Page 6 - KZN Business Sense - KZN Chamber

ENTREPRENEURS IN NEED OF PARTNERS
Mel Clark, Executive them in terms of economic
Director of Black
Balance Projects
Internationally,
the
importance
of mentorship
for start-up
entrepreneurs
especially, has
grown to a
point where
mentorship
is a central
feature of
most business support policies and
programmes. Many international
experts argue that “entrepreneurial
skills and expertise are largely
tacit and socially constructed,
and therefore have to rely on
experiential action learning
approaches”, and thus mentors have
an invaluable role to play in helping
new (often young) entrepreneurs
navigate the early life cycle of the
enterprise.
This need for experienced
mentors for entrepreneurs is
especially critical amongst
young Black start-up
entrepreneurs, who have
the odds stacked against
Business Continuity Planning
Helper Zhou
from Sigma
International adversely impact businesses in
A panacea
to today’s
constant
economic,
social and
political
upheavals
that threaten
business
T continuity
here are risks or events
businesses c an foresee
and then there are those
they can’t: the so-called ‘black
swans’ that spring from nowhere;
the high-profile, high-impact,
unpredictable and rare events.
Research shows that SMMEs in
South Africa have a concerning
high failure rate of 70% within
first year of operations and
50% cannot surpass five years.
Whilst lots of reasons have been
noted, a closer look indicates that
Business Continuity Planning
(BCP) is one of the missing links
that unfortunately has been
relegated by both corporates and
small businesses alike. The 2013
KPMG report shows that many
businesses across Africa are at risk
of an inability to responding in a
planned and organised manner to
major incidents with direct impact
on their core business activities.
6
empowerment through
entrepreneurship. Some of
these significant hurdles to
entrepreneurship as an option
for rural South African youth,
include the facts that:
■■ They tend to have gone to
schools where the quality
of their school education was
significantly poorer than their
counterparts from urban
middle-class areas
■■ The vast majority have never
attended any tertiary
education, let alone education
in a business skills stream
■■ They tend to have had
parents and relatives who were
either unemployed or earned
a meagre living, thus not
having opportunities for
exposure to entrepreneurship
or business, and certainly not
having possibilities of relying
on relatives for start-up capital
for an entrepreneurial venture
■■ In addition to the major
barriers of language proficiency
(having to use English in the
business world), lack of
financial literacy, and ability
to use some of modern business
technology, they also tend to
This leaves businesses exposed to
danger when unexpected events
many ways which include: revenue
loss, reputational costs, temporary
suspension of operations, and in
some instances ultimate closure of
business.
The unexpected can happen to any
organisation, at any time. While
you cannot control the unexpected,
you can control how you respond.
The recent terror attacks in Europe,
ravaging Canadian fires, hacking
of the Democrats e-mails and
growing regulatory restrictions
are just but a few examples of
unexpected disruptions yet with
far reaching consequences. As such
BCP is more than just a buzzword,
but rather a strategic tool any
forward looking organisation must
have. In the developed world, the
9/11 terror attacks as well as the
2007-9 global financial crisis was
enough a wakeup call, and now
the majority of all types and sizes
of businesses generally embrace
business continuity planning into
corporate planning to ensure that
businesses keep standing in the
midst of any sort of disruptions
they may encounter from
internal and external caprices.
Notwithstanding this concerning
reality, it’s sad to note the current market to sell these items. A legal
level of shocking dereliction by
many businesses in Africa and
particularly in South Africa as
they are conspicuously not keen
have no prior exposure to the
“culture of entrepreneurship”
in which many of the youth of
other groups have grown up.
Given these inherent obstacles
for young Black aspirant
entrepreneurs, the need for both
fast-tracked skills development
and intense mentoring becomes
clear. The challenge with this is
that it is very difficult to expect
mentors to commit to intense
mentoring and supporting of
new entrepreneurs without
the financial incentive for
such involvement being
significant. Even if funding
for the consulting rates of the
mentors were to be sourced,
the mentors will arguably still
need to have extraordinary
interest and commitment to
the entrepreneur and his/her
venture.
This conundrum leads to
the idea that the two needs
of aspirant entrepreneurs,
namely the need for (a) start-
up and first-phase capital,
and (b) the need for intensive
mentorship, be combined in
the form of a “venture capital
partnership programme”.
on developing and implementing a
sustainable BCP plan.
“We learn from history that man
can never learn anything from
history,” said Georg W Hegel and
this seem to be the case with many
businesses across South Africa.
Their operations are exposed to
unwarranted danger when various
events occur and they end up
resorting to knee-jerk responses.
This danger is testified by the rate
at which many businesses found
it hard to respond to a litany of
recent developments like the
weakening rand, Uber revolution,
El Nino induced drought, the
Brexit, and union led strikes.
The abrupt import ban by the
Zimbabwean government is one
example that demonstrates the
essence of a robust continuity
plan for all organisations. Reports
indicated that businesses in
Musina alone lost about R100
million and more than 50 small
businesses closed. The protests
that erupted affected cargo
transporters from South Africa
and beyond, that use the Beit
Bridge border post, one of the
biggest ports of entry in the region. them from tottering all over when
Many businesses were said to be
stuck with perishables, some had
ordered stock on credit and had no
challenge was also created, as these
businesses were now in danger
of violating their service level
In such a programme, the ■■ There is a need for monitoring,
aspirant entrepreneurs would evaluation and learning
participate in a structured through the programme
process through which they implementation.
will be partnered with equity
partners (small scale venture The KZN Business Chambers
capitalists or investors) who Council has made a start towards
are able and willing not only such a programme with “The
to invest in the entrepreneurs Entrepreneur Competition”
business, but to be mentors to which is now running in a few
these entrepreneurs as well. local chambers, but this start
A programme like this would needs to be grown in scale. In our
need to be carefully structured research and strategy formulation
and systematically managed assignments as Black Balance, we
and facilitated by credible are finding a growing appeal from
organisations – such as the youth, especially in rural areas,
chambers of business in the for this combination of both
province of KZN - for a number start-up funding and mentorship.
of reasons, including the We continue to encourage local
following: established business
and Government
■■ There are notable risks of to build their
exploitation partnerships to
■■ There is a need for an nurture grassroots
independent “match-maker” entrepreneurship
to link entrepreneur and as it is one of the
investor/mentor keys to addressing
■■ There is a need for good poverty, inequality
governance and accountability and unemployment
■■ It is highly probable that in KZN. n
funding for the implementation
of the programme will be Black Balance Projects
sourced from Government, and Tel: +27 (0)31 832 3450
thus accounting for the use of E-mail: cnarain@blackbalance.co.za
the funds becomes important Website: www.blackbalance.co.za
agreements with suppliers. having to respond to an incident
The recent tornado destruction which may disrupt or threaten
presents yet another warning the day-to-day operations of their
regarding lack of BCP. Reports business”.
indicate that the mall in Thembisa However, one of the worst pitfalls
was ravaged, affecting a number many organisations have trapped
of business operators, with 400 themselves in is mistaking risk
people being displaced. A simple management plan and disaster
prognosis will tell anyone that recovery plan to be the equivalent
businesses in the mall were forced of BCP yet the duo are but pieces
to stop operating forthwith and of the overall puzzle. The BCP
those without insurance for such looks at each and every aspect
eventualities will find it hard to of the business and assesses the
crawl back into business. On the impact of various disruptions to
other hand, the businesses in the these key organisational pillars
area, which were spared damages, with enterprise-wide lances. After
have yet another intense hurdle of conducting the impact analysis,
drastic drop in revenues since the the company will be in a position
displaced 400 people (consumers) to identify and rank various
are no longer available. disruptions based on severity,
As can be seen, it can take just thus aiding the development of
one disruption and like volcanic a methodical drill, which will
eruptions the entire business continuously be stress tested
would be gutted by the proverbial to ensure its robustness when
inferno. Yet with up to date BCP, various eventualities occur. This
businesses can navigate past such means that businesses can easily
turbulent times. These recent determine value at risk and
events must present enough an formulate a pragmatic integrated
impetus to the South African response plan to mitigate the
businesses on rethinking BCP forecasted impact on the business
as a strategic tool that can save as a whole.
If you want your company to
the unexpected strikes. Many effectively spring back from any
international organisations have disruption to its operations, then
sung from the same page regarding you need to think real and think
the essence of BCP as a continuity business continuity planning! n
management plan, with ISO 22301,
asserting that “Most organisations E-mail: helper@sigmaintl.co.za
will, at some point, be faced with Website: www.sigmaintl.co.za