Brandon Paschal, Director of Innovation at Launchlab, hosted this panel discussion with Shawn Theunissen, Head of Corporate Social Responsibility at Growthpoint and founder of Property Point as well as Remonne Modisakeng, entrepreneur and founder of Teambix.
Shawn explained that he dealt with many entrepreneurs as they navigated the COVID-19 crisis and the radical changes taking place in the economy. Most tried to consolidate their business model, manage cash flow and staff while navigating the legal aspects of staff and operating contracts. Young entrepreneurs were more agile and able to find ways to pivot their operations in a new direction by employing technology and digitisation. Property Point advised their clients to keep channels of communication open with all their stakeholders; clients, suppliers, debtors, creditors and bankers, keeping them updated on developments at all times. A safe cash flow and good relationship with stakeholders were critical. Even though COVID-19 challenged all levels of business it seems smaller enterprises adapted and changed more rapidly and successfully than larger ones.
Being adaptable was paramount to surviving the COVID-19 crisis. A cleaning and facilities management company was able to offer fogging services along with no-touch disinfectant dispensers within weeks of COVID-19 striking the country. Brandon remarked that the South African ticket sales platform, Quicket, used for this IGC Conference, had been running 3500 live events in February but at the onset of lockdown they pivoted their focus to online events which has doubled their business offering and almost doubled their revenue.
Remonne maintained that now is the time for entrepreneurs as the new challenges are opportunities for innovative solutions. Businesses have had to up their game, work more effectively and maximise their resources while manoeuvring round contracts and legal problems, managing cash flow and acquiring funding in troubled times. Teambix platforms software teams with spare capacity, allowing others to buy into it, so helping prevent retrenchment as firms can market their workforce to keep jobs alive. Companies are trying to protect their cash reserves so new projects are being shelved but they should move out of survival mode and look to rebuilding their businesses and the economy.
Brandon mentioned that the SA SME Fund launched a new fund during the COVID-19 crisis so all is not doom and gloom; money is available to entrepreneurs that have a good product. Shawn felt that traditional avenues of funding were inadequate in the current climate. Relief funds were totally oversubscribed and unable to help many that needed it most. The track records of emerging entrepreneurs are often misunderstood by funders due to archaic due diligence processes which need to be amended in the future. Entrepreneurs need to have their compliance elements in place before seeking funding, while their cash flow should not be overextended.
In times of crisis entrepreneurs often bring about radical change as they need to embrace the new normal. Big businesses are considered the job creators yet small businesses make up 58% of GDP and job creation. Large companies tend to shed jobs in extreme economic downturns but small businesses are more agile and can change in a short time. These small enterprises should be supported, as should local producers and suppliers. The mining industry has taken this to heart. Communities are engaged and catered for with needed facilities such as shopping malls or sporting venues being provided. Locals are encouraged to participate in the economy of the area. Much may be learned from the way the mining industry engages with the communities in which they operate.
Brandon agreed that localisation was increasing. Entrepreneurs are acquiring products direct from the supplier and delivering them directly to the consumer, so cutting out the large business chains. SMEs are also doing some important work in construction and cleaning services. This retains the capital in the local arena.
South Africa has made massive strides in science and technology and is producing some excellent high-tech products and solutions to medical and other problems in a shorter turn-around time. COVID-19 allowed everyone to pause and focus on doing business in a better, more efficient way.
A vital part of education for future entrepreneurs must be problem-solving as this constitutes a large part of what they will face in business. Another necessity is emotional intelligence. South Africa has a complex society with a great many different social demographics so emotional intelligence should be included in the problem-solving syllabus. Unconscious bias is also an ongoing problem, thus an emerging business will prove its worth and help to remove this hindrance by building a good track record. Being cognisant of our differences will allow better, more inclusive solutions and bring about better working relationships. Role models for young entrepreneurs to follow are in short supply. A mentorship programme would go a long way to encouraging future business leaders to emerge. Instead of remaining in survival mode it is necessary to look for new solutions which will accommodate the new normal which the world is facing.
In closing Brandon thanked Shawn and Remonne for their input and remarked that with the complexities of South Africa’s society and demographics, if entrepreneurs can navigate the problems and succeed here they should prosper anywhere in the world.
This panel discussion took place at Nation Builder’s 6th annual In Good Company conference (September 2020) which looked at “building back better”.