While there are more than two million small, micro, and medium enterprises (SMMEs), representing 98% of formal businesses and employ 50-60% of the labour force, South Africa remains on the list of the world’s highest failure rate among SMMEs.
This is according to the founder and chief executive officer of Aions Creative Technology Mitchan Adams, who shared some of his tips that could help revive the country’s economy.
His company partners with corporate South Africa to directly co-invest in black-owned companies.
The company also identifies and invests in sound and innovative startups that can grow aggressively from a valuation point of view, and who have the potential to be sustainable and create permanent and valuable jobs.
“We have created a platform for all South Africans to participate in the investment and growth of startups,” he explained.
He added that SMMEs also contribute 34% towards the country’s gross domestic product.
However, Adams said: “South Africa has the world’s highest failure rate among SMMEs, with 70-80% failing within [their first] five years. The top three reasons for this failure rate are lack of access to finance, and poor planning.”
Adams, who describes himself as a serial entrepreneur, has experienced failures and many successes over the years.
Here are his top tips to help future entrepreneurs avoid being part of the start-up failure rate:
• Your idea is probably not unique, so your commitment has to stand out.
• Become the subject matter expert.
• Figure out what you need – funding or mentoring?
• Decide what you’re prepared to give in exchange for funding.
• Remember that a bank loan is a viable option.
• Connect with the right people.
• Don’t wait for market conditions to be perfect for entry.
• Define your vision, mission and purpose.
• Get your paperwork and legal contracts in order.
“Entrepreneurship can be a tough journey. You will work harder than you thought possible, learn something new every day, take risks, worry a lot. But if you have done your homework properly, and with the right investment partner at your side, it’s an incredibly rewarding journey,” he concluded.
For more information on the YES programme
call 087 330 0084 or visit youth@yes4youth.co.za
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