Major boost for SMEs

THULANI MAGAZI

StreetLab Afrika, a recently established organisation with a focus on the development of entrepreneurs, hopes to inspire confidence among emerging and aspiring business owners in the townships.

On Friday April 1, StreetLab in partnership with Business Doctors Africa, unveiled plans to empower and give life to “frustrated” emerging business owners, during an event held at Verde Hotel, at the Cape Town International Airport.

In terms of the partnership, Business Doctors, with the assistance of StreetLab, will provide skills and training to emerging business owners in Gugulethu, Philippi, Khayelitsha and Mitchell’s Plain.

StreetLab managing partner Letele Mokhothu said the critical component of the partnership was to develop and support small businesses located at the bottom of the system.

He said there were many entrepreneurs in the townships, but many of them were not able to develop and grow their businesses due to a lack of support and training.

“Our vision is to see a painter become a contractor or own a construction company,” he said.

Mr Mokhothu, who is a qualified pharmacist, said there were many “frustrated” business owners in the townships who did not know where and how to access support.

Having decided to quit his job, Mr Mokhothu said he wanted to customise a Kenyan design of health stores into the country. However, his efforts have so far been in vain. Through StreetLab, he said, he hoped to realise his dream and those of many business owners in the townships without requesting financial help.

Businesses that are part of the plan will have timeframes in which to improve their profit margins and trading conditions. “In three to six months we want to see results,” he said.

At least 38 Small and Medium Enterprises (SMEs), in the townships, have already been assessed by Business Doctors to determine their challenges. The data will be used to develop the businesses.

Henk Stander, of Business Doctors, said they have a three-year contract with StreetLab to help develop the businesses.

He explained that as part of their plan to assist companies, they looked at various factors affecting the business. He said most businesses battled with recurring revenue. He said only 12% of the assessed businesses had a recurring revenue and that was their main focus.

Recurring revenue is the portion of a company’s revenue that is predictable, stable and likely to continue in the future. Examples of this kind of revenue is income derived from subscriptions, contracts and repeat customers.

They would also look at growing business stability, risk management, customer service and improve cash flow.

“We are not here to make a quick buck. We are here for the long-term, to make money as you make money. We are here to help,” he said.

He pleaded with business owners to be open and transparent and share all the relevant information about their businesses. “But if you cannot give us information, we cannot help you.”

Professional stylist Itumeleng Kgaphole said the hair and beauty industry was one of the richest in the country and called for it to be regulated in order for hairdressers to compete with their skills instead of products.

He claimed a lot of cheap hair products, some banned in other countries, were used in South Africa. He said these destroyed the industry, in particular small businesses as they could not compete for prices. He saw the partnerships as something that would give voice to the voiceless small business owner “in the corner somewhere”.