SA startups that survived 2016 “should be proud”

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South African entrepreneurs that managed to steer their business through 2016 should be proud of their business acumen as it was one of the toughest years in decades.

That is according to Gerrie van Biljon, executive director at risk finance firm Business Partners, who says South African small and medium enterprise owners had a tough year because of economic reasons and other factors influencing business activity levels.

“Looking at the fluctuations in the rand value as an example, this year the country has seen the direct effects of political instability and global factors on the exchange rate, which have sent the rand tumbling a few times. Entrepreneurs need a stable environment in which to operate,” he said.

Since the global downturn in 2008, entrepreneurs have been challenged from almost every angle, van Biljon said. Those who survived these last couple of years should be proud of their business acumen. Business acumen really is the key phrase. It is shown by the way you act and the decisions you make. For example, if you are sales-based then you are likely to utilize sales management dashboards to help you track data and information.

“Entrepreneurs have had to introduce severe measures such as realising assets and introducing cash into the business, as well as cut back on expenses including their own pay or adaptations to their business model,” he said.

Van Biljon said one of the major challenges for business owners is their level of confidence in the market, with the most recent Business Partners Limited SME Index survey reporting a drop in business confidence levels and consumer hesitance to commit.

“It is encouraging, however, that even in these turbulent times, entrepreneurs were able to find new business opportunities – most likely owing to their characteristic positive outlook, vision, passion and their ability to identify new markets,” he said. “The population is growing, technology is enhancing and buying patterns are changing, and entrepreneurs can and do capitalise on this.”

The advantage SMEs have always had over bigger businesses, van Biljon said, is that they can move and adapt swiftly.

“Entrepreneurs have been exposed to extreme business conditions and many have managed to survive and even grow their business empires in the last year,” he said.

“They can change the outcome of what is under their control. They may decide to change the business model, introduce new products or move into new markets.”

While 2017 will undoubtedly pose new challenges for SMEs, van Biljon said their focus should remain on cutting costs and cash flow management.

“Tight control should be a priority, but finding and securing market share cannot be neglected either. To offer outstanding customer service is not negotiable since clients’ expectations are high and unforgiving of sloppy service levels, regardless of the circumstances,” he said.

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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