STARTING YOUNG - JSE MAGAZINE

STARTING YOUNG

Developing SA’s youth to become entrepreneurs is one of the best ways to create a sustainable economy

STARTING YOUNG

The spirit and power of co-creation is ‘at the core of how we all – corporates, governments, NGOs and start-ups – think about economic development and growth, as well as future innovation’, says Saidah Nash Carter, head of Innovation Lab, Thomson Reuters in Africa. ‘I don’t think any sector is left out of that need to be collaborative.’ Based in Cape Town, Innovation Lab is one of just six globally, and currently the only one located in an emerging market.

According to Nash Carter, co-creation and collaboration is a core focus of how the lab works. ‘We look at ways to collaborate that either accelerate or add an exciting dimension to the work, which is where entrepreneurs and start-ups come in,’ she says. Leveraging its knowledge and expertise, Innovation Lab partners with individual and small companies to either scale up or accelerate what they already have in place.

Jayshree Naidoo, head of Standard Bank Incubator, says they offer support to young entrepreneurs through three key pillars, namely access to markets, access to development, and access to funding. ‘We don’t see the youth as the future – we see them as the present,’ she says. ‘They need to be focused on right now. We need to focus on what needs to be done to change the future and bring about the economic transformation we need. The jobs needed will come from entrepreneurship, so we need to focus on the next generation of entrepreneurs, and that starts with a focus on the youth.’

She highlights three initiatives currently in place that concentrate on young entrepreneurs, including Liberty’s Blue Skies enterprise and supplier development programme, structured accelerators, and Step Up 2 a Start Up. ‘We have a huge focus on youth in partnership with Liberty through the Liberty Blue Skies programme,’ says Naidoo. The initiative provides training through two- or three-day-long boot camp-style sessions, teaching participants basic business concepts and skills, including financial management.

The structured accelerators, meanwhile, run for periods of three, six or 12 months, and are mentor-led – with content delivered by experts. According to Naidoo, the most recently launched youth accelerator targets those in the industrial sector (including mining, manufacturing and construction) and presents content delivered by entrepreneurs. It also includes practical immersion in all of the represented sectors.

The Step Up 2 a Start Up initiative, now in its fourth year, is focused on social entrepreneurship and calls on SA youths to identify challenges around them and find innovative solutions. The target audience is Grade 9 to 11 learners, with each participant given a toolkit to assist them in implementing the skills learnt and to develop their own business ideas and models.

Learners also have the opportunity to compete in an entrepreneurial competition by submitting their business models for assessment and adjudication.

According to Naidoo, the programmes have seen huge success. ‘We did a survey last year after running one of our accelerators,’ she says. ‘Of the 52 entrepreneurs interviewed, within six months of completing their programmes, as many as 136 new jobs had been created.’

At Coca-Cola Beverages South Africa (CCBSA), young people are introduced to the possibilities of entrepreneurship through a concept called Bizniz in a Box, a youth-empowerment programme that offers young people living in townships the opportunity, skills and funding to set up and run their own successful container shops.

The identified attendees are trained in sales, marketing, stock management and finance, and they’re also given access to funding to start their own microbusinesses. They attend an entrepreneurial boot camp where they’re taught basic business skills. Prospective entrepreneurs also complete a National Qualifications Framework Level 2-accredited programme and demonstrate their grasp of basic financial principles.

Next, they are allocated a fully stocked container shop, which they operate for two months, using their own initiative to market and promote the store and boost sales. Once this period lapses, their business becomes operational, at which point they must manage the store independently, so gaining practical experience, backed by CCBSA guidance and support. Part of this stage involves monthly repayments towards the start-up capital costs of the store and stock. After having completed repayment of a portion of the capital cost of the store, as well as having met the performance criteria, the store officially becomes theirs.

Between December 2016 and February 2017, total revenue for the first six shops increased from R50 000 a month to more than R200 000, demonstrating the massive potential of this programme.

According to Mags Ponnan, head of the business incubator and customer value propositions at FNB, one of the organisation’s main initiatives (in partnership with the Gauteng provincial government) is Business Incubator. It also offers business tools, including for accounting, payroll and invoicing that, he says, reduce some of the angst for start-up entrepreneurs.

‘From a mentorship perspective, we have partnered with the Gauteng provincial government to mentor the youth from the Tshepo One Million initiative. The entrepreneur will have access to one business workshop and three months of business support. Based on the goals of the entrepreneur, we tailor our approach to each entrepreneur in the programme,’ he says.

Mariette Myburgh, executive of HR and transformation at MiX Telematics, says the company is highly aware of the important role young entrepreneurs play in SA’s future. ‘Often, it’s not just one life you’re touching – it’s numerous. So this is an important driver of growth creation for us,’ she says.

Although MiX Telematics, a provider of fleet and mobile asset management solutions, has had programmes in place for several years already, they’ve really ramped this up in the last two years, says Myburgh. She explains that the company has two principle programmes – one focused on enterprise development, the other on supplier development. It is with the latter that the young entrepreneurs – who could be dealers or fitment centres, for example – are involved. The company provides training, mentorship, funding, and business and personal development to these start-ups. Two needs analyses are done to identify in exactly what areas the business needs help, and where any shortcomings might lie.

‘Based on this, we focus on the internal environment of the business, such as the manpower, markets, assets, competencies, HR and finances, sales and marketing and so on,’ says Myburgh. ‘We then focus on the external environment, such as the micros and macros, culture, customers and public perception of the company. We also test the legal compliance because often they don’t have the knowledge to handle the legal stuff on their own. For us, the issue is that it must be a holistic approach. You’re not just doing it for the sake of doing it. It needs to benefit all the parties and be holistic.’

With regard to what is most needed to better equip SA youths with the skills and tools needed to pursue entrepreneurship as a viable future, Nash Carter says there is a serious lack of angel funding. ‘We run into a lot of young people and they come up with great ideas, but there’s not a lot of seed money to test and vet out those ideas,’ she says.

‘That very early stage capital, which in some instances could be $50 000 or less, can be hard to come by. So there is a definite need for more at that level.’

Naidoo and Myburgh agree that formal training is severely lacking.

‘We need to introduce entrepreneurship into the curriculum at schools and universities, driving financial acumen,’ says Naidoo. ‘Entrepreneurship shouldn’t be a last resort. We need high-growth entrepreneurs, innovation entrepreneurs. So we need to start putting strong building blocks and foundations in place now to enable them to build successful businesses. Incubators and accelerators should be doing exactly this – developing entrepreneurs to solve specific challenges.’

Ponnan echoes this sentiment. ‘We need to build this culture in South Africa that entrepreneurship can start way before adulthood. The entrepreneurship option should be made available to the youth,’ he says. ‘With the right support and using minimal start-up funds, we can encourage our youths to start driving their own vision.’

By Toni Muir
Image: Masterfile/Greatstock