Young entrepreneurs honoured at SAB awards (South Africa)

Visionary South African entrepreneurs were rewarded this week at the 14th SAB KickStart awards at the Sandton Sun hotel. Finalists included companies in hospitality, design, manufacturing and construction.


Business of the Year: Sooveir Rajkumar with his Meatalicious products
The KickStart program is an initiative developed and funded by SAB, the world’s second largest brewery, to give previously disadvantaged youths aged between 18 and 35 an opportunity to start or grow their own businesses.

Business of the Year
The award for Business of the Year went to Sooveir Rajkumar and his company Meatalicious (trading as the Boastful Butcher). Rajkumar received prize money of R200 000 for his success in developing a range of healthy, innovative and Halaal burger patties. He is also the creator of the first commercial prawn burger patties in South Africa, sold in Spar and Checkers outlets in Kwa-Zulu Natal.

The brothers Lonwabo and Lubuyo Rani of Silulo Ulotho Technologies in Khayelitsha, Cape Town, won second prize of R150 000. Their company provides computer access, training, sales and repairs at seven centers and Internet cafes in Khayelitsha and Guguletho.

Third place went to Reggie Makheta, owner of the Roots Restaurant and Gallery in Soweto. His restaurant is the first in Soweto to combine traditional Sowetan meals with an art gallery, and is helping to change the culinary landscape of the township.

Development category
In the development category the winner of R150 000 was Tshepo Makhavu of Mabunga Toilets. The 33-year old won first prize for his initiative of installing cost effective and durable stand-alone concrete toilets of his own design in the rural community of Thohoyando.

Other awards in the development category went to Tebogo Mashego, a 27-year old woman who runs Diep K Steel & Aluminum, a manufacturing business in Booysens, Gauteng and Vusi Sibisi, owner of Vuma Tech Engineering in Soweto.

KickStart class of 2008
This year’s KickStart finalists were selected from a group of about 120 candidates chosen to attend business skills training courses, before preparing a business plan. The most successful business plans were rewarded with a seed capital grant of between R50 000 and R150 000.

After six months of mentoring, three businesses were selected from each region based on their use of the grant money, the performance and sustainability of their businesses and the impact KickStart had on their companies. Top performers won further mentoring and additional grant money.

Program success
South Africa has one of the lowest levels of entrepreneurship in the world with entrepreneurs contributing around 35% of GDP, compared to 60% in countries like Brazil and India. Fewer than 20% of those who start their own business survive past the first two years.

According to SAB, 81% of the companies that received KickStart grants since 2001 were still in business 3 years later. The combined turnover of grant winners was more than R95 million per year and the growth in full time jobs created was 100%.

“SAB has always been determined that KickStart be a sustainable program. I am delighted that this year’s finalists have taken as much from the mentoring program and training as they did from the monetary grants they received,” said Dr Vincent Maphai, SAB Executive Director of Corporate Affairs and Transformation.

SAB has invested more than R45 million in funding grants in the KickStart program since 1995.

Angela de Joseph Salutes African American Entrepreneurs

Financing Your New Business

Many people see funding as their biggest stumbling block on their journey of entrepreneurship. In this section, we’ll look at various options with regards to funding your business.

In this introduction, I would like to share the following tips with you.

Firstly, if you can possibly avoid it, don't borrow money. Obviously, many business paths require funding, such as buying a franchise or buying an existing business. These have a lower risk association because they are generally turnkey operations, meaning that you will start to earn money almost immediately. When you are starting a business from scratch however, making money is often much more difficult in practice than in theory. When you owe money to a lender it puts immense pressure on your business, and it is often the lender who forces you to shut down the business prematurely. If you can start your business without borrowed money it can help to prolong your opportunity to buy the time you require to succeed.

Please remember that personal overdrafts and credit cards are even more risky than borrowing start-up capital. Avoid them at all costs.

If you need small amounts of start-up capital to buy equipment or stock for instance, rather rely on personal savings or friends and family. I know this might sound strange, but 80 percent of businesses in the United States are funded by personal savings and friends and family, and it is very similar here in South Africa. The risk is lower this way, providing you keep the lender fully updated with the progress of your business.

If you do need to borrow larger sums of money, then consider your options carefully. Don't just go for the first institution that offers you funding. There is often more than one option, and you should look for the one with lower risk associated with it, as well as preferable payment terms and interest rates.

Lastly, most institutions frown on funding personal salaries and expenses. Try to cover these yourself as much as possible. Also, try and reduce your monthly costs in every way possible. Starting a business while you have personal overdrafts and credit card debts is unwise. Banks can become very sticky when it comes to personal finance facilities, especially when they don’t see regular income coming in. Don't make a mistake here, because cutting down in the short term is far less painful than losing it all

Brian Walsh

Internet Businesses and Traditional Businesses

In today's world of the Internet it is interesting to note the massive differences that have occurred even in the last decade.

At the ripe old age of 41 I am fortunate enough to have grown up, along with my business partners, having known the old business world and being able to embrace the new.

When we had our first major foray into the business world through our original company, Nexxus (UK) Limited In 1995, we tried to avoid all the "pitfalls" of traditional business and branch into distribution as opposed to manufacture, thereby avoiding warehousing, and excessive staffing, crippling rules about health and safety and the usual expenses such as lorries, forklifts etc.

What did we end up with? Warehousing, staffing, lorries forklifts, racking, 50 000 square feet of warehousing and a pile of overheads.

Thus, when I created the concept of our current business three years after selling Nexxus, I think that one of the primary directives was to avoid the aforementioned traditional costs.

Introduce internet business -- at Citylocal, we are able to conduct a successful, communications-based business encompassing several countries without entering into the traditional problem-infested areas of international transport, late goods, letters of credit & warehousing.

We are able to conduct business using technology rather than physical goods and even perform presentations using 21st century systems that 10 years ago would have seemed impossible.

In a sense we are able to conduct business in a manner that perhaps in the 1980's, for example, was only available to the money or stock trading markets.

As one is probably well aware, why trade the physical stock if it possible to trade the price of the commodity? Ultimately, of course, the physical stock or money will have to move but why dirty one's hands?

This is essentially what internet business can deliver for people that are able to free themselves from the mindset that they have to be involved in moving the physical goods or indeed the service necessary to satisfy the customer.

With an increasing amount of people using the net as a search facility or knowledge accessibility forum, the internet is gaining ground every week on traditional business.

What does this achieve for people apart from the obvious benefits of being able to work at home more effectively or gain instant access to vast amounts of information?

Put very simply it enables people to reach a previously untappable audience and, given the right work done with search engine optimisation experts, enables people to reach massive potential customers.

The whole approach to the internet is what is important and the realisation that one does not necessarily need to physically transport certain goods to be an effective market maker is essential.

This all being said, the age-old necessities of a business hold true- the service or product must be desired, good quality and the right price to make the potential transaction attractive.

Thankfully this is one area that I personally hope will never change and good old economics should see us through on this one - opportunity and choice.

All About the ‘Chocolate Lady’: A Young South African Entrepreneur

One of the main purposes of this blog is to introduce inspirational social entrepreneurs and innovative organizations to a wider audience outside of their home countries.

In Cape Town at the end of November last year, I met Nontwenhle Mchunu, a formidable, yet cautious young woman from a small town in Kwa-Zulu Natal, South Africa. She is on a mission to create Africa’s first prestigous, world-class chocolate brand, using only ingredients from African soil that have been sustainably produced.

She is well on her way already: in 2008 she won the South African Businesswomen’s Association Regional Business Achiever Awards in the social entrepreneur category for her newly established company, Ezulwini Chocolat; she has trained at one of Europe’s top culinary institutes, Leatherhead International, and in Switzerland where she learned from the world’s leading fine-chocolate makers.

Her ambition is to build a successful chocolate business in the townships of South Africa to create jobs (where unemployment runs as high as 40%), expand access to vocational education for many youth through her business, and use only cocoa and ingredients from sustainable African sources.

Mchunu, or “Chocolate Lady”, has a passion for both sustainable change and chocolate, and South African supermarket chains and hotels, like Pick-n-Pay and Protea Hotels, have already begun to retail her products. With her lofty expectations, entrepreneurial drive, and plans to become South Africa’s leading Chocolatier, I expect we will see her chocolate around the world in the not too distant future.

I met Mchunu at the Evian Group at IMD’s capacity building workshop in Cape Town that was focused on inclusive growth in Africa.