Starting a business requires a great deal more than just passion. SA has one of the highest business start-up failure rates in the world, according to the most recent Global Entrepreneurship Monitor (GEM) report. Unfortunately, many South African small business-owners realise too late that a venture can only stay afloat if there are some fundamentals in place.
Clearly more needs to be done to help businesses survive - especially given how critical they are in the SA context. Paula Barnard, Acting Head of Sanlam Foundation says of the SME sector, “This sector is the saving grace for economic reform as government spending will shrink and corporate SA also needs to be agile to compete with international competitive forces. A vibrant and successful SME sector will create future opportunities for business in terms of catalysing more financial needs to fulfil and increased job creation.”
Real-time advice from those in the front line
The question is how can business-owners get ahead? Tapping into the experience of those who have defied the odds and built successful businesses is invaluable. So, Sanlam spoke to a local business to find out how they navigated some tough times along their 25-year journey and managed to turn a struggling business into a thriving player in the auto industry, today employing 18 people.
Family members Pam, Dougie and Dustin George are co-owners of D&P Auto Works. They’ve been part of the Sanlam Enterprise Supplier Development Programme, which supports the strategic growth and development of small and medium enterprises, and here, they share their four top tips on being successful business-owners.
- Vision and values: Setting out the vision, mission and values of your business is a critical step in ensuring strategic direction - without this, distinguishing what sets your business apart from others can be difficult. Getting these bedded down will guide many key decisions such as hiring the right people, handling challenging situations and successfully planning business expansion.
- Fix your finances: Structure and regular financial reporting are vital in any business so ensure you have these in place. Often, financial admin is neglected, but it is of the utmost importance as this will ensure you always know what’s happening in your business. Barnard adds, “Many business owners only look at the cash in the bank account of the business and they ignore the cash flow status and projections. Cash flow can be severely tied up in the debtor’s book and stock.”
- Prioritise people and organisational structure: For the Georges, one of the most important elements has been to create performance contracts and do regular assessments for each staff member, including management. Regular staff meetings and training are essential, especially for industries that need to think about customer care.
- Do discipline: Establishing a sound structure and sticking to the organisational processes and policies you put in place is vital to the longevity of your business. This was an important focus point for us at D&P Auto. Proper structure was lacking, and this was one of the major changes we were able to introduce after joining the Sanlam Enterprise Supplier Development Programme. We were able to strengthen our foundation to allow for growth. Being on the programme helped us see what we needed to do to run things better. Working in the business, you sometimes forget to work on the business.
The reality is that every business is different, but getting the fundamentals right can play a significant role in ensuring a business remains sustainable, despite tough economic times. For business owners, this requires a commitment to applying some tried and tested principles in order to maintain and grow their business.