The advent of business development incubators in South Africa was welcomed by many entrepreneurs and there good reasons for this. Research shows that many stable economies in the world, including Switzerland, Finland and Singapore, share a common trait – they have invested heavily in developing the SME sector in their respective nations. As a result of their special focus on helping small businesses to grow, they have managed to encourage innovation, create more jobs and decrease their crime and poverty levels.
Despite these significant results, many countries, however, are not following this lead. In fact, globally about 80% of all new businesses fail within their first five years of operation.
Among them is South Africa. In 2011 The Global Entrepreneurship Monitor’s Survey on Global Entrepreneurship published stats about South Africa which revealed that an estimated 5,579, 767, small business owners, of which almost 80% were retailers while the remaining 20% were service providers. These businesses accounted for almost 12 million jobs in the country.
Support and resources available
But all is not bleak; in South Africa, the good news is that there is plenty of business support, and a Government that at least tries to assist the SME sector to grow.
While passion and hard work are recognised as vital aspects to help business owners thrive, a solid support system and access to learning, skills development and mentorship are often the difference between success and failure. This is where business support and Enterprise Development providers come in. ED companies provide small and emerging businesses with the necessary infrastructure and strategic guidance, as well as an environment in which information, experiences and ideas can be freely exchanged. They also offer an increasingly important solution to corporates looking to bolster their BEE Scorecards through ED and Supplier Development.
Done properly, good business support programmes bolster the entrepreneur’s skills and knowledge base, better preparing them for business in the open market. To cut a long story short; a good small enterprise development programme works to strengthen entrepreneurial management skills through capacity building and training, and this translates to the adoption of good workplace practices in micro, small and large enterprises
Many organisations and individuals engaged ‘in the trenches’ in enterprise development and support to emerging entrepreneurs report increasingly positive signs of a renaissance in entrepreneurial activity, in contrast to the bleak reports. Incubators and ED specialists such as Aurik, Fetola, Raizcorp, Thriving.Network and others are doing sterling work, and programmes like Legends and SAB Kickstart have delivered some impressive results. The sharpest of business owners use a combination of offerings – free Govt support and proven, results-driven ED providers.
To conclude, the South African government recognises that small businesses are vital contributors to the health of the economy and to diversity of opportunity in our society. Small businesses boost productivity, increases competition and innovation, creates employment and prosperity, and revitalises our communities but without the support of reputable and reliable many ED companies face the prospect of failing to deliver where it matters most