Digging up jewels in South Africa
Enterprise Development is such a cool idea: By putting some money in, plus some help to setup a new business like office space, mentoring, marketing support etc. you can achieve goals like long-term sustainable jobs, more tax, inner cities that are worth living and so lifting the yoke of poverty of whole nations.
Such was the motivation for PEN – but on a smaller scale – to start the Tekanô (meaning “enough” in Northern Sotho) project in Sediba house in the middle of Pretoria, South Africa, some 8 years ago. They already owned a large block of flats which was used for social housing at subsidized rent. The profit coming out of this in turn is contributing to fund their even more charitable wellness and wholeness programs to serve the marginalized communities in the broader Tshwane area. So, they took 2 floors of that building, remodeled them and invited some 30 startups or struggling small businesses to rent cheap office space and get a whole package of close support from PEN.
How are entrepreneurs residing in Sediba house doing? Is the concept working fine?
Us, a small team from SAP is currently investigating some randomly chosen draw of 12 out of ~ 30. Surely, there are those success stories like self sufficiency – one entrepreneur at a time. These are the ones showing that it is worth trying. But how about the rest?
When you dig into it you really find more jewels – although they are still fighting their day-to-day live. Here are 2 more:
Sophie* is running her tailoring business for 8 years now. She employs 1 to 3 seamstresses depending on the demand and – from time to time – has difficulties in getting paid by government when she is producing school uniforms. We have learnt in between that this is a pretty common pattern if government contracts are in the game. Now, what is really special about Sophie is her will to improve: She is constantly taking entrepreneurship training classes at University – and she has motivated 3,365 !! other fellows to also participate in these trainings. Also, she regularly organizes sales shows for her and her colleagues’ products in tents on church street, Pretoria’s most touristic site. So, she is a real influencer and multiplier. How can you leverage such a potential even more?
In contrast to this, Nancy’s* business, just some doors further down the floor, has grown a little bit bigger: She has 8 employees, is using 4 sales channels – web, yellow pages, direct sales and word-of-mouth of course. After some bad experiences with outstanding bills she now has a strict rule she follows: 50% deposit when ordering, 50% payment in cash when garments are delivered – “When I am too soft I kill my business”. That already impresses. But still she has another simple yet effective conviction: “I hate credit”. She never takes loans. Combine that with hard work and you will be successful: the day we talked to her she turned 40.
So far, we are still collecting material. But some inferences can already be seen: All businesses need help in marketing. Also book-keeping is a hurdle for many of them. And the basic principles to run a business need to be applied in all of the enterprises. The overall concept is at break-even for PEN. And yes, there are some steps to be taken to make the different businesses more profitable.
All in all, enterprise development is not such an easy job to be done and some more innovative ideas are necessary to enhance the quality of life of these people. But: counting the 100+ jobs that have been created plus the making a living for their families, a good start has been made.
* real names have been omitted due to confidentiality