BY NABELAH FREDERICKS

A NATIONAL debate in the small business community has flared up following the announcement last month by African National Congress (ANC) secretary-general Gwede Mantashe that a small business ministry might be introduced after the elections.

Khusela Sangoni, ANC spokeswoman, says Mantashe does not want to comment on the matter at this stage because the proposal for the ministry is still being debated within the ruling party.

We realise the importance of the small business sector and that there is a need to place more focus on this sector because they are the engine of growth of this economy, but at this stage it is an internal debate within the ANC, says Sangoni. Matashe made the announcement at a recent South African Chamber of Commerce (Sacci) event.

Sacci chief executive Neren Rau, who was present at the event, says several challenges faced by small business owners were discussed with Mantashe which culminated in the announcement.

We will support a ministry that will enable small businesses. If the sole purpose of the ministry is to develop and support small businesses we will welcome that."

However, he says there is still a lot of uncertainty on the purpose of the ministry.

We will not be excited if the ministry was just another regulatory institution that will add more red tape, says Rau.

Should this ministry come into being, business associations Small Business Connect spoke to, say they would like to see issues affecting small businesses receive

closer attention, including access to finance, a standard definition of small enterprises and a standard set of exemption criteria.

Mantashes announcement was welcomed by the Black Business Council (BBC) who have been campaigning for small businesses to have their own ministry.

Sandile Zungu, spokesperson for the BBC, applauds the announcement saying the ministry will provide small business owners with a "home".

We have no reason to believe that this will not happen. We are pleased that such a commitment has been made from the secretary general, says Zungu.

He says small business owners will now know exactly which door to go to.

"Previously they only had a voice, which was not always heard, but now there will be a standalone ministry for small businesses.

Ideally the person heading up this ministry should be someone with a passion and history in being an activist for small businesses, says Zungu.

Matsi Modise, national executive director for the South African Black Entrepreneurs Forum agrees with Zungu.

The minister does not necessarily need to have been an entrepreneur, but he or she should have a stronghold of people who have run a business or have been involved in business support organisations.

There should be a voice for entrepreneurs so that we can engage with those in government who implement policies, says Modise.

She says she remains wary that such a ministry would add to the red tape already burdening business owners.

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Edition 9May 2014

HElping you run a bEttEr businEss www.smallbusinessConnect.co.za

Small biz to get new 'home'?

Small Business Connect spoke to business owners on the possible creation of the ministry.

Rasheed Hargey, owner of sensor technology business Uzazi Technology, says that the ministry should have been set up years ago.

I think it is absolutely excellent

to have a dedicated ministry that will provide small business owners with enhanced support and I think that this will stimulate job creation, says Hargey.

However, Yolisa Molefe, who owns Siyahluma Nathi Consultants, says until more

details are released she is staying cautiously optimistic.

I am not sure whether this is a good idea," says Molefe.What do you say? Should there

be a Small Business Ministry? Go to www.SmallBusinessConnect.co.za/Opinion to have your say.

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get help subsidising your business trips Page 2

Free internet zones could be rolled out nationally Page 5

new fund launched for franchisees Page 14

Domestic worker turned award-winning entrepreneur...

the only dusting lindiwe shibambo, owner of domestic worker placement agency Maid4u, now does is of the awards in her trophy cabinet. since starting her business in 2008, shibambo has won several awards. read more about her story on page 7.

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Winds of changeWITH elections happening this month and the possible creation of a ministry for small businesses, change seems to be in the air for the small business sector.

Whether these changes will be to the advancement of small business owners or tie them up in more red tape, remains to be seen. Those in the industry, seem both apprehensive that the ministry could add to the red tape and also hopeful that the ministry would introduce more policies that favour small business development.

Business owner Yolisa Molefe says, I am not sure whether this is a good idea. If there is too much focus on small businesses the incentives might result in small business owners wanting to stay small just to access these incentives and not grow.

While Rasheed Hargey, owner of censor technology business Uzazi Technology, thinks that this should have been done years ago. Read more about this story on our front page.

Staying on the subject of change, we are also trying to provide our readers with a better product. This is one of the main reasons we ran a reader survey last month. Our reader survey feedback via Facebook included some of the following comments from you:

Jonas Moisi - You do a wonderful job. Your newspaper will help to grow my business. I wish you the best.

Anam Xinwa - Id give your business five stars (out of seven). Your paper is very informative and helps my business.

We have also started the Small Business Connect Reader of the Month section. Check out our inaugural Readers of the Month - Simpiwe Malotana and Aubrey Dolweni, founders of Obsido Interiors on page 20.

You too can feature here. All you need to do is send an email to Newsdesk@Small BusinessConnect.co.za with a photograph of yourself bigger than one megabyte, a short write-up on your business and how reading Small Business Connect assists your business.

Alternatively, connect with us on Facebook. At the time of going to press, we had 975 likes on our Facebook page, www.facebook.com/SASBconnect. Share our page with your Facebook friends and help us reach a milestone of 1000 likes!

Nabelah FredericksNews EditorSmall Business Connect

Hotline assists thousandsBY VUYO MABANDLA

MORE than 1 200 business owners have already been assisted in receiving payments amounting to R357 million for government contracts thanks to the Small, Medium and Micro Enterprise (SMME) Payment Assistance Hotline.

Business owners can use the hotline to apply for help in being paid timeously for doing business with the government.

The initiative forms a part of efforts by the government to reduce red tape.

Since its launch in 2009 the hotline has received over 20 000 calls from aggrieved business owners looking to settle payment processes with various government departments and agencies.

Manthule Ngoasheng, the SMME Payment Assistance Hotline national project manager, says that so far at least 12 000 of these claims were legitimate non-payment claims.

The hotline includes email and fax application processes to make it easier for businesses to apply for help.

The Small Enterprise Development Agency (Seda), which operates the hotline, is mandated to implement government's small business strategy through providing business support to the sector.

Says Beverly Kgame, Sedas corporate communications officer: Complainants must have had a service or product that they have sold to the government in exchange for cash."

Proof of services rendered to the state must also be included in the application form which can be downloaded from Sedas website (www.seda.org.za).

This is to help ensure that claims are valid.

Kgame says that this also helps minimise fraud and maladministration by businesses. Through the hotline, payment processes can be sped up, allowing businesses to pay their staff, running costs and other expenses on time. The plan was to ensure the persistence of job creation, save more jobs and grow the economy further, says Kgame.

However, it was important to note that invoices cannot be processed if a job has not been completed unless otherwise agreed.

To lodge complaints and other queries relating to non-payment for services or products sold to

government, businesses can call the hotlines call centre between 6 am and 6 pm on weekdays.

At the time of writing, some 197 applications by small businesses for an amount totalling R180 million were still being processed.

Says Ngoashe: The process has also enabled Seda to identify some of the areas where small business owners need help, including administrative weaknesses, such as putting incorrect details on the invoice and wrong order numbers or invoice numbers.

A campaign aimed at educating small enterprises on how the service works is in the pipeline and will focus on which documentation is required and the processes involved.Go to www.seda-smme.co.za

for more information.

Entrepreneurs can use the Seda hotline to ensure a more efficient payment process for government contracts.

NEWS

Medo to help subsidise business tripsBY NABELAH FREDERICKS

FOLLOWING the launch of the National Trade Programme (NTP), selected business owners from across the country now stand a chance to attend the Smart Procurement World Conference to be held in Johannesburg in September.

The NTP was launched by the Micro Enterprise Development Organisation (Medo), a business support organisation that connects businesses with an annual turnover of more than R35 million with emerging small and micro-enterprises with an annual turnover of less than R5 million.

In addition to business linkages, Medo also launched an information, communications and technology (ICT) incubator late last year.

The ICT incubator was the first youth incubator in the Department of Trade and Industrys (DTI) stable of incubators under its Incubator Support Programme, which was launched in 2012.

According to Judy Sandrock, Medos CEO, the NTP will run throughout the year and seeks to assist local young entrepreneurs with opportunities to conduct business nationally by subsidising their travel and

accommodation costs.The goals of this programme

are to encourage small businesses to trade outside their cities of origin and to remove the barriers to trade, which usually relate to the cost of business travel to prospect and close sales, says Sandrock.

The NTP, a supplier development programme, is funded through sponsors from the private sector; in turn, these will earn full supplier development credits.

The first sponsors were Tsogo Sun for accommodation and

Comair for air travel of business owners who attended the inaugural Smart Procurement World conference held in Cape Town in March.

The programme subsidised business owners Victor Mazibuko, the owner of MCC VIC Trading, Raphael Mohlala of Phakamo Holdings, Nhlanhla Mthembu of Bizdev Concepts, Sechaba Ngwenya of Creditable, and Josias Motsoeneng of AC Electromech Maintenance Services.For more information, go to

www.medo.co.za or call 010 500 5000.

Programme beneficiary Nhlanhla Mthembu of Bizdev Concepts

some 1 200 business owners

have already been assisted

www.smallbusinessConnect.co.za May 2014 - page 3

More space at Cape incubatorBY NABELAH FREDERICKS

LAST month saw the relaunch of Shanduka Black Umbrellas (SBU) Cape Town office that will now provide incubation support for up to 50 small business owners.

The relaunch also co-incided with the business incubators regional awards evening and graduation ceremony which was attended by government ministers as well as representatives from big business and small business owners.

Mogamat Reza Galant, enterprise development manager at SBUs Cape Town office, says the relaunch was held to celebrate the organisations new office space which will allow for an additional 20 startups to be accommodated at the business incubator.

Startup business owners are welcome to apply for these spaces which are still available. They can go onto our website or come to our offices for orientation, says Galant.

He adds that orientation sessions take place every Wednesday where business owners can workshop their business ideas with the incubator.

Galant says the most important thing the organisation looks for in business owners is whether they have passion, commitment and drive.

They also check whether applicants have a clear goal of where they want to go.

We can take you to success, but we need you to be active every step of the way, he points out.

The qualities Galant mentions

were all evident in the award- winners, particularly in Madambi Rambuda, owner of Roswika Media, who took top honours on the night when he graduated from the incubation programme.

Rambuda, who was presented

with the Best Performing Company award and Most Jobs Created award, says he started his business while studying at the University of Cape Town.

He jokes that while the rest of his peers were trying to get into

politics he was trying to become a millionaire.

On accepting the Most Jobs Created award, Rambuda says, I initially planned to make money alone, but SBU showed me that I could employ people and share my wealth.

On a more serious note, he added that although on paper it reflects that he created five jobs, in reality the number is around 30.

This is because he also employs university students on a part-time basis.

Business partners Zubair and Wardah Bester, owners of The HR Mac, clinched the Best SBU Ambassador award and the third place for the Most Jobs Created.

Thank you to SBU for making it possible to achieve my dream. The big word here is collaborate. This is what has brought our turnover to R300 000, says Zubair.

Other winners on the night were Just Amber Medias Peter Stoffberg, Siyahluma Nathi Consultants Yolisa Molefe, Nirabritz Nature Guides and Tours Billy Magan and F-Khiva Consultings Fikile Khiva.

SBUs regional manager Donovan Goliath described the decision-making process for the awards as a tough battle and added that because of the good calibre of businesses vying for an award the adjudicators were splitting hairs to make sure the adjudication process was a fair one.

Regional winners from Cape Town, Johannesburg, Pretoria and Durban will now be entered for the organisations national awards which take place in June. For more information on

business support, go to www.shandukablackumbrellas.org

Tax ombud ready to resolve complaintsBY YOLANDE STANDER

IF early indications are anything to go by, South Africas new tax ombudsman is going to have his hands full.

Although only officially launched by finance minister Pravin Gordhan last month, the office of the South African tax ombud has been at work since October last year. It has since been approached by more than 670 taxpayers for assistance.

This includes not only complaints, but also questions about the process of lodging a complaint and other related un-certainties, explains tax ombud chief executive Eric Mkhawane.

At the helm of the ombuds office is retired judge Bernard Ngoepe who, along with a team of experts, is dealing with legitimate complaints by taxpayers.

This includes any grievances relating to administrative issues, poor service and procedural matters that cannot be resolved through the South African Revenue Services (Sars) usual internal mechanisms.

The ombuds office also facilitates access to a complaint resolution process and guides taxpayers according to the process that needs to be followed.

The tax ombud may, however,

not address any legislative or policy issues.

Says Mkhawane: We cannot get involved in matters before court. Of the 673 queries we received, 61 fell within our mandate and we were able to finalise 70% of them. The remaining complaints are still within our turnaround timeframe and we are in the process of finalising them.

He says the ombuds office aims to deal with a complaint within 15 days upon receiving the necessary supporting documentation.

There are however situations where this period is not sufficient, but we will inform the taxpayers when this is the case and provide them with regular feedback about the process, says Mkhwanane.

To date, taxpayers who have made use of the ombuds services include individual taxpayers as well as business owners. The complaints cover a wide range of issues from not having received tax refunds to the correct Sars processes not having been followed.

Spokeswoman for the National Treasury, Phumza Macanda, says taxpayers can lodge a complaint with the tax ombud once they have followed Sarss complaint procedures, which includes first

contacting Sars directly through a branch or through the Sars contact centre.

If the desired outcome is not reached, the matter should then be escalated to the Sars Service Monitoring Office, says Macanda.

However, Mkhwanane says there are some cases with compelling circumstances that allow taxpayers to contact the ombuds office directly before going through these processes. This will only be in case of an

emergency when time is of the essence and going through the internal process first could negatively impact the taxpayer, he points out.

The first step to lodging a complaint is to supply the tax ombuds office with the necessary supporting documents.

Those business owners interested in lodging a complaint with the ombud need to fill in a complaint form, which can either be found on the tax ombuds website, or which can be faxed or sent via email on request.

As well as the necessary supporting documentation, com-plainants must also provide their contact details and information on the complaint.

Mkhawane believes that now that the tax ombud has officially been launched, the number of complaints will increase.

"Recently Judge Ngoepe was interviewed on a radio and soon afterwards, we saw a spike in complaints.

The more people know about the service, the more they will make use of it," says Mkhawane.Go to www.taxombud.gov.za

or call 080 066 2837 to lodge a complaint with the tax ombud or email ssmo@sars.gov.za to reach the Sars Service Monitoring Office.

NEWS

shanduka black umbrella's Western Cape regional manager donovan goliath with provincial minister alan Winde, top award-winner Madambi rambuda and Shanduka Black Umbrella's chief executive officer, Mark Frankel

bernard ngoepe

page 4 - May 2014 sMall businEss ConnECt

Good lessons from ChileBY STEPHEN TIMM

INNOVATION is key. Thats what South Africa can learn from Chile, where something of an entrepreneurship revolution is on the go.

In recent years the South American nation of 17 million has captured the attention of many with its Start-Up Chile programme.

Launched in 2010, it offers entrepreneurs from around the world grants of $40 000 (R415 000), to set up in Chile for one year. Since 2011 the programme has also opened its doors to Chilean participants.

Through the programme the Chilean government aims to convert Chile into a hub for entrepreneurship and innovation.

Up to the end of last year, the programme had received 10 500 applications from 112 countries, with 974 startups having taken part so far.

Although it is not yet clear how successful the programme has been in creating successful local startups, it has been invaluable in attracting significant interest to the country and getting Chileans to focus more on entrepreneurship.

Two years ago, the capital, Santiago, was listed as one of 20 top startup eco-systems in the 2012 Startup Ecosystem Report.

Other countries have also launched programmes to incentivise high-impact entrepreneurs. This has spawned among others Start-up America and Start-up Brazil.

Even before the programme began, change has been brewing in Chile, driven by a growing economy and declining poverty. Entrepreneurship has bloomed.

Where, in 2006, a similar percentage of Chilean adults were involved in startups as South African adults are today (10% of adults), last year almost a quarter of all Chileans were involved in starting a business.

In all 80% (versus 67% of South Africans) start a firm out of opportunity, rather than necessity, according to the countrys 2012 Gem report.

Like South Africans most are young, averaging 37 years.

However, unlike their counterparts, they are more educated about a quarter of those starting out are professionals with college graduate degrees, which often means they have better networks and aspirations, notes the report.

Added to this, more adult Chileans than South Africans believe they will employ 20 or more people over the next five years 3% of Chileans versus 1.1% of South Africans, according to figures from the latest Gem 2013 Global Report, released in January.

Its clear that a massive entrepreneurial drive is on the go in Chile, backed by a number of

pro-entrepreneurial policies such as seed-funding, venture capital and incubators (most of them linked with universities) to assist high-growth entrepreneurs with new ideas.

Key also has been partnerships. Through private-sector contributions Corfo, the Chilean governments development agency, was able to treble available funds to lend to and assist business owners, and reach almost three times more beneficiaries in 2013 than in 2009.

The focus on innovation has also led to various improvements.

Last year the Chilean government launched an online portal which allows business owners to register a business in just one day, cutting Chiles

registration time from the present five days.

Chile has also enacted easier measures to allow for easier liquidation proceedings when closing a business.

One of South Africas biggest challenges is its business failure rate which remains one of the highest.

This points to why South Africa has such a low number of adults running businesses older than three and a half years (Gems definition for established firms). Just 2.9% of adults in South Africans run established firms, compared to 8% of Chileans.

In South Africa just one fifth of business owners operate established firms in Chile the figure is a little better at a quarter,

but still below the average of 36% for emerging economies.

A key shortfall cited by experts in last years Gem report is the lack of research and development transfer among small businesses in South Africa.

South Africa doesnt have enough entrepreneurs with new ideas for products and services.

If they are to survive and thrive business owners must become more innovative by offering a new product or service that will help solve any one of a number of pressing problems in society.

In this, a better education system as well as faster and cheaper internet would also help, as would better linkages between universities, industry and the government.

There are signs that things are improving. The number of university enrolments have doubled since 1994, and although far from satisfactory, the education system has made small improvements, as demonstrated by the recent Annual National Assessments.

The government and private sector have also begun setting up incubators at universities and colleges.

Yet more needs to be done to inculcate innovation into everything the country does.

Like this South Africa will be better positioned to offer world-class products to meet global demand. Neglecting to do so will leave the door open for others like Chile to step in.

South African global support office opens for businessBY NABELAH FREDERICKS

SMALL business owners will soon be able to leverage off the expertise of their overseas counterparts after the International Society for Small and Medium Enterprises (Issme) set up shop in South Africa earlier this year.

Issme, which began operating in South Africa in March, aims to assist institutions that help small businesses and to develop a global association of business owners.

Moses Mwanjirah, the country representative of Issme for South Africa, says the organisation was set up in 2010 with the belief that all small businesses around the world face similar challenges.

The first office was opened in India, with more offices having since been added in other countries.

We realised that small business owners need to speak the same language and that everyone in the sector needs to

work together, says Mwanjirah.He says the aim in South

Africa is to create and provide a platform for small business owners where everyone in the sector works together.

Mwanjirah says he is already in talks with various government

departments and small business associations to form partnerships.

He believes that the challenges faced by small business owners in the country can be addressed through working together.

Another key issue his office is working on is addressing challenges

facing the informal sector.I feel that this sector is

not receiving enough attention and therefore I am working on creating partnerships to address these issues, says Mwanjirah.

Plans are also in the pipeline for Durban to host the fourth Small Business World Summit next year as well as to host the World Small Business Awards.

As the South African Issme office becomes more established, training and networking programmes will also be made available to business owners.

Currently we are in talks and setting up round tables with business associations and business owners in Gauteng.

We have already had one in the Western Cape late last year before we officially launched and another will take place in Durban, says Mwanjirah.Contact Moses Mwanjirah on

mmwanjirah@issme.org or call 072 263 8427 for more information.

WORLD

More innovation is needed in south africa in order to meet the global demand for world-class products.

ISSME was first established in India and has now spread globally.

www.smallbusinessConnect.co.za May 2014 - page 5

Coega helps businesses upgrade status BY MAX MATAVIRE

THE Coega Development Corporation (CDC) has already invested over R450 000 in a recently launched business support programme aimed at small businesses.

The programme, which is being co-ordinated by the CDCs small business development unit and is called the Broad-Based Black Economic Empowerment (BBBEE) Level One Certification, assists selected small businesses in the CDC database by helping them to get certification on a higher BEE level.

Helping small businesses improve their BBBEE scorecards enables them to compete favourably in tender bidding.

Recently, 100 small businesses in various sectors ranging from construction to events management were upgraded from Level Four to Level One.

About 80% of these companies came from the Nelson Mandela Bay region.

However, the programme caters for all small businesses from the Eastern Cape province as a whole.

Participants are randomly selected from the CDC small business database, and participation is free.

Participating small businesses are trained in financial management, governance, decision-making and various other aspects of business management.

CDCs small business development unit head, Andile

Ntloko, says: When you bid for a state tender, you bid on price and empowerment. Empowerment indicates your BBBEE status.

We have shown small black-owned businesses how they can realise their potential and move to

Level One status to competitively bid for work both on price and empowerment.

Ntloko says of the 100 participating companies, 65% were owned by black women.

The Nelson Mandela Bay

Municipality councillor responsible for economic development, Babalwa Lobishe, who officiated at the certification function, says the programme gives small businesses the competitive edge, which is required by various industries that small businesses are involved in.

We can turn around our city to become a much better place. The economy is growing and Coega, in partnership with our municipality, is going the extra mile to ensure that we attract investment, says Lobishe.

Participating business owner Ntombekhaya Gunuza, who owns Shadow Bricks, which has branches in Mthatha and East London, says her company had been stuck at Level Three for ages.

This is great. I did not think my company would be upgraded to Level One. This will now open doors for my business. As small businesses, we are the backbone of South Africas economy and the future job creators, says Gunuza, whose company employs 60 people.

She says the construction industry is tough worse still when one is a woman, but with this new status, I will take men in the industry head-on.

Another participant, Claire Kivedo, who co-owns Overall Events, says the new Level One status would make her business even more sustainable.

I did not realise that the work I am doing, along with giving back to my community, could help boost my companys BEE level. It is nice to know that hard work pays and is rewarded, says Kivedo.

Wani Toyana, the owner of Otjiwarongo Projects, a bulk vegetation and landscaping company, says: The upgrading of my companys BEE status means better opportunities in future and more jobs."

Free internet zones to be rolled out for public spacesBY VUYO MABANDLA

BUSINESS owners may soon be able to access free internet following the rollout of pilot projects in Gauteng late last year and more recently in the Western Cape.

The free Wi-Fi pilot projects, first launched in Pretoria, already provide free internet access to about 24 000 people, says Tim Human, project manager at Stellenbosch-based non-govern-ment organisation, Project Isizwe.

The projects aim is encapsulated in its slogan Free Wi-Fi for Africa. The organisation seeks to provide free Wi-Fi access to those across the country in low-income areas by assisting local, district and provincial government in their plan to rollout and maintain free Wi-Fi networks.

A free Wi-Fi network node at a public access point is known as a Free Internet Zone (FIZ), where any user can get free and immediate access without needing a password to login.

Says Human: At the moment, we work with local government municipalities to rollout our free internet zones, so we will cover municipalities and provinces in a piece-meal fashion as agreements are put in place. There is no set plan for a national rollout as yet.

Already eight FIZ will be rolled out at eight low-income schools in the Western Cape, with four each in Atlantis and

Robertson by July this year, also catering for numerous aspiring and growing businesses in the areas, he adds.

This follows the organisations successful application to assist the government in its efforts to take free Wi-Fi to the provinces poor communities, with already over 20 000 people expected to benefit.

The Western Capes pilot reach has been impressive, theres been a lot of wireless activity since the projects launch.

Human points out that his organisations non-profit structure allows it to source bandwidth and

local installers without the traditional excessive mark-ups. We facilitate an end-to-end service to benefit communities through education, economic development and social inclusion, he explains.

An anonymous online survey on the organisations website on the free connection reveals that the project brings convenience to the daily work routines to those it reaches.

Users responded by saying the service helps them to stay up to date, communicate with people and access work related e-mails, while some users use it for work purposes such as email.

Human says the first phase of the Pretoria project is already in operation, with five Wi-Fi spots around Tshwane North College, Mamelodi Community Centre and Church Square in the Pretoria CBD.

The second phase of the pilot project is expected to be launched in July this year.

To benefit from the offering business owners need only to have a wireless connection via a laptop, cellphone or a custom-made device to tap into the free connections.

However, users will be governed by a fair usage policy. This means that each user's internet access will be capped to 250 megabytes per device per day at an average speed of one megabyte download.

On-net content, which does not require breakout to the internet, has unlimited usage to users.

Network security will be put in place to prevent user abuse of the service and access to prohibited websites.

Although a national rollout is not yet on the cards, the second phase of the initiative is expected to see a further 213 free internet zones rolled out in Soshanguve, Mamelodi and Atteridgeville.

These public spaces could be around schools, universities, libraries, sports clubs, community centres and parks.Go to www.projectisizwe.org

for more information.

NEWS

Claire Kivedo of overall Events, Wani toyana of otjiwarongo projects and ntombekhaya gunuza of shadow bricks with Coega development Corporations andile ntloko.

Free internet zones have been launched in gauteng and the Western Cape.

page 6 - May 2014 sMall businEss ConnECtSUCCESS

Boys aged nine and eight open doors to innovation

BY LAURA CAPITO

A NINE-YEAR-OLD schoolboy and his eight-year-old friend recently won an international entrepreneurial award for creating a mobile application that shows how open data from local communities can be made available to everyone.

Much information is collected by governments to allow cities and towns to run smoothly.

This data is currently not available to citizens to use freely for easier and more practical living. But, thanks to the app developed by nine-year-old William Colglazier, it is hoped that similar creations will lead to the wider use of open data.

Colglazier, who now attends Reddam Preparatory School in Westlake, Cape Town, came up with the idea along with his friend, Alex Glidden (8), for the mobile app @Me-on-the-move while still living in the U.S.

Colglazier and Glidden received the award at the Data Day 2014 conference presented by Smart Cities, an initiative of Citadel-on-the-move in Ghent, Belgium in January 2014.

Citadel-on-the-move, which is funded by the European Commission, aims to use open data innovatively to benefit citizens.

Geert Mareels, ICT Manager for the Flemish eGovernment Authority and Citadel Project Coordinator, says: When we set out, we never dreamed that our tools would enable a nine-year-old to create an app that works across three continents. Let alone in five minutes!

Colglazier and Gliddens mobile app has information about events in Cape Town, South Africa, Holyoke and York in the U.S., Ghent in Belgium, and Athens in Greece.

The app has data on any events happening in towns or cities. It has information on sports events or parking spots you can use, Colglazier says.

The idea for the app grew from Colglazier having dinner with Glidden and his parents

one evening.Gliddens mother, Julia, works

for Smart Cities, Citadel and asked Colglazier if he would like to enter a competition where he could win money.

Colglazier explains how he went to the Massachusetts town hall with his mentor, Julia in Holyoke, to ask for their open data.

They had absolutely no idea what I was asking for and told me to go to their website.

I told them I need the open data in an Excel spreadsheet for me to be able to use it, says Colglazier.

Colglaziers mother, Melissa Murphy, says the app was created by using the open data to get the information and place it in a spreadsheet in order for the data to be manipulated.

The information cannot be used in any other format.

Colglazier then moved to Cape Town and continued his mission to

get open data for his mobile app. The Cape Town Tourism

Board were incredibly helpful and gave us all the information, termed as data sets that specify event information in Cape Town for the year, says Murphy.

This information was then used for the app.

The app can currently not be accessed for use, because the invention was entered into the competition and belongs to Citadel-on-the-move.

There was no cost involved in creating the app. Colglazier used one of the Citadel-on-the-move templates to create it.

For now, he plans to learn Afrikaans and to concentrate on his studies.

Perhaps this nine-year-olds creation will become a stepping stone for other entrepreurs.For information on how to useCitadelstoolsforanapp,gotowww.citadelonthemove.eu

Building a business one book at a time

BY VUYO MABANDLA

HEMIS Lacala is onto something good. Not only is he pursuing a great business idea, but he is also educating the nation at a fraction of the usual cost.

This he does through his online book store, eAfford, which helps university students save money by renting out academic textbooks at low prices.

As a Bachelor of Commerce student at the University of Pretoria last year, Lacala recalls how he and his friends would miss out on buying nice things because their money would be spent mostly on expensive books.

Lacala sees eAfford as the answer to avoid feeling ripped off every time one buys books from retail stores. A typical university textbook can cost anything between R400 and R700 at a bookstore.

Lacala decided to start a business that provides buyers with access to quality books at half the original price than if they were bought elsewhere.

The idea struck me when in 2011 I found myself often without study material, leisure money and sometimes even food. The business was started in August 2013 by a group of students to

help other students save their hard-earned cash to spend on whatever they like, he says.

Along with fellow students Sheyie Ogunboyale, a graphic designer, and Jarred Freedberg who majors in finance at the University of Cape Town, he put together a business model based on combining online technology with trading.

The resulting website www.e-afford.co.za lets users create a personal account online to place orders for books. The small enterprise operates under Dot Ingenious Web Solutions Pty (Ltd), owned by Lacala.

By simply indicating a books international standard book number (or ISBN), the authors name, or title, users can indicate how long they will keep the book before it is delivered.

The name eAfford is a contraction of the words virtualisation and affordability, based on the founders experience during our studies at university, says Lacala, who adds that the business has grown in the past few months.

Were getting attention from many people, with some interested in knowing how we thought up the idea, he says.

The business has attracted

over 100 frequent users to date, all vying to get their hands on some of the 10 000 books the business has to offer. To meet the growing demand, Lacala and his colleagues buy second-hand books from other students to increase their stock. They also source new titles from a local book supplier with whom they have an agreement with.

With 65% off on second-hand books and 50% off on new ones, eAfford is looking to sell a thousand books by the end of this years first university semester, with plans to collect 10 000 more by the end of 2014.

Ogunboyale designed the websites online application to help students plan and revise their class work. Freedberg, who manages the businesss cash

flow, says educated students are the future of South Africa. Says Freedberg: eAfford aims to help these students on their academic journey, moving our country forward together.

Lacala says he feels hes a social entrepreneur as the business is a springboard for an alternative, cheaper way of providing education.

They plan to use this year to partner with and seek incubation with successful information technology (IT) companies in order to get more advice and experience. They are also busy developing more online applications to help connect with clients across the country and start employing more people.Go to e-afford.co.za for more

information.

William Colglazier, nine, recently won a global award for his innovative mobile app @Me-on-the-move.

Hemis lacala of eafford is growing his business one book at a time.

"We never dreamt our tools would enable a nine-

year old to creat an app"

www.smallbusinessConnect.co.za May 2014 - page 7

From domestic worker to industry pioneer

BY NABELAH FREDERICKS

SINCE registering her business in 2008, a Gauteng businesswoman has created employment for more than 1 000 women through her domestic worker placement agency.

Its no surprise then that her business scooped the Most Jobs Created and Best Performing Company award at the Shanduka Black Umbrellas awards in early 2013 and, more recently, the top SMME award at the second annual South African Premier Business Awards. The latter is an initiative of the Department of Trade and Industry, Proudly South African and Brand SA to honour local small businesses.

Lindiwe Shibambo, says she entered the job market as a domestic worker, not out of choice, but because that was the only way she could earn money.

I needed money to study and I could cook and clean, says Shibambo. Years later she worked at a bank and was always asked by colleagues and customers to refer them to a reliable domestic worker who could clean and take care of children.

She says it was only when she had her child that she realised the difficulty people faced when trying to find a reliable person who could clean and take care of their children. In three years, she hired and fired 12 domestic workers.

It was this struggle that led to the business idea of a domestic worker placement agency and Maid4u was born.

Through Maid4u Shibambo recruits unemployed women in rural and poverty-stricken areas with little or no skills and uses her story as a former domestic worker to illustrate the success that can be built from humble beginnings.

She levies a fee of about R200 for placement. For those that cannot pay the fee an agreement is made to subtract this amount from their first wage. Training, which includes housekeeping and CPR, is provided free of charge. Wages from clients are paid directly to Maid4u, but very little goes towards the business.

Shibambo says she started Maid4u while still employed and only left her job when she was accepted into Shanduka Black Umbrellas business incubator programme.

I registered the business in 2008, but we only went operational in 2010. With 18 months experience working as a domestic worker I knew what the challenges were on both sides and could focus on creating the right environment for both the worker and the employer, says Shibambo.

Shibambo explains that she has a strict screening process in place, where all the necessary

checks are carried out regarding personality, maturity, discipline, checking for criminal records, identity documents among others.

She also approached the Department of Labour to assist her with learning more about employment guidelines so that she could ensure the rights of both her workers and their employers were protected.

A graduate of the Goldman Sachs 10 000 Women in Business programme run by the Gordon

Institute of Business, Shibambo says her business has really taken off since she started.

I am trying to contain it because I dont have the capacity and need some funding, she says of her businesss growth spurt.

Shibambo says the awards that she has received have reenergised her and she plans to continue to do what she has been doing even though her revenue remains small.Go to www.maid4u.co.za for

more information.

07907 Bizspark Collateral - A4 Advert_FINAL_Paths_nc.indd 1 2013/09/13 4:19 PM

SUCCESS

Maid4u's lindiwe shibambo, centre, with colleague at the sapba awards.

page 8 - May 2014 SMALL BUSINESS CONNECT

Only one password to rememberBY MARCEL OUDEJANS

WHETHER youre checking your bank account online, opening your webmail, logging in to your computer, or simply unlocking your smartphone, youll need to remember a password.

In the past, you could get away with remembering one password for every website or account. With the increase in online fraud and

hacking, thats asking for trouble. It would be very easy

for a dishonourable person to take control of your data, banking and online identity if he learnt that single password. Its long been highly recommended that you do not use passwords (or pin codes) that are birth dates, telephone numbers, names, or anything that could easily be guessed.

Thats why online security experts suggest that you create a unique password for every single account. This password should ideally comprise of at least eight characters, and include lower-case and upper-case characters, numerals and punctuation. Imagine having to remember complex passwords like that!

Unfortunately, writing down passwords or keeping them in

unsecured text files is also a severe security risk and you run the risk of being locked out of your accounts if you lose your password to your laptop of a file.

As a result, several applications have been developed to help with password management, such as KeePass (www.keepass.info) and 1Password (www.agilewebsolutions.com/products/ 1Password).

However, the solution that I use and recommend is LastPass (www.lastpass.com) because it has what I consider to be the best features, offers peace of mind, and is highly regarded by experts and reviewers.

In addition, the free version is quite suitable for the majority of users (although I personally think the premium subscription is well worth the money).

Here are some of LastPasss key features:

You only need to remember one password your master password in order to access and use all your other usernames and passwords. This single password must be complex but thats the last pass youll need to remember!

The software can generate and save a complex unique password for every new account, and you wont need to remember it. LastPass will automatically create a new account profile and login the next time you visit that website or app.

Your passwords are saved in a super secure vault that cannot be hacked. No one else will ever have access to your passwords because the service offers extremely secure, paranoid-level security.

You will be able to access your vault from any online computer because your vault is saved in the cloud.

LastPass can do an audit of your passwords to warn you if your password is easy to guess, is frequently used by other people, or if you use the same password on another website.

Because LastPass can generate and save a new unique password, it makes it extremely easy to save a better password on your accounts.

LastPass also offers multi-factor authentication (like a one-time pin, better known as OTP from your bank) as an extra layer of security.

The Premium service is very affordable (about R130 per year) and offers even more useful features, including mobile app access.

LastPass is perfect for personal use, but they also offer an enterprise version that manages employee passwords and helps you to protect company data.

Personally, LastPass has changed how I protect my online data so much that I have installed it on every family members computer even my mother-in-laws! Visit this link www.lastpass.

com/f?3190276 if youd like to receive one month free use of LastPass Premium.

Marcel Oudejans is an entertainer, keynote speaker and soft skills trainer. Visit www.workplaylife.co.za for more advice on balancing work and play.

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www.SmallBusinessConnect.co.za May 2014 - page 9ADVICE

Cover your risks to prevent ruinin your business

BY YOLANDE STANDER

TOO often, one reads of businesses burning down, being robbed or countless other unforeseen losses that could lead a small business to ruin if it does not have the right insurance cover.

Making sound decisions about insurance cover during the infancy stages of a business is key to protecting it against unforeseen losses that most startups find unable to absorb.

So say specialists in the insurance sector and small business owners.

The reason that startups skimp on insurance is because they generally have less capital and free cash flow to absorb such losses, and will be unable to continue to operate when impacted by a loss, says Standard Banks head of small enterprise, Ravi Govender.

Mutual & Federal commercial, distribution and Africa executive Mark Weston agrees. Many small businesses are often sole proprietors. This means that an owner has heightened financial liability in case something goes wrong.

Therefore, it is important to obtain insurance, because claims can destroy not only a business, but the business owners financial health, he says.

Nelson Mandela Bay

Businesses Chamber chief executive, Kevin Hustler, says small business owners often find themselves financially constrained within the first few years of operation, and that this is when the temptation to skimp on the seemingly expensive luxury of good business insurance is at its greatest.

However, as with any other decision, business owners must consider the greater long-term impact of the decisions they make in the early days of their business, especially when it comes to dealing with financial setbacks that could otherwise mean the end of business operations.

Losses due to theft, the breakdown of machinery and equipment, and unforeseen damage to premises, for instance, should be insured against to provide the necessary protection in the long run, says Hustler.

Videographer Craig Blewett says insuring his camera equipment was one of the first considerations he made when he started his business. If a camera

breaks or if I lose equipment due to theft, I am unable to provide my services, which in turn means no income, Blewett says.

However, he believes that premiums are becoming very costly and difficult to afford.

Sarah Dirsuwei, the owner of The Plantation and The Boma event venues, says having sufficient insurance cover is vital.

A single disaster such as a fire or a client getting injured on your business property can literally ruin a small business.

It is virtually impossible to self-insure to cover all the associated losses, which are much further-reaching than just the cost of the damage including business

interruption, legal action and loss of income.

Being in the hospitality industry, hosting weddings and functions, we need to manage our risk comprehensively. This includes having sufficient public liability cover, as well as basic short-term insurance, business interruption and key man insurance, says Dirsuwei.

When speaking to brokers and insurers about the importance of insurance, they consider business interruption cover to be critical for any startup, and one of the first options to be considered when looking into business insurance.

The cover is designed to put your business back into the same position, or as close to the same position, as before the occurrence of a loss, says Shehnaz Somers, the head of Santams commercial underwriting.

However, over and above business interruption cover, finding the best cover for a business individual needs among the myriad of options available can be a challenge.

It is a good idea to go to an insurer or broker specialising in your industry, because their policies are built to cater for the unique intricacies of that particular industry, says Dirsuwei.

Andrew Bolton, director of Southsure, says it is also important to ensure that your broker is from an independent brokerage with no vested interests as well as possibly a member of the Financial Intermediaries Association of South Africa (FIA), which advocates the highest levels of professionalism and conduct.

According to Weston, a

reputable broker will be able to evaluate the risks a business may face and will complete a proper needs analysis.

We would advise owners not to accept a generic type of insurance solution, he says.

Theuns Hattingh, director of Commsure, says using a reputable broker is important, primarily to establish the nature of the risk, finding a solution, and then comparing the different insurers products.

The beauty of business insurance is that it consists of 30 different sections ranging from fire, business interruption, to theft and vehicle insurance, Hattingh says.

According to Govender, small business specific pre-packaged options can start from about R150 to as high as R950 per month.

According to Weston, the major costs associated with business insurance depend on the risk appetite of the business and the segment it operates in, as well as the inherent risks in that sector.

For instance, industrial businesses face potentially higher risks as result of their processes some tend to be highly flammable or dangerous and thus can represent an increased fire hazard. Other industries have intrinsically lower risks, which naturally will affect the cost of insurance, says Weston.

Build the cost of insurance into your business plan; at least an amount providing the most essential or basic cover that will help you to continue to operate, should a loss happen.

Also, ensure that you understand the cover purchased, the exclusions, and your specific requirements. Ask, to ensure that it covers the loss your business is most likely to suffer, Govender advises. To find a reputable insurance

broker to speak to, go to www.fia.org.za

Fire damage could put you out of business if you do not have sufficient cover for your losses.

Having sufficient insurance cover

is vital

Ensure that your broker is from an indepen-

dent brokerage

Six tips on how to cut insurance costsBUSINESS insurance is not always very high up the priority list of a small business owner, yet it is invaluable. Here are six ways to try to keep insurance costs down.

SHOP AROUNDGo online, research and speak to other business owners to hear what they have to say about their insurance companies.

Remember, this is a very competitive market and you can use this to take advantage to get the best possible quote.

CREDIt SCORECredit scores are used to check the likelihood of potential claims by clients. This is because research has shown that people with good financial management skills are less likely to make a claim.

INCREASE ExCESSInsurance companies might be willing to allow a discount on your premium if you increase your excess which will take some of the pressure off the insurer in the event of a claim. Excess refers to the amount you will have to pay when you claim.

ASK FOR A DISCOUNtAs mentioned above, the industry is very competitive and your agent might be more than willing to allow for a discount should you ask for one.

ANNUAL PAYMENtSInstead of making monthly payments, which is the norm, rather make annual or quarterly payments.

You could save on your premium by making a once-off payment.

CHANgE YOUR COVERIf your policy has a broad coverage, you can reduce your premium by reducing your coverage.

However, this will also limit the losses that will be covered and increase the risk of you having to cover losses out of your own pocket.

page 10 - May 2014 SMALL BUSINESS CONNECT

get into international trade with ICt incubator In this months incubator focus, we travel to the technology incubator of Medo short for the Micro Enterprise Development Organisation. We spoke to Noluthando Tutani, the project manager at Medo to learn more about the incubators services. What is the name of your incubator?

The incubator is called the Micro Enterprise Development Organisation (Medo) Information Communication and Technology (ICT) Youth Incubator. Medo will be rolling out other incubators. All the incubators are project-specific and focused. This one is focused on ICT and internet TV broadcast. How would you describe your focus?

The focus of the incubator is on the ICT sector. The specific location the Mobaneng Precinct has been chosen to leverage high speed fibre (FTTH) bandwidth connectivity to the internet as commended by Icasa. The incubator will also host an internet TV studio to facilitate IP (internet protocol) utilising high speed connectivity. The focus is on supporting young entrepreneurs. Where are you based and from which areas do you recruit new incubatees?

We are based in Johannesburg and in Cape Town. Medo uses a mobile entrepreneurship incubator to engage with rural, township and urban communities all over South Africa. Trep is an acronym for the word entrepreneur we call the mobile incubator Treppie. Treppie is equipped with 10 computer work stations with free wireless internet and a meeting area. Treppie has a team to assist community members with basic computer literacy skills. The community is invited to apply via the Medo website for future business training skills in their area. Which businesses are best suited to join? For the ICT incubator, the best businesses to join are ICT businesses that use a lot of technology to deliver their craft. The incubator houses at least ten permanent ICT businesses and also provides virtual incubation. How do they apply?

Entrepreneurs are invited to apply via our website at www.medo.co.za or via our mobile incubator when its in their area. They are also welcome

to visit our incubator in the Maboneng Precinct. How long do businesses stay in your programmes?

We house entrepreneurs for as long as they need assistance. We found that businesses need a lot of assistance from year one to two. After year two they dont need that much help. However, we monitor the progress of businesses every three months. We found that as the businesses grow, they start to employ staff and can no longer operate from the incubator. They are then able to look for an office or a bigger space to operate from.

What are the two key elements of your support that sets you apart from other incubators?

Entrepreneurs will never pay for services rendered by Medo. We will never take equity in their companies this is to ensure that they retain their predominately black ownership. Medo will assist entrepreneurs from the beginning in order to build sustainable businesses. We have Treppie, our mobile incubator which goes to rural communities where help is likely not to come. How long have you been going?

Medo has been in operation since August 2011. How many businesses have been incubated with your support and how many of them are still going today?

We have ten permanently in our ICT incubator and the rest of the entrepreneurs are in virtual incubation. We have just over 120 active businesses. How many incubatees are now

in your programme?It depends on the number

of applicants that applied for a specific programme. In a Foundation Business Skills Programme there are typically between 25 and 40 businesses in a programme at any one time. What are your fees?

We dont charge. We secure funds from corporate spend. What commitments do incubatees make before they enter your programme? And what commitment do you make to them?

We ask the entrepreneurs to commit their time to the programme and that they are never late and that they attend all sessions. They should also be respectful and assist their fellow entrepreneurs. Medo ICT incubator offer these services:Free internet access.Free telephony.Meeting rooms with audio

visual equipment.Fully-equipped high definition

studio with Cyclorama.Shared service facility.Mail post box services for

incubatees.Shared reception services.Networking events. What is the best thing you have heard someone say about your incubator?

The best thing said is the networking opportunities giv-en to entrepreneurs. And the worst?

I have not heard anything yet. What was your biggest success thus far?

Our biggest success so far

is our Medo/BT International Trade Programme, run for the first time in 2012, culminating in successful business linkages for trade between the UK and South Africa. The primary goal of the programme is to increase trade between small businesses in both countries. We have been able to achieve this thus far and more than half of the businesses we send to the UK come back with contracts and deals.

What is your biggest wish for improving support to entrepreneurs in South Africa?

My biggest wish for entrepreneurs is to get assistance in learning how to manage a business and finance before they can be given access to funding or can apply to any funding programmes.For a list of incubators, go to

www.SmallBusinessConnect.co.za/lists

Networking, networking...BUSINESS owner Kopano Ntsoane, co-founder of Modern Entertainment, credits the Micro Enterprise Development Organisation (Medo) Information Communication and Technology (ICT) Youth Incubator with the growth he has seen in his business in the last four months. Heres what he had to say... How long have you participated in the incubator programme and when will you exit?

I have been part of the programme for four months now, and I plan to exit after 12 months operating in this space. I estimate that by that time our revenue structures will be properly in place. How much did your turnover and profitability grow after joining?

On joining the incubator, we began working professionally with a clear vision in what we would like to achieve in 2014. This has assisted us in getting partnerships like Ster Kinekor, Pitch Black Post and

4Moola which added to our monthly turnover.

What are the best benefits you received from the programme?

We have had a number of opportunities and benefits. One of which is the great office space we have with everything an entrepreneur will need to be productive.

For example, a phone, internet and a green screen studio facility. Moreover, they provide support and mentorship. We also have the opportunity to meet other entrepreneurs from around the country in boot camps. What would you suggest be added or changed to make the programme better?

I have learnt the most important principle of business in the atmosphere that the incubator offers and that is networking, networking, networking.

This played a major role in the profits and progress. of my business.

Noluthando Tutani

BUSINESS INCUBAtION

Kopano Ntsoane, co-founder of Modern Entertainment

www.SmallBusinessConnect.co.za May 2014 - page 11

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Practical tips for starting your businessBY VUYISA QUBAKA

STARTING a business, anywhere around the world, is a daunting task. Starting a business in South Africa, however, is made incredibly difficult by frustrating red tape, sometimes enough for many to give up on their dreams.

In the 12 years that I have been involved in business, either as founding entrepreneur or business partner, Ive registered eight businesses (using four different legal entities close corporation, private company, non-profit organisation and co-operative). Here are some things to consider if you are about to start your entrepreneurship journey.

BUSINESS REGISTRATIONGet acquainted with the

Companies Intellectual Property Commission (CIPC), because this is the Department of Trade and Industrys agency responsible for ensuring that companies (and intellectual property) are legally registered in South Africa.

The CIPC is really the start of business compliance in South Africa. The basic business compliance process entails business registration (please familiarise yourself with the various legal entities that you can register by going to www.cipc.co.za), South African Revenue Service registration (tax clearance certificates are a requirement for government tenders and Broad-Based Black Economic Empowerment certificate (this can issued by a registered accountant or auditor or a South African National Accreditation System (Sanas) approved verification agency via www.sanas.co.za).

Having a compliant business is itself a critical part of starting and developing a legitimate business. These days there are also online platforms like Enterprise Enabler (www.enterpriseenabler.co.za) that can help you to complete a very basic business compliance process at an affordable rate. Ive also been involved in putting together a Business Startup Kit for South African SMMEs, and you can learn more about it via www.businesskits.co.za.

MARKET RESEARCHOnce compliant, it becomes

important to build a sustainable, profitable business and my advice is to remind yourself why you started a business in the first place: To make profit.

We all start a business because we spot a gap in the market, and in most cases, there is someone willing to pay money in exchange for the product or service.

The beginning of every business has delays, setbacks and miscalculations, but the best way to limit mistakes is by conducting extensive market research or if youre buying or investing into an existing business, to conduct a due diligence. Its always worthwhile

to test every concept or idea on a small group, to satisfy yourself that it works before spending a lot of money developing or marketing it to a larger audience.

FINANCEThe journey to prosperity and

profit is also made up of business financing to either start, or accelerate or expand and South Africa has many options, but many business owners dont take the time to fully consider their options when starting out.

NETWORKINGI encourage all South Africans

to join a formal business chamber, network or forum. You will find one in every province in this country.

Business chambers, networks or forums are excellent at providing a safe space for entrepreneurs to get support from other entrepreneurs, get information or opportunities and meet potential funders or mentors.Vuyisa Qabaka is an

entrepreneur. Connect with him on Twitter at @vuyisaq.

6 steps to start your journeyHere are entrepreneur Vuyisa Qubekas easy steps to starting a business:Idea generation: spot a gap in

the market.Idea validation: market

research or due diligence.Business compliance:

cover company registration (Companies Intellectual Property

Commission), tax registration (South African Revenue Service), and Broad-Based Black Economic Empowerment certificate (Sanas).

Business finance: find what you need to start out.

Networking: join a business chamber.

Sell, sell, sell!

page 12 - May 2014 SMALL BUSINESS CONNECT

How to start a removals business

BY PAUL CRANKSHAW

TRANSPORTING goods is the life-blood of todays cities, as consumers and businesses need their possessions or products moved from one place to another. One area of opportunity in this sector is removals helping customers move home or office.

A removals business specialises in packing, loading and transporting furniture and other goods from a home or an office.

When starting up, a useful niche for small businesses to target may be the homeowner the ordinary consumer who does not have a lot of cash to spend, but needs help to move large and bulky items. As a small enterprise, with low overheads and high efficiency, you can offer this service at a good price.

As you grow, there could be opportunities to expand your services into the corporate market, where margins could be higher.

COULD I DO IT?Moving furniture and other goods is a physically demanding job, with much lifting and carrying, so you need to be fit and strong. You also need to be able work in all weather conditions hot, cold or wet so it is not for the faint-hearted! Each job is likely to be different, with its own challenges so make sure that you are practical and patient, and good at finding solutions that are efficient and safe.

You must be a good planner and organiser, keeping to a schedule, so that you work to your customers expectations. To do this properly, you should be able to estimate how long it will take to load the required goods, and how much space they will take up.

If you underestimate the work required, you will lose money and will probably delay your next customer; this makes it difficult to build a good reputation and get referrals for more work. Social skills are vital; you must get on with people from different backgrounds, and deal with customers who are stressed.

MY TRAINING NEEDSThis industry is still largely

unregulated, so there are no

compulsory training requirements for people wanting to start a removals business, but there is training available that could make your business more successful.

The Transport Education and Training Authority (Teta) accredits training organisations that provide good courses to businesses in this sector. For further information, contact Tetas Road Freight Chamber on 011 781 1280 or visit the website at www.teta.org.za. The qualifications they support include the National Certificate in Professional Driving. Also look on the website of transport magazine Fleetwatch for training providers (www.fleetwatch.co.za).

TARGET CUSTOMERS

About 2.5 million South Africans move home each year, most are between 25 and 34; they are developing their careers and families, so are usually moving into larger homes. Not everyone who moves home uses a removals service, but your customers will be diverse and could include any of these groups: Those with smaller homes (or moving somewhere close) could use your

local services.Customers may also just want

to move one or two large items and dont have suitable transport to do so. Small businesses that are moving premises could also use your services. However, some smaller retailers who cannot afford their own vehicles use a contractor instead. Also, large retailers may use your services if they get very busy and dont have enough transport to deliver. Homeowners and businesses often need rubble or rubbish to be removed, usually during building operations. If you offer this service, you will probably need a different type of vehicle to deal with these loads. If the material is not too heavy and the loads are fairly small, you may manage with a trailer (a cheaper option than a whole new vehicle).

PROMOTE YOURSELFHere are some ways to get your

business known:Get leaflets and flyers printed

and distribute them in your local area. Target those households or businesses that are more likely to need your service soon. For instance, drive around and find homes with a For sale sign outside; people who are planning to move house will be more interested in your service.

Advertise regularly in your local community (or suburban) newspaper; this is usually one of the first places people look when they need a removals service. For community newspapers in your area, look on the websites of the Association of Independent Publishers (www.aip.org.za) or Caxton Publishers (www.caxton.co.za), South Africas largest publisher of suburban weeklies.

You could even set up your own website, with information about your services, basic prices,

contact details and testimonials from previous customers who were happy with your service.

Decorate your truck with your logo and business colours, and display your name and contact details boldly for people to see.

DONT BE A COWBOY!Being ethical, trusted and respectable can earn you more customers. Consider joining a trade organisation such as the Professional Movers Association (www.pmamovers.co.za); this will raise your image and will make potential customers feel more confident about your professionalism. Before you join, you will need to meet certain quality standards. As a member, you can display the associations logo on all your publicity material.

Go to www.cobwebinfo.co.za for more by Paul Crankshaw.

StARtINg OUt

Decorating the truck with your logo and displaying your contact information will project a more professional image.

Black startups to get boost from fundBY DANIEL BUGAN

STARTUP businesses struggling to secure funding to take their operations to the next level have been flourishing thanks to millions of rand in investment funding from the South African Breweries (SAB) Foundation.

The SAB Foundation launched the Tholoana Fund three years ago; it seeks to benefit historically disadvantaged individuals and communities through entrepreneurial development in South Africa.

Tholoana Fund is a seed grant programme and provides grants between R50 000 and R250 000 to qualifying businesses, depending on their needs.

It is a beneficiary of SABs broad-based black economic empowerment investment scheme, SAB Zenzele.

Boipelo Nkadimeng, the head of community partnerships and enterprise development at SAB, says the fund was started to assist small businesses in South Africa that struggle to secure capital owing to a lack of collateral and a poor business track record.

Nkadimeng says the fund has invested a total amount of R14.2 million in 136 businesses since its inception in 2011.

Maloti Mothobi, owner of the clothing manufacturing company Strato Concept Store, was one such business owner who secured investment funding. She says she needed the money to buy machinery and office equipment as well as employ more staff and acquire marketing and promotional items.

Mothobi was awarded R247 000 in funding, which she says has dramatically improved

her business. I was able to employ an

additional designer, and could purchase sufficient stock to see us through our peak periods and for our soon-to-be-launched online store.

She believes her application for funding was successful because she had all her business documents in place.

While the Tholoana Fund is open to black-owned and black-managed businesses in all sectors, the business must be a startup in initial stages of operation. For instance, the business must be operational for at least six months and must be under three years old. Applications must demonstrate an enterprises commercial viability and job creation potential. The business also needs to be compliant with tax laws and any other

applicable regulations such as the Companies Act.

The owner must also be involved in the day-to-day running of the business.

Preference will be given to businesses run by women, young people, people with disabilitiesand people living in rural areas.

Applications will be assessed according to eligibility criteria. An on-site due diligence will then be performed to verify the information supplied by applicants and to further assess the enterprises viability.

Application cycles are staggered between January and September. The next two rounds of application are from 30 April to 30 May 2014 and from 1 August to 12 September 2014.To get an application form, visit

www.sabfoundation.co.za

www.SmallBusinessConnect.co.za May 2014 - page 13

good leaders create safety for their peopleCHRISTOFF OOSTHUYSEN reviews Leaders Eat Last Why Some Teams Pull Together and Others Dont by Simon Sinek, published by Portfolio Penguin (2014).

WHY is it that in recent times the world has experienced so many repetitive market crashes when the previous market crash happened as far back as the so called Great Depression?

The answer, says Simon Sinek in Leaders Eat Last, lies in the imbalanced approach adopted by leaders of the economy since the last World War.

Imbalances emerge where the abstraction of data overrides the needs of people, where individual gain of executives is more important than value offered to the customers the business serves. It is when leaders eat first.

This imbalance, he says, is best explained by comparing the business approach to the chemical balance our bodies create to keep us happy. These chemicals are endorphins, dopamine, serotonin and oxytocin.

This comparison rings a bell! In his previous book Start With Why, Sinek explained the Golden Circle of how leaders inspire action at hand. The structure of the brain, where the most obvious and clearest aspects of business are found in the outer ring of the circle the what while the inner ring corresponds with the more fuzzy but meaningful the why.

In Leaders Eat Last he argues that it is the imbalance between these four happiness chemicals, as these manifest in business, that cause the disturbances in the markets and that leaders should work at restoring a balance.

In our bodies, endorphins mask pain so that we keep going; dopamine creates the good feeling when we notice that we are achieving progress and reaching goals; serotonin creates the feeling of pride when others recognise and respect us; and oxytocin creates the feeling of love and deep trust with the people closest to us. In a healthy body, there is a balance between these short-term and lasting happiness chemicals. And in business, Sinek argues, we should aim for the same balance. But there is no such balance at the moment this explains the volatility in the world economy.

The analogy of the happiness chemical with business brings some interesting insights. While dopamine offers instant, but short-lived gratification, oxytocin boosts

the immune system and gives a lasting effect of calm and safety. Too much dopamine would result in big spurts of empty happiness, but is it not better to have

gradually increasing and ongoing happiness from oxytocin? This is what Sinek argues where things went wrong in the economy the chemistry is out of balance and

needs to be fixed. Where leaders achieve such balance, it becomes possible to create Circles of Safety. Within a Circle of Safety the people inside an organisation

are inclined to support each other and work together. When leaders are focused on creating the safe space for their people to prosper, they will eat last.

REVIEW

Trade Opportunities CentreThe Department of Trade and Industry (the dti) through the Trade Opportunities Centre (TOC), assists South African companies across sectors to identify international business opportunities. The TOC is responsible for matching South African exporters with international buyers seeking to purchase goods and services.

The TOC offers the following services:

Match-Making - the matching of international business opportunities to export-ready South African

enterprises; and

Trade Lead Bulletins - the weekly publishing and distribution of international business opportunities to

South African enterprises.

To subscribe to the dti Trade Lead Bulletin e-mail: tradeleadbulletin@thedti.gov.za

For more information, contact: Percy Ngobeli, Tel: (012) 394 5792 or e-mail: PNgobeli@thedti.gov.za or Martha Mahlangu, Tel: (012) 394 1179 or e-mail: Martham@thedti.gov.za

the dti, empowering industries and broadening economic participationthe dti Customer Contact Centre: 0861 843 384Website: www.thedti.gov.za

Fund sparks rise in franchisesBY DANIEL BUGAN

THE launch of a R107 million fund could see the rise of many more franchises, especially with big names like Burger King and Walmart having opened in South Africa in recent months.

The Franchise Fund, launched last month, is an initiative between Business Partners, the Development Bank of Southern Africa and the National Treasurys Jobs Fund. The funds financing model requires just a minimum contribution of 10% of total financing from the franchisee.

The funding is structured such that the Jobs Fund finances 50% of the total financing requirement, less the franchisees contribution, while Business Partners finances the remaining 50% portion of the total financing requirement.

Gerrie van Biljon, executive director of Business Partners, says applicants are required to undergo an evaluation process and training in order to qualify for funding.

The evaluation process and training programme is designed to ensure that the franchisee has made the correct decision to start a business of this nature.

The evaluation process focuses on the character and personality of the entrepreneur, while the training focuses on their ability to successfully run a business, says Van Biljon.

Only on completion of training can the franchisee begin operating their business.

Following the training, mon-itoring of the franchisee begins.

This includes regular mentor visits to the business premises, evaluating performance and offering guidance to the franchisee. In addition to financial support, a portion of the funds

from the Jobs Funds contribution has been set aside for technical assistance. No interest is levied on the funds disbursed for technical assistance.

Beneficiaries only need repay this portion of the funding after having settled the portion assigned

to financing the purchase of the franchise unit.

Van Biljon says the funding that an applicant will qualify for under the Franchise Fund will depend on the nature of the franchise they want to purchase.

For some franchises the

capital requirement is less than R500 000, while for others the requirement is higher.

Entrepreneurs would only be able to buy franchises from franchisors that have been accredited by the SA Franchise Warehouse and Business Partners.

Franchisors must also comply with certain minimum requirements, such as The provision of proper

founding documents. Full membership. Accreditation to the Franchise

Association South Africa. They will also need to have a

successful track record.

Van Biljon says the SA Franchise Warehouse will handle the training, scrutiny and monitoring of the franchisees.

The fund officially began processing applications at the beginning of this year.

It has already completed its first few deals.Those interested in buying

a franchise and applying for funding can enquire online at www.businesspartners.co.za or visit www.southafrican franchisewarehouse.co.za for a list of franchise brands that are accredited in terms of the rules

page 14 - May 2014 SMALL BUSINESS CONNECT

Big franchises like Burger King are opening their doors all over the country, providing aspiring franchisees with an array of opportunities to choose from.

Finance helps franchisee on path to success

BY DANIEL BUGAN

WHEN Pieter Matlou wanted to start his own computer retail franchise he already had the experience, the expertise and the drive all he lacked was the finance. But that all changed when he read an article in a local industry magazine.

Having worked as a technical manager at a Matrix Warehouse branch, Matlou had been toying with the idea of buying his own Matrix franchise for years, but acquiring the finance proved a huge stumbling block.

Says Matlou: Getting finance was quite a daunting process. I had tried several banks but to no avail.

One day he picked up a South African Franchise Warehouse magazine and stumbled across a story about a new franchise

funding initiative that had been launched by Business Partners, called the Franchise Fund.

The fund, officially launched last month, is an initiative between Business Partners, the Development Bank of Southern Africa and the National Treasurys Jobs Fund.

Matlou immediately realised that he stood a good chance of securing a loan under the fund, as he complied with most of the criteria.

Namely, experience, attitude and basic business management skills that the funding institution required from its applicants.

In November last year he forwarded his application to Business Partners.

He did not know that in the space of just three short months his life was about to change forever.

In February, he received confirmation from Business Partners that his application for R750 000 in finance to buy his own Matrix Warehouse store in Lakeside Mall, Benoni had been successful.

I think they (Business Partners) were persuaded by my determination and passion as well as my experience. I was more than a good enough candidate, says Matlou.

To secure the funding he put down an own contribution of 20% of the total financing.

The fund requires a minimum contribution of 10% from the

franchisee.He says what impressed him

most about Business Partners was the way they assisted him through the initial application process.

He also appreciated the business skills training he received from the business financiers.

Business