Small and Medium Enterprises (SMEs) are very important for inclusive economic growth and development in South Africa. According to the World Bank, SMEs contribute to 40% of national income (GDP) and 60% of total employment in developing countries. Keeping this in mind, President Cyril Ramaphosa has taken this initiative to set up a fund directed by the leading businessmen in the country to invest in potential startups and SMEs. The goal is to mentor and fund these SMEs with a turnover between R20 million ($1.40 million) and R500 million ($35.23 million).
In order to evoke the country’s entrepreneurial spirit, these funding companies are working day and night to address the pressing challenges to the country’s economic growth by providing the much-needed capital.
A few notable funding organizations working for the betterment are mentioned below:
It’s managed by an executive management team with an independent board of directors, the fund is a registered standalone investment vehicle. An independent investment committee is established to assess prospective investments into opportunities and funds. The company gives investments to recognized fund managers- venture capital funds or growth equity funds – that invest directly in SMEs that have the potential to grow and generate employment in South Africa. For more information, visit their website: www.sasmefund.co.za
The agency offers business opportunities to young entrepreneurs of South Africa and encourage them to establish and grow sustainable businesses. They follow the microfinance model for providing grants that is a huge advantage. These driven youngsters are not obliged to pay back any interest or funding they have received from the agency hence saving them from being trapped in a vicious cycle of repayments. Around 500 small businesses are expected to benefit from the NYDA Grant Programme every year. Here you will find more information on how to get more funding from NYDA: www.nyda.gov.za/
The vision of the fund is to provide financial and non-financial help to promote the participation of black people in the economy. Aiming to incorporate a culture of investment and savings, the NEF provides advanced financing products to businesses managed by the black via different funds such as Women Empowerment Funds, Rural and Community Development, uMonotho etc. Non-financial services includes pre-investment support, asset management, turnaround and many more. For more details on the services, visit: www.nefcorp.co.za/
The objective of the funding agencies is to tackle the current unemployment of 27.7% in South Africa while giving a push to its economy which is growing at 2%. Small and Medium Enterprises (SMEs) is considered as an agent of job creation and economic growth.
A gateway to the continent, South Africa is the second largest economy in Sub-Saharan Africa. Realizing the importance of entrepreneurship in the country, the Department of Trade and Industry (DTI) initiated several programs and grants in partnership with different funding organizations. These SMEs established by these funding have the potential to transform the economy by not only contributing to the GDP but also tapping into the development of new sectors in the market. Being a key driver of innovation, job creation, and economic growth, SMEs can significantly benefit the South African economy.
A few simple steps can be taken by the government to make the country more hospitable to entrepreneurs. First and foremost is the establishment of policies that supports new businesses. There should be tax-cut and similar incentives to encourage startups. Secondly, the establishment of funding accelerators and incubation centers can help people strategize their business plan.
Striving hard to differentiate your business from the existing competition in the market is the best business strategy. A few steps that you can take to set your business apart is to make a viable business plan and have a good online presence. If you are an established business in some other country that wants to penetrate the South African market, then make sure you translate and convey your message and business idea to this land of diverse culture by hiring a professional translation company like AfroLingo. AfroLingo is the finest interpretation and translation company in South Africa that is committed to hiring trained in-country native speakers to make sure that your project is efficiently completed without any glitch.
Small and Medium Enterprises (SMEs) have a major role in the South African economy as it represents 91% of businesses, offer employment to 60% of the labor force and account for 34% of GDP’s economic output. SMEs in South Africa foster diversification through their development of new sectors of the economy. Therefore, the South African government recognizes the importance of SMEs and their contribution to the economy which is why the government offers support and development to SMEs to empower their success across South Africa. The Banking Association South Africa supports SMEs through stakeholder engagement, and by introducing several initiatives such as:
- Risk Capital Facility (RCF) – EU Fun admin by Industrial Development Corporation
- Research and Knowledge Management
- Financial and Investment Committee – credit extension to distressed SMEs – NEDLAC
- Financial Sector Program (FSP) – USAID
- Financial Sector Charter and BBBEE
- Downstream banking and financial inclusion – Micro financing, co-ops, and banks.
On the other side, government initiatives actively promote SMEs. For example, the National Small Business Act of 1996 offers the establishment of National Small Business Council and the Ntsika Enterprise Promotion Agency. Another initiative, Khula Enterprise Finance is responsible for helping small and medium-sized enterprises get finance on behalf of SMEs, from commercial banks, financial institutions, specialist funds, and joint ventures.
Examples of Successful SMEs in South Africa
All entrepreneurs start from scratch and face many challenges on the journey to success. Here are two examples of such SMEs that have grown into successful businesses.
Bos Ice Tea is a South African brand of ice tea which uses 100% organic rooibos as the main ingredient. Rooibos is considered to be extremely healthy. The owners, Grant Rushmere and Richard Bowsher wanted to create a global brand but had to start small. He approached retailers and secured contracts to get the funding. Rushmere and Bowsher spent as much on marketing as their turnover and their revenue actually increased. Today the company has grown from zero to R100 million in just 10 years.
Sam and Rob Paddock started an online education business without a lot of money. However, they tapped into the growing market and created valuable partnerships with South Africa’s prestigious academic institutions. They faced many setbacks on the journey and not all of their ideas about online education succeeded. However, they were able to create a company from zero to R128 million in worth in a decade.
Road To Success and How to Survive Challenges
Founding a startup is never an easy task, it is always a risk but with determination, a solid business idea and work plan, anyone can succeed. Every startup in the world faced setbacks and challenges but they did not quit and bounced back with solutions. Here is an example of Nkazi Sokhulu’s entrepreneurial journey. He is the co-founder and CEO of Yalu – an innovative and transparent credit life insurance company that is disrupting South Africa’s multimillion insurance industry.
Nkazi Sokhulu’s entrepreneurial journey was not easy. He began while he was 26 years old with no funders when financial institutions were not taking him seriously. He went into a lot of debt before getting any funds. Some of the key lessons Sokhulu learned that age should not stand in the way of entrepreneurial spirit. He believes that if you have a good business idea, you should just start it without waiting for the money to come in. Another important lesson he talks about is to always be prepared for hard times. He says “Mistakes will happen, plenty of them. Don’t hide them, don’t run away from them: deal with them in an open and honest way”.
What You Need to Start Your Own Business
Starting a business requires a lot of courage and many considerations that you need to study before starting. You need to have a good business plan backed by market research. Even if you don’t have money to start the business, you can try to get funding from financial institutions. Having a solid team that you can trust to work with you is also essential in your startup.
If you are not offering a new product or service then it is important to set your product apart from your competitors. Offering lower price, engaging in latest trends of marketing, offering a different version of the product and distributing it in locations that are not being served by your competitors is the way you can set yourself apart.
A common trait among all successful entrepreneurs is that they schedule their week correctly. They have a weekly goal plan that they work towards which adds to the overall objective of the company. Having a schedule and work plan can be one of the underlying success factors for any business.
Expanding Your Business in International Markets
SMEs that have become successful in South Africa may look to expand their operations into international markets. Expanding into international markets present a challenge of a language barrier that the company must overcome in order to penetrate successfully! Business translation can help overcome this challenge. You can hire the services of a business translation agency that can translate your important business documents which you will need in order to expand to international markets. AfroLingo is one of the most trusted translation agencies in South Africa that has worked with a huge number of clients and participated in their success.
Contact AfroLingo today for a custom quote.
If you have launched a new startup and want to increase your sales and website traffic, social media is the way to go! A good marketing strategy coupled with social media marketing is a recipe for success for any startup. In South Africa, there are more than 3.83 million registered Facebook users, 55k Twitter users, and more than 1.1 million Linkedin users. This shows that there is deep internet penetration in South Africa and people are using social media every day to interact with brands and startups.
RocoMama’s Success Story in South Africa Using Social Media
Startups in South Africa are leveraging these statistics to create a successful social media strategy and target their customers for increased sales. RocoMama is an example of a successful South African startup that has used social media to increase sales and brand awareness. It has more than 17,000 followers on Twitter, 30,000 followers on Instagram and 200,000 followers who have checked in on Facebook. RocoMama is a South African restaurant that serves a variety of burgers and their social media message is trendy: ‘we are not normal’. Their social media marketing is incredibly active with vibrant pictures, witty posts and instant interaction with customers. Their overall marketing strategy is closely aligned with their social media strategy. They have created a successful hype about their products on social media, used user-generated content and targeted youth on social media. All of these resulted in increased sales.
Winning Social Media Techniques for Increasing Sales
As a business owner, you should also know how to generate more sales, increase your market share, gain more customers and engage more with your audience. Social media marketing is your magical tool for this. There are many techniques and strategies that can be implemented especially for SMEs. These strategies are as follow:
- Study Your Audience
- The Right Platform
- Use Paid Campaigns
- Use Social Media Influencers
There are other startups in South Africa which have been similarly successful in increasing their sales through social media. Once these SMEs became successful, they were also able to expand operations in international markets. A challenge commonly faced by these companies while they are expanding is the difficulty of adapting to a different culture and language. Different markets speak different languages and perceive marketing tactics differently.
Therefore, it is very important to hire marketing translation services. Marketing localization plays an important role in ensuring that your brand’s message is adopted and accepted appropriately in the new market. What works for one market may not work for another. Therefore when targeting international customers, you have to ensure that you speak their language and your marketing appeals to them while paying attention to the cultural differences.
South African Companies That Are Taking On the World With Localization
There are many notable companies in South Africa which started off small but quickly became successful and expanded their operations in international markets with the help of marketing localization and translation. Localization helped these companies to recreate their marketing message to appeal to the new international markets and as a result, it increased their sales by reaching new customers. Here are two examples.
Founded in 2013, Mimi Women is a South African brand of sanitary pads. It aims at empowering women and young school-going girls especially from disadvantageous backgrounds who are often held back from going to work and school because they don’t have access to sanitary pads. Mimi Women gas helped more than 32000 school girls through donations of sanitary pads. The brand is getting funds to create a R10 million worth of manufacturing plant and expanding operations in the African continent.
Quicket is an example of a successful South African startup that is going big! Co-founder, James Tagg founded it in 2011. It is a payment platform for South African events and it is now working on partnership in Uganda to operate there. James Tagg said that the biggest challenges he faced were around the legal structure for co-operation and in building a cohesive payment layer which binds all available payment channels in the region. He openly advises startups looking to expand in other countries to first fully understand and embrace the nuances of the different markets.
Founded in 2017, Afritorch Digital helps research agencies in conducting market research through its knowledge of the African continent and the use of the latest digital technologies. The company has become quickly successful by helping clients in their research on marketing in South Africa. Their digital tools became so popular that many research agencies are lining up to make use of their services. Afritorch Digital works with research agencies that conduct research on behalf of their clients.
Now they are taking their operations global. Localization and marketing localization has greatly helped Afritouch Digital and such companies in expanding the operation and reaching out to new clients who use different languages.
Ways to Expand Inside South Africa
Any company that wants to start a business in South Africa must know the languages that people are speaking. In South Africa, besides English, there are 3 top languages spoken; Zulu is spoken by 23% of South Africans, Xhosa is spoken by 16%and Afrikaans is spoken by 14%.
Companies expanding their operations in South Africa should ensure that their website should be localized into these three languages so that they can reach and connect with the customers. When customers visit a website and are able to read about a product in their own language, they are more likely to purchase the product. This will increase your sales.
Choosing the Right Translation Partner
Hiring a trusted website translation service provider can help you to achieve your goal. It is important to choose a professional translation company like Afrolingo that understands the South African market well enough to translate your website accurately. Afrolingo offers high-quality translation and localization services to businesses that want to truly connect with the South African market in its language and through its culture. Afrolingo has worked with hundreds of clients globally and successfully offered its localization and website translation services.
Get in touch today to get a custom quote for your project. We work on projects of all sizes.