Entrepreneurs

Zinhle Sokhela:  PCB Director

It is no secret that entrepreneurs represent the engines of economic growth in emerging countries.  Our country is no different.  Government, the private sector and many NGO’s are involved at different levels in various initiatives to boost entrepreneurial activity throughout the country.  There is no shortage of programmes, organisations, competitions and initiatives targeting entrepreneurs.  However, one of the biggest challenges facing most entrepreneurs is access to capital.   Yet it has been pointed out that South Africa has the same availability of capital when compared to other countries.    Why is it, therefore, that entrepreneurs struggle to get funding? 

There are many hurdles to be negotiated.   Some of these are not fully appreciated and in many quarters the banks, in particular, come under intense fire for their apparent reluctance to provide funding.  While providers of capital need to offer transparency and communication about what applicants need to do and the criteria they need to meet in order to access funding, the seekers of loan finance also need to accept that only government is in a position to give money away, and even then it is subject to scrutiny.  Is it justified that public money should be given away when there is such strong evidence to suggest that much of it is wasted?    The reality is that most entrepreneurial enterprises fail.   They do so because the people behind the enterprises lack the necessary business skills, particularly in the sphere of finance.  

We entrepreneurs need to appreciate this and make some changes.    Applying for funding is like going through boot camp and there is no short cut.    The rigorous examination of the application to the bank or funder cannot be avoided, so be prepared to pay pass the test.  We need to do our homework by finding out exactly what information the funding organisation is looking for and making sure that the application is completed accurately and fully.   Very often, if a question appears to be too difficult to answer, or the applicant would rather not offer an answer, a blank is left.   This is a black mark immediately.   If a person, seeking to establish or grow a business, cannot complete the application properly, there is no certainty that he or she will manage the money loaned.    We should not assume that funding is due to us – we have no right to it and have to earn it by showing that we are capable of managing it properly.   There is, unfortunately, a culture of entitlement among entrepreneurs who believe that it is their right to get funding just because they need it.  Simply put, the need for funding doesn’t make a compelling case for providing it.

The skills of the entrepreneur are critical to success; so too are passion and commitment.  They are revealed first of all in the quality of the business idea and the business plan.   Here the entrepreneur can show that he or she is so committed to the business venture that research and hard work has been done and that the business plan shows that it can be successful.    A business plan written by another party does not reflect the commitment or understanding of the entrepreneur him or herself.    This is not to say that help should not be sought.    It is for this reason that entrepreneurs need the assistance of a range of different organisations, including, perhaps, incubators, and, of course chambers.   A parent asked to help a child with homework should advise and guide, but not actually do the work, as this doesn’t help the child.    Entrepreneurs require targeted, specific support.  Most entrepreneurs are not well positioned to make the best use of the services offered by the support organisations that exist, because they don’t have a clear sense of what it is they require.    Or, perhaps, they don’t appreciate fully just how difficult it is to conduct a business successfully.    The notion that the provision of money will automatically make a business viable is absolutely untrue.    Skill and commitment and a so-called ‘head for business’, which we don’t all have, are far more important issues.

Leave a Comment