From incubation to the very end

JOHANNESBURG - One of my April columns concerned the high failure rate of SMMEs and gave some of the reasons why small enterprises are unable to thrive.

The column went on to talk about some of the developmental programmes available to entrepreneurs and SMMEs and also touched on the role of Proudly South African in opening doors and providing access to market opportunities (exclusively for member companies), once they are up and running.

Business Report later published a response by Karabo Mashugane, who wrote that the cart was being put before the horse. He said that it should be our role to identify the markets first and then to capacitate businesses to meet demand. “Without a clear market opportunity directing development interventions, we have a confused mess,” he wrote.

While I agree with that, I would just comment that it is not Proudly SA’s role to prepare businesses to be market-ready – our mandate is to promote buying locally to create jobs, and to match local supply with demand at consumer, business and public sector levels. However, I do believe that the role of incubation programmes is important in the journey of SMMEs if they are managed properly and if their approach is well thought out.

The title of this piece is a quote from Gauteng Finance MEC Barbara Creecy, who spoke at a recent Public Sector Procurement Forum which we hosted just over a week ago in Joburg.

I am certain that she and Karabo Mashugane are in the same WhatsApp group, as she spoke of the existence of directionless programmes and how detrimental, rather than beneficial, some of these programmes can be to small enterprises. MEC Creecy maintained that incubation programmes should have a curriculum (well she was formerly the MEC for Education, so it makes sense that she would use that analogy!) Like children, SMMEs need to be raised to be independent and not rely on the protection of the incubation programme to keep them going.

In the context of the forum, she was also making the point that small businesses cannot live and survive on government tenders alone and that they should eventually be encouraged to go it alone in the big wide world of commerce. In fact, she was more firm than that. She is from the school of tough love (“more tough than love” as she put it) and asserted that the only way to make an enterprise independent and viable is to cut off its funding, or comfortable source of revenue and make it sink or swim. She likened it to stopping an offspring’s allowance, thereby forcing them to go out and get a job and fly the nest!

In speaking to some of the incubation programmes whose entrepreneurs we have inducted into the Proudly South African programme, it is apparent that the next big idea doesn’t always translate into a good business model. Innovation alone doesn’t equal success and different entrepreneurs need different inputs to achieve the success their ideas deserve.

Our role, then, as Proudly South African is to concentrate on access to market for those companies that come through the various incubation programmes, that qualify for Proudly SA membership and that have dealt with all the other critical areas of their business model. There are some good examples of incubators becoming the customers of companies in whose development they have assisted.

These include Sasol, whose Sasolburg ED programme incubates SMME suppliers.

Proudly SA in turn assists these enterprises to find other customers looking to buy from local SMMEs, thereby contributing meaningfully not just to the development but also to the sustained growth of these small businesses. We are here to assist incubation programmes with markets, as we strive to contribute to the SA economy through procurement from local producers and service providers.

So, if we were to help incubators write the curriculum which MEC Creecy suggested, what modules should be included? We have tried to cover some of these in our last two Buy Local Summits where we host, together with some of these ED/Incubation Programmes, a day dedicated to entrepreneurs. We have included talks on everything from IP protection to dressing for success, branding and packaging tips, using pop-up markets and festivals to establish a brand, how to break into corporate markets, as well as information on traditional funding sources.

We also take our summit in the form of smaller business forums on the road nationally and have just embarked on our provincial road shows. If you would like to give inputs on what we should be covering, and/or what our incubators should include in their so-called curriculums, we would love to hear from you. (deryn@proudlysa.co.za )

Time for my song – and some say earworm – for the week. It’s Lira’s rendition of the Labi Siffre classic Something Inside so strong, but it’s the lyric Knowing I can make it, though you are doing me wrong, so wrong that came to mind in relation to this week’s column.

Join the Buy Local Movement! Visit www.proudlysa.co.za

Eustace Mashimbye is the chief executive of Proudly South African.

The views expressed here are not necessarily those of Independent Media.