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Top tips for Entrepreneurship Month

18 November 2020 Jason Mellow, Head of Business Insurance at MiWay

November is Entrepreneurship Month, presenting a great opportunity to end the year well and position your business for 2021.

In one of his weekly newsletters, President Cyril Ramaphosa lauded a “new breed of young entrepreneurs” who had responded to the challenges posed by lockdown. He called them the “silver lining to the dark COVID-19 cloud”, a sign that even in the country’s “darkest hour”, they were the beacons of hope and renewal.[1]

From the National Development Plan onwards, entrepreneurs have consistently been touted by government as the engine that will drive inclusive economic growth. This year’s Entrepreneurship Month is doubly important because SMEs were particularly hard-hit by the economic disruption caused by the COVID-19 lockdowns.

A cause for concern is that although entrepreneurs are seen as crucial to South Africa’s economy, our SMMEs don’t perform well in relation to other markets. According to research by the Small Business Institute, 75% of new SMMEs in South Africa are not sustainable and fail [2] . Too many of them remain micro-enterprises and do not create nearly as many jobs as formal or medium-sized enterprises do. Common causes for SMME failure include poor cash flow management, a failure to develop and implement a strategic vision, and a lack of skills.

MiWay’s top tips for entrepreneurs should help position your business for sustainable growth:

• Manage your risk. As the lockdowns taught us all over again, risk comes in many shapes and forms and being prepared is essential. There is no doubt that we are not over the hump yet, so perhaps the first order of the day should be to revisit your risk assessment and take appropriate mitigation action. Insurance is one of the best ways to protect against the unexpected and SMEs should give thought to which broker or insurer they should work with and develop a good relationship with them. Financial risk, particularly with regards to cash flow, also should be top of mind – consult with an expert, if necessary, to help put robust plans in place.
• Use technology to your advantage. Technology is the SME’s secret weapon. Understand how to use it to access specialist help, reduce costs and increase efficiencies. Pay particular attention to mobile technologies as the bulk of South Africans access the digital world via mobile devices. Digital platforms offer a low-cost way to communicate with customers and potential customers, the lifeblood of any business.
• Focus on marketing. Marketing is vital in growing the business. Use the end of the year as a time to update your marketing materials and make sure they are current. If you have achieved any certifications in the last year, make sure they are listed on your website and all stationery (real and virtual). Make sure that all your satisfied customers have given you a reference and make sure it is spread far and wide on social media.
• Get ready for the holiday season and Black Friday. The end of the year is traditionally a time for increased sales and economic activity. Black Friday falls officially on 27 November this year, so if your business is going to be selling, be cautious as criminals use the heightened activity as a smokescreen to pilfer. Take security measures if you expect to hold large amounts of cash on site. Just like any consumer, entrepreneurs should be particularly cautious when it comes to taking advantage of Black Friday specials to acquire items for their businesses. Don’t be tempted to buy equipment just because it is being offered at a good price.
• Build your ecosystem. Building a community of other companies that complement your own service offering makes good sense. The end of the year is a great time to review your ecosystem and decide where the gaps are. If funds permit, why not send a small gift to particularly important companies or individuals you want to keep close?
• Close off the current year properly. In between preparing for the holiday season, take the time to finish the year in an orderly manner – more important than ever after the year we have had. Review successes and failures and make sure to recognise the high achievers on your staff.

You may be counting the days until the end of a year we would all rather forget – but make sure that what you do between now and 31 December sets you up for success in 2021.

MiWay is a licensed non-life insurer and Financial Services Provider (FSP 33970).

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