Selecting entrepreneurs

Yesterday i was part of the selection process for the Raymond Ackerman Academy for entrepeneurs. Seeing all these young faces come through the door is truly one of the highlights of my year. Soooo much potential oozing out of most of them. Young people all black giving business a go. Some had started businesses but had really struggled maintaining them. Some were still running small businesses and earning a small living while employing others. I am amazed that a country with so much potential sitting out there doesnt give these youngesters more support. We live in a country that is so buraucratic and rule bound when it comes to business. The authorities want to apply the same rules to a small start up as they do to large multinationals. This is ridiculous. In the NGP [ new growth plan] ( of which you can tell I am not a fan) this is mentioned as vital to create jobs. And I do agree. However the rules need to change.
Here are my 10 rules for small black business creation for South Africa.
1. Free courses like the RAA course funded by the state offered en masse to selected young business stars. These will be around 6 months.
2. Subsidised incubator services and costs by the state ( and state institutions such as telkom, eskom etc) once they have completed the course work. This will be for 3-5 years, and will provide the tracking of these small businesses
3. A new company structure for small start up businesses that will include a maximum time period to register of 24 hours.
4. For a start up company only a 5% tax rate should be paid for the first 10 years.
5. People should be able to hire and fire as they wish without any labour legislation
6. There should be a "special fund" funded by a state bank managed by high risk entrepreneurs ( not bureaucrats) to loan small businesses money.
7. Every company should still invest in ED ( enterprise development) and PD ( Procurement development) where larger companies are funding specific programs.
8. A massive state funded public campaign by the state to promote and guarantee work to these small businesses over a 5 year period.
9. Reward Innovation (teach innovation) at schools and teach and reward risk taking
10. Let people fail but dont punish them for that. In South Africa we punish people who have tried rather than rewarding them for their efforts.

This is what this blog is all about!

Why are entreprenenurs scared of joint ventures?

When 2 companies which are both start-ups need something from one another then surely a joint venture is the best way to move forward. I was approached by a new start up that basically wants to let the public have access to (any sports code) sports results on a live weekly basis from schools, and the results and story of each game will be posted on the web-page by school journos. A great idea. Another company has a great web page that encourages the public to write stories that are positive good news stories, trains journos and then tries to raise funds and mobilise good for good causes. They are both section 21 companies. Why would these companies not use another to get ahead? The sports idea needs the training the good news project can offer as well as access to a great web page. The good news project needs major regular traffic that the sports project can offer. The answer is both about egos ( its my concept and I'm not comfortable sharing it), and flexibility ( I cant/wont change my business concept). So they will probably go their own way and maybe even become competitors. What I have learnt about being an entrepreneur is that you need to place your own ego to one side, and you defintely need to be flexible. Sometimes a small change or adaption is the thing that can take your business to the next level. In this case they need one another and it would be a travesty if they didnt get it together. Tomorrow I will be meeting with the winners of all the stick fighting tournaments and we will be organising public events in the city and the waterfront area and Camps bay targeting tourists over the holiday season. The last tournament of the year will be at Masiphumelele Site 5 Fishhoek and you are all welcome to come and attend. If there is anyone who wants to buy sticks for gifts this christams give me a call.

being black!

Ntuthu and Lira are 2 young female entrepreneurs with a good business concept. They sanitize and clean computers, telephones, fax machines, screens etc...anything in the office/workplace where more than one person touches with their hands. They have studied through the RAA school for entrepreneurship and they have received some start up funding. Sounds good right? Well there is a problem with this picture. They are black and there is one big downside. Most businesses they need the work and contracts from are white owned and controlled. And yes it is damn hard for them to open any doors unless some white guy helps them. If you think I am just ranting on about this as a race issue then you are correct. Its much easier to be a small business and white in South Africa as you may have some contacts that will popen doors, or people just assume trust because of the colour of your skin. Black business and truly black ideas struggle much more than white businesses do. The question is what can be done about it. When people like Ntuthu and Lira or Vuyisile from the stick fighting company knock on your door you have to understand that this is a massive step these young people are taking. A step in self confidence, belief, and trust. Its the way you say no or the way you dismiss them. They are not there to beg for a job. They are selling themselves as much as their products/services. The country is always talking about increased entrepreneurship and small business but in reality we arent giving these people a chance. I sent Ntuthu and Lira around my complex and it was not that they received a no, it was dismissive and degrading. Yes, they will make mistakes, and yes they may need some guidance and mentoring. But how else will they make the transition from job seeker to job creator. There should be a policy in every company, that if a young black entrepreneur knocks on your door trying to sell themselves and their businesses the company should hear them out, give them some decent feedback, and now and then bet on them...give a few of them a chance. Even a trial period will teach them valuable lessons. Perhaps Minister Patel in his NGP paper could have added a practical idea like this...all companies are not only measured on procurement but also on how many small black owned businesses they let through their door to pitch their services to.

a product or a service?

I beleive that every young entrepreneur should start with a product. Something you can see, touch, feel, taste. Why is this? I have learnt that people get much more excited by something that is real, rather than a concept. When I lecture at RAA course for young woud be entrepreneurs i always tell them that the final presentations should be with real prototypes. They will have though about a creative idea like the recycled computer biltong drier or the shower kettle or a builders hard hat under-cap, and they need to show everyone what this product in its most basic form will look like. Those students who choose services or products that are more IT based find it difficult to explain and showcase. A product also provides the discipline of costing properly, which leads to more accurate sales prices. With the stick fighting company i have the following products. I have sticks ( 2) and a list of rules ( for sale at R60 ), I have corporate workshops ( for sale at R3,000 for 30 minutes in the boardroom), I have padding, helmets etc, I have tournaments ( for sale to sponsors at 12 tournaments for R350,000 sponsorship in 2010), I have a coffee table book, I have a reality TV show, and I have a non-profit trust that will raise funding for young boys to learn the skill by older men. All great products! I beleive that once someone has cracked a product and all the hard work that goes into it, a service becomes a lot easier.

what business are you in?

I did a fantastic interview with Michelle Constand ( spelling ? ) on Saturday in between watching Noah my son fighting in a karate tournament. The joys of starting a business is that it is a 24 hour activity that never sleeps and requires every inch of your soul. I dont think people actually realise this. I think this is one of the make or break lessons when starting a business....you gotta give it your all. Its the same as the little karate dudes. The one's who practice the most will be the most successfull. The one's who play in the gartden with brothers and friends every day will be brilliant. And why should business be any different. 90% sweat and 10 % luck. This is why this blog is so nice as it disciplines me to write daily about starting a small business and i would encourage all those who start a small business to have their own blog. Later in the day I went to my sister who is trying all types of things in her business. Being a ceramist and artist we started to discuss the essential question about any business. "What business are you in". The most commonly used example is that Mcdonalds doesnt sell burgers but invests in property, or that coke doesnt sell drinks but refrigaration. I am in the business of ideas and I have many angles to follow. I lecture on innovation to young students ( which will lead to a book i am currently writing called " seeing the leaves" ). My company innovation shack CC develops new business ideas, implements and then sells them off in a variety of ways. And there are thousands of these potentially. I have a blog on new business ideas which you are reading...and on and on. I love new ideas because they turn me on. And your business? What business are you in? How many angles can you see in your business? In the case of my sister she is in the business of clay and everything that goes with clay, which is endless, innovative and inspiring! In the case of the stick fighting company this is a business about "being a black man", and being a black man in South Africa is an endless new endeavour of new products, markets and innovations. To fight, to watch a fight, to offer advice, to train young men, to market a proud and brave culture, to break into the boardroom and shake those men up a little and so on. The tournament in Nyanga was a great success as always. 2 more tournaments this year and then we hit the open streets. One in langa and one in site 5 Masi.

what can be achieved in 1 week?

What can be achieved in 1 week when starting a business? Well alot i think. I started this blog to encourage people to just go out and do things. I wish to hear from people who are doing new and innovative stuff. So if you are out there please tell me what you are up to? The next stick fighting tournament is this week at Nyanga Junction and promises the same thrills and spills as all the other tournaments. I have done a full presentation now for potential investors based on the film footage and the photos, and will start sending these to investors on Monday. My company registartion goes in tomorrow. So all you budding new entrepreneurs come on and get out there and start something new. You never know if you become the next big thing! I am also formalising the stick fighting product at the moment. The rule book is being written. We have judges training booklets that is being written as well, and tournament rules. I am looking at packaging the rule book with sticks that are from alien vegetation. I need to get about 1000 sticks packed for the Christmas season. I will produce some T-shirts as well. I think I also need a few exhibition type events during Chistmas on the streets to promote the company. ( I will use head gear and padding for these, so ordinary guys can participate and pay for the experience). Alot to do, speak to you tomorrow!

partnering with the media

I have been receiving amazing feedback from the tournament and the video's and pictures that were taken. I think an innovative business concept will always win over customers as people inherently want new things all the time. Also it encourages people to join in like media people, photographers, videographers and implementors/ managers. At the moment the concept of the stick fighting company is capturing peoples interest. Now I need to capture the media's interest and I will be sending to every media contact I have. The goal is to create enough media attention which will in turn create interest from sponsors and investors and clients. There is a rule in raising investor funds that I have learnt long ago and that is people give to those they have heard of. I remember reading a case study about 2 organisations. One had done extensive PR and the other had done none. The one who was well known received all the funding. I am a great beleiver in PR and this will be the next phase of the stick fighting company over the next week or so. The goal is to raise the capital and sponsors needed to grow this business. So watch the media as you will see the stick fighting company on every page!