- Can your infrastructure cope with the IoT?
If you’re still operating on legacy infrastructure, the answer is probably no.
IoT platforms must be able to support thousands of vendors, different standards, and millions of devices; all of which are constantly sending and receiving information. Legacy infrastructure simply cannot cope, meaning that additional investments in networking and connectivity may be necessary before getting started.
Whether you choose to manage the infrastructure yourself or outsource it, if you want your IoT platform to succeed, it needs to be secure and reliable. These platforms should also have the ability to automate tasks like real-time device discovery, monitoring and maintenance, data capture and analysis, and issue identification and diagnosis.
- Are there any security gaps?
With the rewards, come the risks. IoT attacks increased by 280% in the first half of 2017, as all of these unprotected entry points into business networks were leveraged by savvy cyber criminals.
Security has to form the foundation of any IoT project and must be considered at every point across your IoT infrastructure – from software and hardware, to each endpoint and all of the data they produce. The golden rule is this: if it’s connected, it must be protected.
Data is the main output of the IoT. Guidelines for protecting this information are governed by strict data protection regulations, including the Protection of Personal Information Act (POPIA) and the EU’s General Data Protection Regulation (GDPR). As a starting point of any IoT project, businesses must establish a solid data governance framework. This should outline what data will be collected, for what purpose, how it will be secured, and who will have access to it.
- Got data?
Implementing an IoT initiative is only valuable if you know what data you already have access to, what data you still need, and what you plan to do with the insights produced after the data is analysed.
Let’s imagine a mining company is using the IoT to improve site safety. To get this right, they’d need data about unstable shafts, faulty equipment, or poor air quality. This information can then be used to improve access control around dangerous areas.
These insights also help businesses better serve their customers by anticipating future needs and can be used to develop new and improved products. In addition to this, when used effectively, IoT data has a positive impact on workflow performance and outcomes and can help the business achieve its strategic goals.
To leverage these actionable insights, you need an advanced analytics infrastructure capable of analysing the structured and unstructured data generated from thousands of sources, all with different levels of protection.
- But can it scale?
By understanding the business value presented by the IoT, you can quickly identify what other areas of the business can be optimised and automated.
IoT networks and devices are always improving. This means that you need to build scalability into your infrastructure, which will allow you to easily upgrade as new technologies become available. Scalability also makes it easier to expand into new markets and capitalise on new revenue opportunities.
While the business benefits of the IoT are undeniable, without a proper plan in place to meet specific goals, and to manage costs and complexity, your initiative can quickly spiral out of control.
How schools around the globe teach entrepreneurship
In South Africa, there is a desperate need for entrepreneurs. With several ratings agencies downgrading SA to junk status, and GDP growth leaving much to be desired, entrepreneurs could offer the stimulation the South African economy really needs. Not only do these small business owners foster innovation and aid job creation, they also boost competition, promote new technologies, and create solutions that people actually need.
The 2016-2017 Global Entrepreneurship Monitor (GEM) Report is based on the findings of the GEM survey. According to the survey, South Africa experiences persistently low levels of entrepreneurial activity relative to the other countries that participated in the survey. And South Africa has one of the lowest established business rates, ranking 61 out of 65 economies. This is nearly five times lower than the average across Africa.
So, how do you create young entrepreneurs?
President Cyril Ramaphosa recently explained that young people must be encouraged to innovate and solve problems. Quite importantly, he stressed that they should be leaving school with the skills needed to turn ideas into real businesses and with an understanding that entrepreneurship is a viable career option.
Various schools around the world are already working to equip learners with the skills they need to take their entrepreneurial aspirations to market. Some examples include:
- Future Proof is a South African initiative that teaches children everything they need to know about starting and running a business. Skills are taught through bootcamps, online classes, immersion experiences, and podcasts – all of which are hosted by experienced coaches and entrepreneurs.
- Hand in Hand Eastern Africa is a Kenyan venture that sets up entrepreneurship clubs in primary and secondary schools to teach communication, entrepreneurship, and self-esteem. The clubs also teach more technical skills, like baking and soap-making – which learners will often pass on to their parents, who use them to supplement the family income.
- In Nigeria, the government’s Senior Secondary School Education Curriculum teaches the trade and entrepreneurship skills needed for poverty eradication, job creation, and wealth generation. The curriculum aims to promote an interest in entrepreneurship among the youth.
- The Young Enterprise Challenge is a project run by the Cambridge International School in Dubai. Giving students an initial investment, they are challenged to make as much profit as possible, learning about financial literacy and gaining confidence that will prove valuable when they eventually enter the workforce.
- Rhode Island’s Big Picture Learning programme pairs each student with a mentor who works in a field that is of particular interest to them.
- AltSchool, in California, aims to equip learners with a range of technology skills and promotes flexible thinking. Students are taught practical skills that will prepare them for careers in technology – like 3D modelling and how to build a circuit board.
- The Sra Pou Vocational School, in Cambodia, was built by the community. They worked with architects and learned valuable construction skills that they could later apply in their own businesses.
- In New York, the Blue School encourages children to wrap their heads around real-world problems by building 3D models of the city. Attendees are also taught how to fix home appliances.
- Finally, a Digital Youth Programme at the UK’s Dunluce School develops digital entrepreneurs and teaches students about careers and opportunities within the digital sector.
Many of the skills students learn through these programmes wouldn’t usually be part of a traditional school curriculum. They teach everything from investing, business strategy, problem-solving and brainstorming, to learning from failure, risk-taking, goal-setting, collaboration, and personal branding. These are just a few of the crucial skills learners need to succeed in a workplace that is changing at a rapid rate.
As we head into a new academic year, these global models and ideas should serve as inspiration to develop entrepreneurial-minded students who will one day create businesses that boost employment and grow the economy.
Why school leavers should start a business
You’ve finally finished school; it feels like you’ve waited your whole life for this. What’s next?
Perhaps you want to go to university, but that’s not an option for a lot of matriculants: of the 624,000 students who sat for the National Senior Certificate exams in 2018, only 172,000 can enrol for further studies at a university. For many young South Africans, studying further after school is out of reach, either because they can’t afford it or because they have families to support financially and need to find a job.
There is another option: entrepreneurship.
There are many advantages to starting your own company, including a chance to learn new skills, an opportunity to earn money doing something you love, and the honour of creating jobs for others and contributing to economic development.
South Africa needs more entrepreneurs for two main reasons:
- SMEs contribute 36% to the country’s economy, comprise 40% of all businesses, and are expected to provide 90% of all jobs by 2030;
- Thanks to technologies like artificial intelligence and machine learning, it’s estimated that 50% of today’s jobs won’t exist in the next decade. By then, there will also be a host of problems that don’t exist today, and we’ll need fresh thinkers and doers to solve them.
Here are a few reasons why you might consider starting a business:
- You can set your own hours, be your own boss, make money doing what you love, and have more time and flexibility.
- You get to use your knowledge and creativity to change lives and leave a legacy.
- An opportunity to develop yourself and others. Owning a business means you never stop learning and refining your skills – both business and interpersonal. You’ll wear many hats, including director, finance and HR manager, administrator, and marketer.
- There are no limits to how much you can earn and learn.
Before you start…
80% of small businesses fail within the first three years. Here are a few ways to avoid becoming a statistic:
Know your customer. 42% of start-ups fail because there was no market for their product or service. Is there one for yours?
Gather your resources. Improve your chances of success by improving your business skills, accessing funding (start-up and cash flow), finding a mentor, and getting support from friends and family. Find out what business incubators offer support in your industry.
Dive in. Identified a market? Accessed the resources? Good. Now, start. It doesn’t have to be perfect. Try, fail and try again. You’ll get better every time.
But test the waters first. Start small and test your idea with real customers. Implement their feedback – especially if it can improve your product or service – and test again.
Get a job. The best way to build a business is as a side hustle while you’re in full- or part-time employment. This gives you valuable workplace experience and also lets you build up a financial safety net.
Get an education. You need basic business management, marketing, sales, communication, accounting, and HR skills to run a successful business. As an entrepreneur, you’ll wear all these hats until you can afford to hire dedicated resources. Read books and sign up for free online courses.
Be patient. It can take up to three years to establish a business. Until then, you might not have a lot of free time or money but hang in there, it will come.
Coming up with a unique business idea can be challenging. If you can’t think of anything different, think about how you can do something that already exists, better. How can you make people care and how can you use your passion and skills to help people solve problems or add value to their lives?
- Good at Maths or English and can tutor schoolchildren;
- Have a knack for fixing computers and gadgets and can offer repair services in your community;
- Love animals and children and can become an au pair or pet sitter;
- Passionate about writing and can help small businesses with blog and social media content.
Building a business is hard work. It requires sacrifice and resilience in the face of failure and unexpected challenges. Success doesn’t happen overnight but, when you are successful, it will be even more rewarding and fulfilling.
You won’t always feel motivated and there will be tough days when you feel like giving up. But stick with it, and remember why you started your business in the first place.