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After tabling his budget, the finance MEC sped off to Soweto, where he was part of a workshop on small business, which has the power to transform township economies.
SOWETO’S identity as a township is changing – it is moving from being a dormitory town for Joburg, just a place to live, to a thriving business centre with abundant opportunities, especially for small and medium-sized companies.


Huge shopping malls like Maponya Mall are changing the face of SowetoHuge shopping malls like Maponya Mall are changing the face of SowetoResidents are embracing prospects which may previously have been unavailable to them because of lack of funds or skills, and are determined to make their ventures succeed. Of course, there are still obstacles to face and challenges to overcome, but there are more structures in place to help business owners prosper by equipping them with the knowledge they need.

In this vein, after he tabled his provincial budget, the Gauteng MEC for finance, Mandla Nkomfe, visited the University of Johannesburg Soweto Campus to host a workshop.

It was titled “Transforming townships into economic powerhouses – taking the budget to small businesses” and aimed to inform entrepreneurs about support structures and opportunities open to them that would help them to expand their businesses.

Also present to add their input were Thami Mazwai from the Centre for Small Business Development (CSBD) and Shane Naidoo from First National Bank (FNB). Mazwai is the director of the CSBD, which is located on the campus, and used the platform to speak of the challenges and prospects faced by small businesses.

“No business is found in space; they are found in communities,” he said. “The problem in townships is that people will jump into a taxi and go to Johannesburg or Sandton because they believe the goods they are buying are cheaper and of a higher quality there.”

The challenge was, therefore, to reverse this perception, which was damaging to township-based businesses. “R13-billion is being spent by the people [of] Soweto every year, but 70 percent of that is bleeding out and not being used in Soweto. We need to make people buy in Soweto,” he said.

Another aspect that needed to change for business owners to become more successful was the focus of industry. “Townships are more retail- than manufacture-driven, and I want that to change.”

Mazwai ended his presentation by reminding his audience: “You have the right to shape and determine your future.”

Bank loans
FNB’s Naidoo, who deals with BEE solutions in the commercial premium business banking section, spoke to the business owners about finance and the support that was available to them from commercial banks.


The auto industry is taking offThe auto industry is taking off“One of the biggest challenges is that there is a huge market for commercial banks to service,” Naidoo said. “We need to listen to the needs of individual entrepreneurs, as there can be no blanket approach or strategy which will work for everyone.”

He had found that one of the best ways to help new business owners was by providing support. “You, the business owner, may have technical skills, but no practical experience. This is why 80 percent of small businesses fail in the first two years, and is why FNB offers post-loan support.”

It was also why he recommended that the bank should be the last port of call for aspiring entrepreneurs. People hoping to open their own business should do plenty of research first, so they knew what market they would be entering, and more specifically, what challenges they were likely to face and how to overcome these obstacles.

Nkomfe also focused on many of the obstacles small business owners had to address, but looked more in-depth at the role these companies played in the economy. “Micro and small enterprises play a very important role; they revitalise the economy and create job opportunities where the majority of the population would be employed,” he said.

Gauteng Enterprise Propeller
The province had long recognised the contribution of these companies, Nkomfe said, and as a result had established the Gauteng Enterprise Propeller (GEP) to assist those who had started their own business. “In five years, [it has] helped thousands of small businesses by giving them advice and support.”

In line with this, the provincial finance department had also set up weekly tender workshops. “They are about much more than tenders, as they provide valuable intelligence about management techniques.” They continued to grow in popularity, with over 600 small business owners having attended them in the last six months.

Nkomfe urged those gathered to attend future workshops. They would, he said, help prevent failure, which usually resulted from lack of finance, overtrading, delays in payments from customers and lack of core business skills. These reasons had contributed to why “60 percent of small businesses in Soweto four years ago have failed”, according to Nkomfe.


Oportunities are opening up for small businessesOpportunities are opening up for small businessesHis outlook for the future of small businesses was positive though, and the R34-billion outlined in his budget for infrastructural development would “provide lots of work and opportunities for small and medium-sized enterprises in Soweto”.

The Gauteng provincial government would also increase funding to the GEP so that it could provide more support to small businesses and allow them to thrive. “We will provide the sector with the support to develop and prosper.”

Good governance
He warned, however, that small businesses still had to carry out their responsibilities, which included proper corporate governance such as structuring the company, evaluating short- and long-term objectives, hiring an accountant or financial adviser and setting out a code of conduct; always being on the lookout to be innovative; and going the extra mile for customers so they would keep on coming back.

“Be careful about how much you pay yourselves as it can have a negative effect on cash flow,” was his final piece of advice.

If the businesses, banks and the government could work with each other and fulfil their respective roles, Nkomfe said “prosperity will follow and [small businesses] will be helping millions to live the South African dream”.

The workshop took place on 1 March.

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