Incub8 Magazine Edition 2

STARTUP AT AGE 24

EMPLOYS 22 PEOPLE:

14

STEPS TO BECOME A FRANCHISE OWNER

Gladys Mawoneke ▼

Who is Carol Masevhe?

7

KEY FUNDING QUESTIONS ANSWERED

HOW HER BEVERAGE MADE IT TO SA’S RETAILERS WOOLWORTHS, PNP AND SHOPRITE CHECKERS

6

Things to consider when preparing a Business Plan PLUS • HOW TO RECOGNISE A GOOD ESD PROGRAMME WITH AMINA PATTERSON • THINGS TO KNOW ABOUT A SHISA NYAMA BUSINESS

www.incub8mag.co.za · Volume 2 · 2018

CONTENTS 4 Letter from the editor

26

6 Foreword 8

Leadership guest note

10 Contributors 12

1 4 Steps to become a franchisee

14 T he beverage that won the hearts of Woolworths and Anglo 17

20

er company is ISO certified H and calibrates equipment in 24 hours

18

rom enjoying coffee F aromas at coffee shops to owning a coffee bar

19

1 0 Essential components of a good ESD programme

22 7 Key funding questions 24 4 Key technology tools small businesses must use 26 9 Enterprise compliance questions 28 A winning business planPart 1 30 Y outh entrepreneurs win prizes valued at R1,5 million 32 F rom a start-up to a $100 million venture 34 T he ins and outs of Tso’s Chesa nyama 36 S tart up at age 24, employs 22 people 39 Directory

20 P aint and Cement giant's ESD for township SMEs

35

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DON’T CHASE OVER YOUR LOSSES CHASING OVER WHAT YOU LOST MAY LEAD TO ADDICTION

STICK TO YOUR BUDGET

WARNING SIGNS OF PROBLEM GAMBLING

• Becoming agitated, aggressive and abusive to others • Spending prolonged hours gambling • Frequenting the ATM,Cheque Cashing Facilities and Borrowing money • Neglecting your family and friends for Gambling activities • Frequently being found on Gambling premises.

HELP AVAILABLE FOR PROBLEM GAMBLING: Free Self -Exclusion Service - The Gauteng Gambling Board and gambling operators in gauteng offer free self-exclusion services where a gambler may request to be banned from entering any gambling establishment in Gauteng or nationally. Contact the Gauteng the Gauteng Gambling Board on 011 581 4800 or visit the nearest gambling outlet to request for this service.

Free Treatment and Counseling Service - A problem gambler and their affected loved ones can receive free counseling and treatment services through the National Responsible Gambling Programme. Call the problem gambling helpline on 0800 006 008.

WINNERS KNOW WHEN TO STOP

LETTER FROM THE EDITOR

EDITOR'S NOTE B

usiness owners have to acknowledge and embrace that the manner in which business is conducted has changed drastically over the years and more so in recent times. To a great degree this change has been for the better but there have been developments and options which have made it more complex for traditional businesses. At the centre of these complexities is technology, the speed of change and the open flow of information. One’s competitors are much closer now than ever before because of the internet and its resident components such as social media and mobile applications. So, in simple terms, businesses that ignore these market changes and the power of information technology do this to their own detriment.

It is important for businesses to develop digital strategies which respond to these market dynamics. I can safely say that all business owners who run business that do not have digital marketing strategies or do not plan to have one do so to the peril of their establishments.

Disruptive technologies are a clear indication that times have changed and this requires innovative ideas and a greater level of flexibility. The advent of digital media is a wonderful opportunity for small businesses as they have the ability to change much faster than big businesses.

Interestingly, this has also levelled the playing field by a great margin. This is so because winning businesses will be the ones that are most innovative and not just businesses that are known as a result of the many years they have existed 4 www.incub8mag.co.za · Volume 2 · 2018

or because they have fancy artefacts. In fact businesses that are already showing great success are those whose sole existence is based on their zeal to change the face of the market.

Looking at customer behaviour in the past, it is way too different than what it is today. The customer of today pays more attention to the quality of service, their entire experience with the company, the quality and frequency of communication and product quality. They also need a much closer interaction with the companies they choose to do business with. This may not necessarily be physical interaction but rather efficient technology systems and processes.

This is proof that the way we do business has indeed changed and as business owners we must change with it. I have seen a number of businesses who remain extremely conservative and refuse to conform to the current dynamics and many are facing their demise. As we wrap this second edition of Incub8 Magazine I am delighted that we aim to provide empowering content and it is with great pleasure that we will continue to bring you tips and answers to fundamental business questions.

Enjoy!

Saki Mabhele

FOREWORD

KEY LEADERSHIP LESSONS FOR GROWING BUSINESSES Leadership is different from management.

It is about seeing ahead what others cannot yet see.

I

t is about vision and inspiration, and, ultimately, about influencing others to do what you want them to do because they are willing to do it.

“Leadership is influence,” says author and life coach John C Maxwell. This statement applies to all aspects of life including, particularly, in respect to small businesses. Given that most small businesses fail within the first three years of their lives, it is important that the founders acquire relevant leadership skills to be able to direct the vision of the business. This starts by leading self, ensuring that there is mastery not only of the skills and expertise required of the business, but also of the strengths and weaknesses of the founders.

It is about vision and inspiration, and, ultimately, about influencing others to do what you want them to do because they are willing to do it.

“Leadership is influence,” says author and life coach John C Maxwell. This statement applies to all aspects of life including, particularly, in respect to small businesses. Most small businesses fail within the first three years of their lives, therefore, it is important that the founders acquire relevant leadership skills to be able to direct the vision of the business.

This starts by leading self, ensuring there is mastery not only of the skills and expertise required of the business, but also of the strengths and weaknesses of the founders.

By mastering self, the founder of a small business is able to discern how far they can take the business before bringing someone else into the management team to take it to the next level. This is to avert one of the key mistakes small 6 www.incub8mag.co.za · Volume 2 · 2018

business founders make, of thinking that just because they are the ones with the business idea or innovation, they are the ones best equipped to take the business through all its stages and eventually to profitability.

Small businesses hold a significant position in the development of our country.

They are key drivers for job creation, innovation, and economic growth. Given that some of the top challenges they face include access to finance, markets as well as skills, leadership is therefore important for small businesses to help navigate the business through uncertainties that arise.

As a leader of a small business, you have to look beyond the day to day issues of managing the business, which often tend to be subjective, and take a long-term outward view of what the business really needs.

Management tends to focus often on what the business wants, owing to the daily pressures. In soliciting funding to take the business to the next stage, the focus should be on how your business aligns with the prospective funder’s mandate and the value that the funding will provide to your business, and being able to clearly articulate these, such that you are able to influence the funding decision.

As access to markets is a major factor of whether businesses succeed or not, as a leader of a small business, the focus should be on what value your offering provides to the end user or customer and communicating this value. It is not only about communicating the problem that the customer faces with other competitive existing products or services and how your offerings overcome that, but having the ability to make the customer see that for themselves.

McLean Sibanda It is about influencing the value chain, and ensuring real market capture. It is about influencing your customer to choose your offerings each time without much hesitation. This is also an area where real business leaders understand the value of branding, such that the brand provides a distinctive market differentiation.

In the case of skills, often talent follows leaders and not just the business. It is about communicating to the talent the value of being part of your business and the opportunities they will have than in another business. It is often said that talent follows leaders more so than the salary. In essence, the leadership ability of business founders and owners acts as a catalyst that makes all elements of the business work together. Without leadership all the other business resources lie dormant.

Leadership plays an important role in identifying opportunities, setting and navigating the path for a business vision.

This ensures that the business can easily adjust to forever changing environments in today’s fast paced business world. The saying that “Without a vision the people perish” is applicable to leadership and small businesses in that, without visionary leadership, a small business is more likely to flounder and eventually fail.

In conclusion, while a business might sometimes seem like a living, breathing thing with a mind of its own, it cannot grow by itself. It takes a leader with a passion to give the business vision, translate that vision into a roadmap, mobilise resources, inspire market confidence and attract the right partners.

Growth cannot happen in the absence of leadership. 

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INVESTMENTS I SAVINGS I PROTECTION

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LEADERSHIP GUEST

Small business opportunities at Standard Bank A platform for entrepreneurs to get a boost in starting up.

Jayshree Naidoo is the Head of Standard Bank Incubator

"The Standard Bank Incubator runs start-up bootcamps, where entrepreneurs like yourself can validate their business ideas at no cost to them."

I

n the dawn of our struggling economy, our greatest hope lies in the hands of the budding entrepreneur who is the catalyst of change that is required in South Africa. With the growing levels of unemployment in the country, the need for job creation is at the forefront of the country’s attention. Entrepreneurship has the power to change the landscape of our country by not only creating these much needed jobs but also contributing to the country’s economic growth.

It is evident that our country’s greatest assets are our entrepreneurs, especially our young entrepreneurs. Youth dynamism and ability to think out of the box gives you the ability to shift the dial radically. But it may seem like a daunting task to navigate the complexities of the world of business. You’re often left wondering: Where do I start? Who do I talk to? Who can assist in developing my business?

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It is always a great idea, when thinking about starting a business, to go through a process of validating your business idea. In this process you will gain an understanding of the potential demand for your product or service as well as test any assumptions you may have regarding your product or service. Customer interviews are ideal at this stage. Their responses and the insights gained from those responses will allow you to validate the product or service and design a customer value proposition that addresses your potential customers’ needs.

The Standard Bank Incubator runs start-up bootcamps, where entrepreneurs like yourself can validate their business ideas at no cost to them.

Once the business idea has been validated, the process thereafter is easier. Among the offerings of the Standard Bank Incubator are acceleration programmes that are designed to assist your business to grow and move to the next level. Through this process you will also gain access to markets, access to funding and access to resources needed to sustain your business.

An entrepreneur’s strongest weapon is their network, and that is the reason the Standard Bank Incubator hosts monthly networking events in Johannesburg, Cape Town and Durban. These events will provide you with the opportunity to connect and establish relationships with entrepreneurs in your industry and in complementary industries.

Other opportunities to engage include: • Thought Leadership • Mentoring and Coaching • Leadership Development and Facilitation

Bringing Children Home.

Building People of Character.

Bridging a Better World.

Door of Hope are on a mission to break the cycle of poverty and abandonment for thousands o f children in our land.

The great Nelson Mandela said: we m ake i n the everyday l ives o f children.� Door o f Hope a re m aking company can be a part of making that

Find out more at www.doorofhop e.co.za or email: info@doorofhope.co.za

CONTRIBUTORS AMINA PATTERSON

YOLELWA SIKUNYANA

Amina Patterson provides Edge Growth with a range of insights and experience. This is combined with her passion for B-BBEE and strong client engagement skills.

She inspires her team members and colleagues as she opens doors to global business networks and continues to grow market presence.

Yolelwa Sikunyana is the founder and director of Sikunyana Incorporated Attorneys situated in Midrand, Gauteng. She has over 13 years’ experience as an in house legal counsel and has worked for both the private and public sector, in companies such as Ekurhuleni Metropolitan Municipality, Tasima, SABC, BP SA and Transnet SOC.

Patterson graduated from the University of the Witwatersrand in Bachelor of Commerce Accounting in 2011.

She holds an LLB from Vista University, a PG Dip in Drafting and Interpretation of Contracts and a Certificate in Compliance Management both from the University of Johannesburg. Curretly studying for LLM in Law of Contract at the University of Pretoria, Yolelwa also holds a Certificate in Advanced Company Law Certificate.

SASHA-LEE DE BOD

CHAMP THEKISO

Sasha-Lee de Bod has been employed by Franchising Plus since 2015, as a franchise consultant, and has worked on commercial and social franchise projects as well.

Through this organisation she has also been exposed to a supplier development mentorship programme for small businesses.

Champ Thekiso is a Chartered Accountant and has spent over 10 years working with and for SMMEs. He is the founder of Thekvest Group (Pty) Ltd, which focuses on investing in high growth potential SMMEs and Advisory Services (i.e. legal advisory and economic inclusion solutions). The Group has interests is in different industries, namely, Agro-processing and value add product to financial services. It is also exploring investments in steel structuring, technology and renewable energy.

She achieved her Bachelor of Commerce Honours Degree in Marketing and Entrepreneurship with distinction at North-West University in 2014, prior to that, an undergraduate Bachelor of Commerce Degree in Entrepreneurship and Business Management, also with distinction, and an NQF Level 5 Project Management qualification. She recently completed a course on managing franchisee performance as a field service consultant.

During her studies she consulted for some companies, and was exposed to various industries. Her key strengths include project planning and management, marketing, research, analysis and creative construction or compilation of formal documents.

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Champ has extensive experience in stakeholder engagement, local procurement, economic transformation and social performance mostly within the resources sector. He has been an advisor and has served as trustee on various boards.

Patterson graduated from the University of the Witwatersrand in Bachelor of Commerce Accounting in 2011.

PUBLISHER'S DETAILS Publisher Publishing Editor

PAPASHA MEDIA (PTY) LTD Sakhumzi "Saki" Mabhele 1 York Street, Kensington B, Randburg 2194 Tel: 0861 744 674 Fax: 0866 11 44 78 saki@papashamedia.co.za

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info@papashamedia.co.za Tel: 0861 744 674 Fax: 0866 11 44 78 www.papashamedia.co.za Facebook page: @incub8Mag Twitter page: @incub8Mag

TERMS AND CONDITIONS OF USE / DISCLAIMER Incub8 is a product of SAKIPRINT CC. 1 York Street, Kensington B, Randburg, 2194. Incub8 (ISSN No. 2520-9248) considers its sources reliable and verifies as much data as possible. However, reporting inaccuracies can occur, consequently readers using this information do so at their own risk. Incub8 is sold with the understanding that the publisher is not rendering a legal or advisory service.

Although companies and contributors mentioned herein are believed to be reputable, neither SAKIPRINT (Co. CK2002/063910/23), nor any of its employees, sales executives or contributors accept any responsibility whatsoever for such persons’ and companies’ activities. SAKIPRINT CC. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form without prior written permission of the publisher. Permission is only deemed valid if approval is in writing. Incub8 buys all rights to contribution, text, images unless previously agreed to in writing.

Stock images supplied by Shutterstock.com

Volume 1 · 2018 · www.incub8mag.co.za 11

FRANCHISING

14 STEPS TO BECOME A

FRANCHISEE Franchising is not for everyone, as it involves a particular mind-set and attitude. The attributes might differ for various franchises in different industries.

T

he thought of investing and owning a franchise has been running through your mind for a while; with questions such as: How can one obtain a franchise? What are the requirements? What are the timelines?

How does the process work, and how much money does one need? In this article, we cover the 14 key steps in establishing a franchise, to assist you through the process and to put your mind at ease.

1. CAN I BE A FRANCHISEE? A franchisee is an independent, entrepreneurial-minded individual with a burning desire to succeed in a business of their own. They need to be sales driven, hardworking, resilient and be able to conform to set standards and operational procedures. If your mind is set in a way that working for yourself allows you to “custom design” your business, then maybe franchising is not the right option for you, as you will feel trapped and not be able to be as innovative as you want.

2. RESEARCH Research exists on most steps of becoming a franchisee. You would need to look into a few industries that appeal to you and that you may have experience in, and do some very diligent research on the franchise concept you choose in that industry. Look into its market potential and how the franchisor assists you in your business, what the minimum requirements are and evaluate the legal implications

before you invest your money. The type of research recommended includes: • talking to the franchisor about the concept • talking to existing franchisees to find out what their experience with the concept and with the franchisor has been like • ask the franchisor to provide you with their franchise disclosure document and draft franchise agreement to better understand what they do as well as the rights and obligations of both parties should you decide to invest 3. SET YOUR BUDGET It is a big step from deciding to start a franchise to actually opening your doors for business. For many, one of the biggest hurdles is approaching the bank for finance. Generally, in franchising, most franchisors require 50% cash deposit and the balance can be funded by a financial institution. It is a lot easier to get a loan to purchase a franchise as banks have learnt that it is safer to lend to franchisees of well-structured

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FRANCHISING

ethical franchise systems than a start-up business with no track record, therefore the track record of the franchisor is very important.

further information about what it takes and what is needed to be a franchisee for their brand. Each franchise has its own profile for their ideal franchisees.

4. CHOOSE A FRANCHISE INDUSTRY There are various franchise industries in South Africa which include but are not limited to: • Fast food and restaurants

7. MEET WITH THE FRANCHISOR AND FRANCHISEES When you meet with the franchisor and franchisees you need to be prepared.

Some of the questions you should ask

• Retailing • Business-to-business services • Childcare, education and training • Health, beauty and body culture

existing franchisees are: • Is your franchise profitable now?

• Is the franchisor aware of changes in the marketplace and how quickly do they adapt?

• What kind of ongoing support do you get?

• Did you get good training, systems and manuals?

• Is the franchisor keeping their end of the bargain?

• How long did it take to recoup your investment?

• Does the franchisor welcome suggestions from franchisees?

➚ Visit www.whichfranchise.co.za for many more industry options and franchise opportunities.

5. CHOOSE A FRANCHISE Nobody can really advise what the best franchise would be for a person. You would need to do research on all concepts to decide which franchise would be the best for you with regards to the financial investment required, the type of work you want to do, location, the business model which best suits you, the relationship with the franchisor, your requirements from the business etc. A good franchise investment can give you a return on your investment within roughly 3-4 years, after you have drawn a market-related salary.

6. APPLY TO FIND OUT MORE FROM THE FRANCHISOR You would need to make contact with the franchisors of the relevant concepts you are interested in, for them to give you

8. GET A COPY OF THE LEGAL DOCUMENTS You need to get a copy of the Franchise Agreement and Disclosure Document. A Disclosure Document is a detailed prospectus with financial information and projections about the opportunity and franchise – this will help you make an informed decision.

10. APPLY FOR FUNDING All the major banks have dedicated franchise divisions that can assist you.

Other institutions also offer finance for franchise opportunities.

11. SIGN THE FRANCHISE AGREEMENT Once you and your franchise legal representative are comfortable with the terms in the Franchise Agreement, you will arrange to sign it and make payment as required in the agreement. By law, you have a 10-day cooling off period in which you may cancel the agreement.

12. SIGN LEASE AGREEMENT AND PAY RENTAL DEPOSIT Ensuring you have the right location is vital to any franchisee’s success. The franchisor must work closely with you in selecting the best possible site to position your business.

13. HIRE STAFF AND ATTEND TRAINING FOR YOURSELF AND YOUR STAFF In order for franchisees to be successful at running their business, they need well-structured and informative training courses. The majority of franchisors have put a training programme in place for new franchisees. It is the franchisee’s duty to then train their staff with their knowledge if the franchisor does not provide this.

14. OPEN YOUR FRANCHISE BUSINESS Welcome to the franchising world – you can now operate your own business under the umbrella of a reputable brand. 

9. TAKE 14 DAYS TO REVIEW THE INFORMATION It would be wise to ask an experienced person in the finance, legal and/or franchise consulting field to help you review the information.

Sasha-Lee De Bod

Volume 2 · 2018 · www.incub8mag.co.za 13

COVER STORY

THE BEVERAGE THAT WON THE HEARTS OF WOOLWORTHS AND ANGLO After several attempts to start a business, it finally clicked that research is key in identifying the right business idea.

BY SIZA MTIMKULU

T

o suggest that Gladys Mawoneke of Cape Town was born to be an entrepreneur would not be far-fetched given what she had to go through to be where she is today as a businesswoman. She grew up in a family of entrepreneurs as her parents owned a farm. So, the seed was planted from watching them go about their business from a very young age. “I was born into an entrepreneurial family,” she says fondly. “My parents were farmers and they encouraged us to be entrepreneurs. Throughout my life as I was growing up, I knew that at some point I was going to start a business and become an entrepreneur.”

When it came time to embark on making her destiny a reality, Mawoneke started by sampling three business ventures that failed with each attempt until the right one finally manifested. Her first one was a small company that made amasi (sour milk) but had to unfortunately cease operating as she soon learned that selling unpasteurised milk was not permitted in the district of Cape Town. Her next venture was a business that sold different and unique types of bread and again, had to close down as the sales were not doing well due to overpricing, even though the bread was beautiful to look at, as she says.

It was while pursuing her third business attempt (selling fruit and vegetables)

that the idea of making a non-alcoholic beverage struck her. This one had to go through rigorous tests and research before being deemed feasible, and all these previous failures were lessons which taught her about perseverance, preparation and that her destiny was in her hands. Through this whole experience she also discovered something very important; that she had pursued business ideas without first doing a feasibility test.

The realisation spurred Mawoneke to take the concept of a non-alcoholic beverage to the IDC (Industrial Development Cooperation), and they were impressed. She was then given a grant to do research. “We did a feasibility study to try and understand if there was a need for a product of this nature in the market place, and also, to try and understand the beverage repertoire of the consumer that we are targeting,” she explains.

Quantitative research was done through a reputable market research company and advertising agency. “The feedback was very positive with people saying finally there is a drink for me. Breva (the name of the product) makes the adult who doesn’t drink alcohol not to feel alienated from the social norms when they are out and about.

It is a drink that they can drink comfortably and that allows them to experience a brand that speaks to their image.”

Mawoneke’s company is called Booming

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Hills Group and she is the managing director. They manufacturer and bottle Breva Beverages – soft drink targeting adult non-alcoholics who are conscious of who they are and what they represent in society. Through market research she discovered that about 65% of South Africans do not drink alcohol, which is primarily the Breva target market. “Within that market there are people who have never consumed alcohol, and they have a sweeter pallet so you will find that the four variants of our beverage that we currently have – apple, passion fruit, peach and pineapple – are slightly sweet,” she explains. “However, within the same category of non-alcohol drinkers there are also those who used to drink alcohol and they have a dry pallet. Our product tries to cater for both markets – people who used to drink alcohol and those that never drank it before.” In line with catering for its target market, Breva is also packaged in what is traditionally perceived as an adult bottle – a green bottle with a twist off crown cap.

The company currently has seven employees. It is guided by the principle that the focus of the business should be on what is core to it, which is, to come up with innovative solutions for its adult consumer and to market and sell them.

Whatever is not core is outsourced at low cost.

COVER STORY

“We did a feasibility study to try and understand if there was a need for a product of this nature in the market place, and also, to try and understand the beverage repertoire of the consumer that we are targeting.”

Gladys Mawoneke

Volume 2 · 2018 · www.incub8mag.co.za 15

COVER STORY In terms of business incubation, Mawoneke believes that were it not for incubation Breva would not be where it is today. “Given the inequalities that still exist in our commercial environment its absolutely necessary that businesses are incubated,” she says. “It’s absolutely necessary for small businesses especially in order to allow them to thrive and enter the market place.”

Following the research, Mawoneke took the results to retail outlets, and the first one she approached was Woolworths, which saw the opportunity for the beverage and even funded it. She also approached Anglo Zimele and they also fund the business.

Soon after, in October 2014, the production process started. Breva went from zero to six-digit revenue, which is where it is today.

Before taking the product to Woolworths and Anglo Zimele this determined businesswoman, however, struggled with raising start-up capital. It was a very challenging, catch-22 situation as financiers wanted to see a balance sheet before they could consider funding the business. To aspiring entrepreneurs, take cognisance of this as it means using your own funds to start a business is critical in demonstrating to potential funders your seriousness about your business.

Speaking of money, one lesson Mawoneke has learned and would like to caution other budding entrepreneurs about, is not to use money as the motivator to run a business. Your reason should be beyond money because if you focus too much on it you will not wake up one morning. “There are days on a small business person’s life when there is no money,” she cautions. “So, whatever your aim is (other than money) in running your business, must be reason enough for you to wake up every morning.”

With regard to transformation Mawoneke believes that the government has been very supportive to entrepreneurs through legislation and programmes that are accessible through the department

Mawoneke’s five tips for small business owners? ✔ Cash-flow is king

5

✔ Balance your growth vs your available resources

✔ Surround yourself with mentors ✔ Know how to play the game.

The country we are in is still consumed by various challenges that will require new entrants or emerging businesses to know how to play the game, and which is not political ✔ Being a business owner is not romantic, it requires a lot of work. There are plenty of challenges and you have to persevere.

of trade and industry. However, she also feels there is still a long way to go as “the economy of South Africa is controlled by few” therefore mind sets also have to change for transformation to be effective, especially for the benefit of Black people.

“We cannot only depend on government legislation,” she says. “We also have to change our mind set for transformation to be felt.” She believes that the manufacturing industry is a long way from being transformed particularly due to women being a minority in this industry.

“As we transform we must be careful that we see transformation as actually taking

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place in the small business sector, otherwise we are forever going to remain small businesses. We have to consciously think beyond being small businesses and play with the big boys because that’s where transformation happens.”

In terms of long and short term projection Mawoneke sees Breva in five years as a household brand in SA and in 10 years’ time, a household brand in the African continent. “While we are trying to enter the global market, we would like to start by focusing on the African market because this is where you can find a substantial pool of people who do not drink alcohol and also an emerging middle class that is looking for brands that speak to their image,” she says. “In Africa there is growth potential for soft beverages so we want to take advantage of the growth so that in the next 10 years we become a brand to be reckoned with in the continent.”

Her words of advice for those thinking of starting a business are: Go for it. She says she truly believes that once you dream of an idea then a quarter of your battles have been fought because now at least you are dreaming. The next step is to execute your dream into reality.

During her leisure time this “sucker for romance” says she loves watching movies with romance storylines and also loves cooking. He favourite dish is Tilapia fish. 

“As we transform we must be careful that we see transformation as actually taking place in the small business sector, otherwise we are forever going to remain small businesses.”

START UP

HER COMPANY IS ISO CERTIFIED AND CALIBRATES EQUIPMENT IN 24 HOURS

S

eola Mashamaite, the entrepreneur behind Montech Calibration Services (Mon-Cal) – an ISO 17025 SANASaccredited calibrations laboratory – grew up in Limpopo with her grandparents until she was eight when both of them passed away within months of each other.

This proved to be a defining moment in her life and gave her the strength and determination to follow her dreams of making a success of herself.

"Calibration companies are notorious for their poor turnaround time.

However, we offer calibration to customers within 24 hours of receiving equipment and issue certificates on site" Seola Mashamaite

The company which Mashamaite founded in 2014 provides reliable calibration services for humidity and temperature equipment (including chambers, incubators, data loggers, thermometers and room validation) across all industries. This businesswoman from Limpopo studied Chemical Engineering and says her curious nature led her to her current field.

“Whilst working for one of the major chemical production companies, I came across an advertisement for a metrology internship and I had no clue what it was. I did my research, applied for the job and got it in 2008,” Mashamaite explains. “That was the start of my career in the metrology field.” She then worked her way up in the company and ended up heading the laboratory.

While Mashamaite was making great strides in her career, this company was unfortunately liquidated. Not to be deterred, she opted to use the experience she had acquired to start her current business, Mon-Cal. The businesswoman says while making a living, her family motivated her to start the business, her ultimate goal has always been to change the face of the industry

and her personal goal is to be able to give students or people from rural areas exposure to industries like this.

In a short space of time, Mon-Cal has built a good reputation for itself When asked what sets her company apart, Mashamaite says, “Calibration companies are notorious for their poor turnaround time.

However, we offer calibration to customers within 24 hours of receiving equipment and issue certificates on site.”

Like many business owners, Mashamaite admits that she continues to face challenges as an entrepreneur, including not getting funding and dealing with a variety of tasks. Fortunately, this has not dissuaded her – her future plans include expanding the business service offering.

“Offering multiple disciplines will allow us to become a one-stop calibration house for most of our clients,” she says.

Recently, Mon-Cal made Riversands Incubation Hub its home to access the wide range of services the business incubator provides. Mashamaite has since set up two calibration chambers in her premises and is confident of a bright future. In 2016, she came second in the 702 Hyundai Start-Up competition, which gave her a boost. 

Volume 2 · 2018 · www.incub8mag.co.za 17

START UP

FROM ENJOYING COFFEE AROMAS AT COFFEE SHOPS TO OWNING A COFFEE BAR

F

ounded by Elias Makhubo in 2014, Black Star Coffee Bar serves delicious coffee made from exceptional coffee beans sourced on the African continent. The coffee shop also sells packaged coffee beans, fresh muffins sandwiches and other treats. While the company was established in 2014, it officially opened its doors on 19 August 2016. Makhubo says it was a dream come true as a lot of hard work and sacrifice has gone into the shop.

So how did Makhubo get into the coffee business?

“I used to spend a lot of my time sitting in coffee shops, working. I started to love and appreciate coffee aromas and flavours and asked what’s special about coffee,” Makhubo explains. But it didn’t stop there as Makhubo started doing extensive research on coffee and its origins. His fascination grew stronger as he discovered that Africa dominates the market when it comes to countries that produce the best coffee and he wanted to be involved in the industry. He then came up with the idea of starting a coffee shop which he initially named Grab a Cuppa, but as time went on, it evolved to Black Star Coffee Bar. This entrepreneur admits that his journey hasn’t been easy. “There’s been a lot of scepticism and naysayers, saying it won’t work, but I had a dream which started in 2014 - it took a long time and I had to keep on refining it,” he says proudly.

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He says he is pleased with what the team has created in terms of the look and feel of the coffee shop. “Everything was done in-house and carefully thought out. I wanted the coffee shop to offer a total experience and reflect a bit of who I am, hence we have a bookshelf,” Makhubo explains.

Natural-born risk-taker The businessman describes himself as a risk-taker. He is a qualified engineer and worked in the mining industry for many years.

He then went back to study and pursued a career in brand management and became the brand manager for one of the leading watch manufacturers, the Swatch Group. He later studied again and found himself in the financial industry and in construction. “And now I’m a coffee connoisseur,” he laughs. “Information fires my passion – I have a thirst for knowledge and since I’ve moved from different industries and have done a lot of studying, I’ve realised that nothing is impossible,” he explains. He also advises everyone to always be open to learning and trying new things.

The entrepreneur now has his sights on growing Black Star Coffee Bar into a reputable and trusted brand nationally. 

"I have a thirst for knowledge and since I’ve moved from different industries and have done a lot of studying, I’ve realised that nothing is impossible" Elias Makhubo

ESD PREP

10 B

ESSENTIAL COMPONENTS OF A GOOD ESD PROGRAMME

eginning an ESD (Enterprise

Supplier Development) programme is a long-term strategy. For it to be effective you need to have all the right components in place, including senior buy in. Consider this essential checklist of what a good ESD programme looks like, then make sure your potential service provider ticks all of the boxes.

Checklist: 10 essential questions to ask your ESD service provider before committing: 1. A practical and integrated strategy Your service provider has to deliver a strategy to define what success will look like, how it will be achieved, and how it will be measured. The strategy will also facilitate buy-in from stakeholders and must determine the eligibility of beneficiaries for the programme.

2. An implementable roadmap A roadmap will demonstrate how your service provider’s strategy will be executed – the resources and budget allocated to each initiative, and the time taken to implement. The roadmap will also prioritise which initiatives yield the greatest impact.

3. Long-term implementation partners What process does your service provider have in place to facilitate the identification, selection and onboarding of partners? It’s important that they are able to select a partner that will help your organisation achieve goals, ensuring that the

Amina Patterson

partnership enhances and adds value to your ESD programme.

4. Clear ESD change management process The right service provider will ensure that all stakeholders, internal and external, who are impacted by ESD, are educated about the plans. This will drive the right behaviours and encourage positive engagement, resulting in greater stakeholder buy-in.

5. Strategic sourcing and planning Your service provider should be able to evaluate your current and historic procurement spend to better understand it, as per strategic sourcing practices, and identify potential compliance gaps.

6. SME Selection and due diligence How does your service provider choose SME (Small and Medium Enterprises) beneficiaries for participation in ESD programmes? Selecting appropriate SMEs that are eligible for the programme will have a great impact on its success.

7. Customised finance solutions What kind of funding can be made available to SMEs by your service provider? Funding is critical to the success of most SMEs during their tenure on the programme, and often unlocks growth or removes constraints when most needed.

8. On-going incubation Your service provider should have some form of non-financial support to offer the SME, to aid the growth of

The right service provider will ensure that all stakeholders, internal and external, who are impacted

by ESD, are educated about the plans. their business. Tailored and on-going business development support is critical for assisting SMEs to grow and make a positive impact.

9. Supplier access to contracts This is about making contracting opportunities available to SD (supplier database) beneficiaries. Your service provider should seek suitable SD candidates that can fulfil the contracting requirements, while receiving business development support.

10. Programme management, monitoring, reporting and evaluation Does your service provider follow programme management best practice?

This ensures that ongoing monitoring, reporting, and evaluation takes place, assisting in maintaining your stakeholder buy-in.  Volume 2 · 2018 · www.incub8mag.co.za 19

Shan Naidoo

Paint and Cement giant's ESD for township SMEs A

unique empowerment initiative for township communities is about to be launched in Soweto by cement giant PPC, in partnership with Prominent Paints.

Called the Builders Box, this is targeting SMMEs (small construction companies), unemployed youth and homeowners who prefer the do-it-yourself approach to improving their home spaces.

The multipurpose container is set to

open its doors in April 2018. It will provide quality products, technical support and practical skills training to the community – helping address a critical skills gap and stimulating the local township economy whilst empowering individuals to make their building dreams a reality.

“While the Builders Box will give customers easy access to both our products and our technical expertise, the driving force behind this initiative is

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to empower people living here through skills development and subsequent job creation,” says Kevin Odendaal, PPC Executive: Gauteng Cement. “This builds on our company commitment to grow and develop our communities, country and continent.”

The Builders Box is a smart containerized solution developed by Africa’s Got-Game in collaboration with Prominent Paints and PPC Cement to address the challenges of inequality, unskilled youth and SMME development within our country.

The focus will be on township revitalization and growing the building and construction industry by delivering products and services to the doorsteps of communities. Formal building trade skills will be provided for unemployed youth and women, and local SMMEs will be empowered through the business support center. Customers now have a one-stop shop at their doorstep for any building or construction related solutions.

Both PPC and Prominent Paints will offer training and demonstrations at the centre.

The space will also be available to other training service providers as required.

“Course topics to be covered will include everything from basic budgeting and finance to practical building, and painting skills and demonstrations.

Customers will also qualify to attend training sessions of their choice by simply registering at the Builders Box,” explains Got Game Executive Shan Naidoo. “We used a community-centric approach by firstly understanding the needs of the community by ensuring that it was in sync with Government’s mandate for transformation. We then aligned the right corporate partners to meet those requirements. We also looked at a partner eco-system model where all stakeholders would benefit in the business model.”

Just as any new project, some of the teething problems the programme faced in the process of materialising were: securing funding and community key stakeholder buy-in as well as ensuring sustainability of the project. These were overcome through the process of engaging with the private sector to

5

TIPS REGARDING ESD IN ORGANISATIONS: 11. Be open to collaborating with other entities as long as there is shared benefit for all and the vision remains consistent.

participate in this township revitalization model which was quicker and more streamlined than engagements with some of the public sector entities. Ensuring that the key community stakeholders were engaged early within the project to gain their buy in and participation was also helpful.

“We had to look at a business model that primarily focused on social development but was commercially viable to ensure the center was sustainable. As social entrepreneurs, this is our strength which made our business case more appealing to our investors/sponsor partners,” adds Naidoo.

As such, the the infrastructure was initially funded by Prominent Paints and PPC Cement, but its operation is selfsustainable and is managed by Africa’s Got-Game. Other partners like Santam are allowed to engage as this creates additional funding streams.

In terms of increased job opportunities and entrepreneurs Naidoo avows that a huge impact has been made in skilling unemployed youth with both trade, computer and other basic skills. In collaboration with local SMMEs 200 job opportunities have been created just in the past three months. There is also bootcamp incubation training and opportunities for 20 SMMEs being provided. Since the programme was launched over 1 000 people have come through the Builders Box doors.

Naidoo explains that the aim is to strengthen existing partnerships and look for new partners to join this exciting journey. There is a national roll-out strategy for the Builders Box so that the initiative is in every major township.

They are also looking to start leveraging

21. Ensure that the initiatives are self-sustainable and not just a compliance ticking box exercise.

This can do more damage to the SMMEs, economy and industry eco-system.

31. Organisations need to streamline their procurement processes for SMMEs, cash flow and time which is not a luxury.

41. Organisations need to stay connected to SMMEs through monitoring, evaluating and advising to ensure that their processes and systems mature to a self-sustainable stage.

ESD OPPORTUNITY

African relationships and partnerships to implement the model in other countries.

“We are already in talks with Uganda, Nigeria, etc.”

He believes that in terms of ESD (Enterprise Supplier Development) opportunities in South Africa they are many. “As Africa’s Got-Game we just use a different approach, and that is, understanding the needs and demands of SMMEs and communities before engaging in any projects or initiatives. This has helped us maintain our unblemished track record and deliver similar solutions across industries like mining, retail, ICT, etc.,” he says.

“The Builders Box will give us an opportunity to contribute and provide solutions to the unemployment challenge that we face as a country,” says Lani Carstens, Brand Marketing Manager at Prominent Paints. “Our investment of over R300K will go directly towards providing sustainable long-term socio-economic upliftment in Soweto. This is what will ultimately define success for us.” 

51. Make the process easy and equally accessible to SMMEs, also provide alternative avenues and guidance to those SMMEs that do not make the final list.

Volume 2 · 2018 · www.incub8mag.co.za 21

FUNDING

7 KEY

FUNDING QUESTIONS Sourcing government funding and grants can be a worthwhile option for the boost needed to grow one’s business.

A

majority of entrepreneurs will

tell you that access to finance is their greatest challenge in starting a business. Many small businesses struggle to find start-up capital or financial support to expand their businesses.

The South African government is well aware of the importance of developing the economy, creating employment and attracting foreign investment. To make these goals a reality, there are grants and assistance programmes available from the government and associated organisations that assist to get your business off the ground and expanding.

What is the objective behind government funding agencies?

Much needed capital investment for a

business can be sourced from government

for application. Government funding is

funding opportunities. This opportunity was created to extend finances to previously disadvantaged South Africans, the purpose being to develop black entrepreneurs.

In addition, this enables enterprises to improve their competitiveness and sustainability, so as to be part of the mainstream economy, thereby reducing unemployment through community job creation.

linked with efforts such as black economic empowerment, job creation and overall developing the economy.

What are government grants?

This is when a project or initiative is awarded government funding for some or all of its financial needs. The business grants do not need to be repaid or accrue interest but have strict guidelines

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Are all grants in form of monetary or cash terms?

To the contrary, grants come in the form of financial as well as non-financial support. To ensure that the money disbursed is used correctly, the funding programmes also offer services that include entrepreneurship courses, mentoring and coaching, including networking opportunities, as well as financial planning and financial management, assistance with regulatory and legal compliance and links to strategic partners, just to mention a few.

FUNDING How easy or difficult is the process of applying for the grant?

There are a lot of important things you need to be aware of, such as strict criteria, plenty of paperwork and most likely, a very long wait. But in the end the waiting is worth the while. It is therefore, advisable to check which government funding and grants you qualify for.

While the government is one of the best sources of grants, the receiving business is obligated to spend the funds in a manner specified by the provider.

How does one begin the process of looking for the government grants?

There is a pool of funding agencies set up to cater for different sizes and needs of businesses. They are as follows: Department of Trade and Industry, National Empowerment Fund (NEF), National Youth Development Agency (NYDA), Gauteng Enterprise Propeller (GEP), Industrial Development Corporation, Small Enterprise Finance Agency, Technology Innovation Agency, KZN Growth Fund, Isivande Women’s Fund, KFW Development Bank and Land Bank, just to mention a few. All these funding programmes can be accessed through their respective agency websites, social media and press releases.

With these challenges creating a gap in funding small businesses, what has been done to address the issue?

Applicants for funding may be excellent entrepreneurs, but often, they struggle to navigate the necessary application procedures and managing their businesses.

Agencies like GEP, Awethu and NEF also offer non-financial assistance to small businesses in the form of funding advice, business planning and general assistance to ensure that applications are of acceptable standard to qualify in the application process. All entrepreneurs have to do is make use of these opportunities.

potential but are not yet fully developed.

In contrast, GEP is an agency of the Provincial Department of Economic Development in Gauteng. Its main objective is small business development, which includes financial and non-financial support to small, medium and microenterprises (SMMEs) and co-operatives.

NEF grants are targeted at black economic empowerment transactions.

Through provision of financial and nonfinancial support as well as creating a culture of saving and investing.

On the other hand, SEFA provides direct funding to businesses in the form of loans from R50,000 up to R5 million in three main ways – directly to business owners, via retail finance intermediaries and through banks using credit guarantee schemes.

Are the grants required to be repaid?

It depends on the type of grant. Some are classified as a “non-repayable grant”, others a “reimbursable cash grant”, and in certain circumstances a business is issued with a grant that only covers 50% of the required capital expenditure for the enterprise. So they vary.

What is the underlying factor that determines a business qualifying for a grant?

Meeting all the requirements for the grant, whether it is age, gender, supporting documentation, size or nature of business. As stated earlier, each grant is different as in its targeted beneficiaries, but they have similar criteria in certain cases. For instance, most grants require compliance with all relevant laws and regulations, and the business must demonstrate job creation or potential to create new jobs or sustain existing ones. After all, the aim of these grants is empowerment for the greater good. For candidates to be successful in securing the grants, they must invest time in ensuring they have a well-rounded application that qualifies.

What are the similarities and differences among these funding agencies?

The similarity is that they all aim to empower businesses. They differ on the target audiences. For instance, the objective of the NYDA Programme is to provide young entrepreneurs with an opportunity to access both the financial and non-financial business development support to establish their survivalist businesses. The programme focusses on youth entrepreneurs who are just coming into existence and beginning to display

With all these grant opportunities, why is there no magnitude economic growth among small businesses or the youth?

Having access to a funding agency is not always the only success factor in the small business sector. Small businesses need greater access to target and multiple markets in order to succeed.

Government’s preferential procurement programmes have not been adequately rolled out to provide the small business sector with that leading edge to unlock the economy.

Apart from funding agencies’ websites, what other platforms are there to create awareness for small business grants?

Since the popularity of social media, most government agencies now inform the public through their Facebook or Twitter accounts. NEF, GEP and Awethu are some of the agencies that use these platforms.

Press releases for funding opportunities are also put out on radio, TV plus print media, so as to ensure nationwide awareness and outreach.

In addition, apart from the government agencies, there are movements like Ekasi entrepreneurs, that focus on developing township entrepreneurs through mentorship, training and development, as well as access to resources, information and market access. They also host promotional events in their communities.

What is the future of funding agencies in South Africa?

It is every government’s wish to create economic growth and improve the livelihood of its citizens. As long as there is vested interest in this area, economic development incentives like grants, will always have a backbone.

The 2017 budget allocated funds over the Medium Term Expenditure Framework (MTEF) period to support economic growth in various programmes, out of which R3.9 billion is for small, medium and micro enterprises and cooperatives. 

Volume 2 · 2018 · www.incub8mag.co.za 23

BIZTECH

4

KEY TECHNOLOGY

TOOLS SMALL BUSINESSES MUST USE

Frank Mokgoloboto

Technology can be used in various forms as an enabler to run your business efficiently.

I

n case this was not common knowledge, technology specialists are relatively lazy, and being one of them, I can definitely attest to that. We are always looking for the most convenient way to optimally fulfil certain functions within our daily operations. We believe that by doing so, we allow ourselves to fully appreciate the convenience technology brings to our clients and as such, we should lead by example by using these awesome facilities ourselves.

Here are a few applications we recommend outside of your familiar Microsoft Office 365 etc., and surprisingly, you may find that most of the technologies we use are not sophisticated. Here is an overview of how to use technology to enable your operations:

1. COMMUNICATION Not a single day goes by without a director in an organization communicating with another. One of the first things technology specialists do every Monday morning is to make a courtesy call to clients, to follow up on their concerns or satisfaction around initiatives being driven with them. This is prompted by a reminder on all the technicians’ calendars, and the COO drives the engagement with the clients.

WhatsApp has proved very useful as a communication tool, as everyone is familiar with it and it is easily adaptable and requires very little if any training at all. While there are still reservations about how secure this platform is, it is very useful in aiding communication. We have

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created a WhatsApp group so that there is transparency in terms of updates and progress regarding our operations. We are currently in the process of moving this function to a communication platform called “Slack”, which has proved to be more secure and much easier for collaboration.

2. COLLABORATION Many platforms are used for this function: 2.1. Project Management – Trello Trello is a very useful tool for project management as it is flexible, easy to use and very visual, making it easy to interpret input from various members of the team. Trello comes in an online web version and a mobile app version which

BIZTECH

is fantastic as it provides a transparent, real-time view of how certain projects are progressing to all members of the team who are invited to the specific “Trello Board”/project admin page. On Trello, you can upload documents, list activities and tasks with assigned team members and deadlines. What is also cool about Trello is the ability to add a checklist (set of tasks) and the app calculates the percentage completion of each task for you in the background, making it easier for the user to gauge the progress of certain tasks. Trello also sends a notification to remind task owners of looming deadlines for their deliverables and red-flags any task that is overdue.

Trello also keeps an audit trail of who did what on the project board, thus making it easy to hold people accountable for making changes around the reflected status of the project.

Alternatives to consider: Moxtra and #Slack 2.2. Meetings – Skype for Business Skype for Business is helpful when the team is geographically scattered.

Sometimes some members of the team find themselves abroad in the thick of things and with deadlines for key projects looming. Skype for Business helps to present content by sharing screens, interact and provide input to the matter being discussed as though all participants were in the same room. Skype for Business is also brilliant in that it works on almost any device, thus allowing flexibility for those who are always on the move to be able to join in on live conversations from their mobile devices. Skype for Business works very well with Microsoft Office 365 and one can integrate meeting requests with their calendar on Outlook or present on Skype using PowerPoint.

Alternative to consider: JoinMe and Zoom

3. INFORMATION AND DOCUMENT STORAGE – DROPBOX Dropbox works well as a central repository for us to save all our documentation ranging from, proposals, contracts, invoices, quotes, to company administration documentation such as BBBEE Certificates and Tax Clearance Certificates. Basically any document which everyone in the team requires to have access to at any given point in time.

Dropbox is not limited to documentation and can store all types of media such as video content and images, this comes in handy for projects such as building websites where the project manager sources certain media content required by the web development team. This platform is very ideal for us because we are not based in the same province and as such, its ability to synchronize and keep content up to date makes it easier for us to review, peruse or make updates to the latest versions of our content regardless of our geographic limitations.

friendly with suitable, affordable packages for businesses of various sizes. It allows you to manage your customers by either adding, deleting or making updates to customer related information. One also Zcan choose templates of finance related documents such as invoices, with the company logo and designated sections for information one would expect on an invoice such as banking details, billing addresses, billing items etc. Sage One is also ideal as invoices are archived and nothing slips through the cracks, thus making the book-keeping process simpler.

I am pleased to announce that soon we are launching our own tailormade accounting system/applications (OQI – Online Quote and Invoicing).

This application will have the ability to facilitate quotations, invoicing and payments between service providers and clients. This is not something we see as a replacement of current accounting systems/applications on the market but an endeavour to fine-tune what will be a basic product in its initial phases from launch to what will become a market leader – watch this space. 

Alternative to consider: Google Docs

4. ACCOUNTING – SAGE ONE An interim accounting solution is Sage One. This platform is very simple and extremely user

GADGETS Mobile phones/Laptops – The war between Apple, Microsoft and Android devices is a common occurrence in our organization. I believe it boils down to preference. The lovely thing about the above-mentioned applications is that they can run on almost any mobile device. They have been built in such a way that the device is merely reduced to a medium to get what you want out of the application, unlike in the past where the power of the device was the be-all-and-end-all.

MGIBA TECHNOLOGIES is a company founded by young Black professionals with extensive, specialized experience in the Information Technology Industry.

Volume 2 · 2018 · www.incub8mag.co.za 25

LEGAL CORNER

9

KEY ENTERPRISE

LEGAL

COMPLIANCE QUESTIONS

Legal compliance is not negotiable. We answer some of the questions and concerns entrepreneurs have on this matter.

BY YOLELWA SIKUNYANA

T

he common mistake most entrepreneurs make is thinking that legal compliance is an option. This is probably because it is perceived as expensive or just too complex to achieve. However, doing this can be detrimental for entrepreneurs as non-compliance can sometimes lead to fines, criminal prosecution or even closure of the business.

Compliance extends to contracts as well, as these create legal obligations. It is therefore important for entrepreneurs to understand contracts and their implications.

Entrepreneurs tend to think that because they know each other and have a good business concept, they do not have to define their relationship and

obligations in writing. Although verbal contracts are valid, it is prudent to record the terms of a contract in writing for proof and certainty.

 What is the difference between shareholders and directors?

Shareholders own a company through owning its shares and directors manage it. Unless the MOI (Memorandum of Incorporation) provides otherwise, a director does not need to be a shareholder.

 What is a Shareholders Agreement?

A Shareholders Agreement is used to govern the relationship between

26 www.incub8mag.co.za · Volume 2 · 2018

the various parties in their capacity as shareholders and often also in their positions as directors of a company.

 Why is a Shareholders Agreement important?

As soon as two or more people decide to be involved in business together, the Shareholders Agreement should be the first document that should be prepared and signed. This document ensures that the running of the company and the responsibilities of the shareholders are properly regulated. Accordingly, it will reduce the potential for conflict between shareholders and help the company to be run efficiently. Most importantly it is a private document.

LEGAL CORNER

 What to include in a Shareholders Agreement?

The list is not exhaustive, but these are some of the things that can be included: • The procedures applicable to directors and shareholders' meetings • Provisions dealing with the sale of shares • Implications in case of death/ retirement of a shareholder • Share valuation methodology & Loan accounts • Options to minorities when majority of shareholders sell their shares • BEE Requirements and implications if they cease to be met • Dividend policy • Working capital requirements

 What is a Memorandum of Incorporation?

The MOI is a document that sets out the rights and responsibilities of directors, shareholders and others within a company.

This is however a public document, so some items that the shareholders want to govern more confidentially may be done in the shareholders agreement.

In instances where there is a conflict between the Shareholders Agreement and the MOI, the MOI will prevail [It is therefore important that the two documents be prepared simultaneously].

Similarly, where the MOI is in conflict with the Companies Act, the Act will prevail.

 What is the importance of contracts in a business?

In any business, the key way to safeguard resources and investment is by embracing contracts. Contracts detail legal obligations and expectations of both parties and also provide a process on how negative situations will be resolved.

details of an understanding, including each parties' requirements and responsibilities. An MOU is often the first stage in the formation of a further contract to be concluded in the future.

These contracts aim to ensure that the parties to them understand the details of the commercial arrangements they are making. It is therefore important for entrepreneurs to understand contracts as non-compliance may lead to legal action.

 What are some of the types of contracts in existence?

• Employment contract: sets out the terms and conditions of the relationship between an employer and an employee • Joint venture agreement: is a strategic cooperation where two or more people and/or companies agree to contribute goods, services and/ or capital to a common commercial enterprise for the purpose of a specific tender or request for proposal.

• Sub-contractor agreement: an agreement between a general contractor and a subcontractor; it describes the services and materials provided by the subcontractor, price of the work, and warranties of the parties.

• Non-disclosure agreement (NDA): a contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to or by third parties.

• Funding agreement: is a legal document that outlines the terms, conditions and obligations of funding, service delivery, accountability for both the funder and the business funded.

• Memorandum of Understanding (MOU): an agreement between two or more parties outlining the terms and

 What are some of the compulsory laws (as amended) that the business needs to comply with?

• Basic Conditions of Employment Act of 1997 • Labour Relations Act of 1995 • Occupational Health and Safety Act of 1993 • Companies Act of 2008 • Black Economic Empowerment Act of 2003 • Compensation for Occupational Injuries and Diseases [1993], Amendment of 1997 • Protection of Personal Information (POPI) Act of 2013 • Consumer Protection Act of 2005 • Various Tax Laws

 What are some of the requirements for a compliant business?

• Company Registration • VAT registration • BEE certificate or Affidavit • Letter of Good Standing • Bargaining Council registration • PAYE, UIF – registrations • Tax clearance certificate Some of the useful links for compliance.

➚ www.labour.gov.za ➚ www.dsbd.gov.za ➚ www.thedti.gov.za ➚ www.ncr.org.za ➚ www.sars.gov.za ➚ www.cipc.co.za

Yolelwa Sikunyana is the Founder and Director of Sikunyana Inc. Attorneys.

She writes in her capacity as a practicing Attorney.

Get in touch with her at info@sikunyanainc.co.za Mobile: 061 546 8426

Volume 2 · 2018 · www.incub8mag.co.za 27

BUSINESS PLANS

A WINNING BUSINESS PLAN – PART 1 Six nuggets to help you feel capable that you can write a winning business plan

BY CHAMP THEKISO

W

riting a business plan can be a rather daunting task, especially for a beginner and for someone who is not an avid writer. If you are a novice like me, you can get very confused and fearful about the thought of putting one together. It is therefore not surprising that most people do not write their own business plans or know what is entailed in the process of compiling one.

In this article I want to focus on what others may consider simple, but as an entrepreneur who works with many others, I know that simplicity does not mean irrelevance in terms of writing a winning business plan. There are six nuggets that guide us through the process, but we will start with three: 1. Remember what a business plan is There is a myriad of debates on and definitions for a business plan. Trying to memorize them can leave you exhausted before you can even attempt to write one.

To address this predicament, some of the great minds in the business incubation space have actually gone to the extent of proposing doing away with the term ‘business plan’ altogether. To help you understand what I mean, I thought it might be better if you read the following three descriptions for yourself but please…do not say I did not warn you.

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BUSINESS PLANS

“…A business plan should articulate your dream and passion to fulfil the need that people have and are willing to pay you for meeting that need.”

“A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. A business plan lays out a written plan from a marketing, financial and operational viewpoint” .

“A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals” “A business plan is a guide—a roadmap for your business that outlines goals and details how you plan to achieve those goals.”

I hope you thank me for only choosing three definitions. Though there is a common thread if you read hard enough, the overall impression can be overwhelming, and hopefully not. But for us enterpreneurs, we need to keep things simple and just stick to basics.

For me, a business plan should articulate your dream and passion to fulfil the need that people have and are willing to pay you for meeting that need.

That is why it is important to be clear and answer the “what, why, who, when, how and what ifs” in your articulation. To formulate a winning business plan, one must start with the big picture and remember to keep the main thing what it is – the main thing.

2. Own your business plan When you have a dream and passion, you inevitably own it even if you hire someone to do the “donkey”

work for you. If you are fortunate to delegate the writing of your business plan to someone else, you must give direction as to what must be in the plan, remain intimately involved and critically review it like you want to destroy its credibility. If you are writing it yourself, feel free to be lost in the process and do not worry about being politically or academically correct. That can be considered later.

Doing this will help clarify, just in case you are ‘smoking and seeing things’ or convince you even further that you are on the right track so far. No matter how good your plan, if you have not invested in it, you may bring doubts to the potential funder.

Owning it and being invested in your business plan will therefore assist you to communicate it with fire in your eyes and contagious passion.

3. Ask the hard questions about your business concept’s viability and address them.

Have you been in an exam and discovered you knew the answer(s) to the question(s) on the exam paper?

How was the feeling? It is the same with a well written business plan, if not better, as in this case, this has financial implications. Therefore, if you do not ask the hard questions, someone else will catch you off guard, and you will be embarrassed, to say the least.

The one question to ask yourself about your business plan is: Does it make commercial sense or why would someone take their hard earned money to buy the product or services on offer? Keep in mind that funders put a significant weight to this aspect before they can decide to take the next step.

We will share some tactics on what you can do to address the viability question. What is critical right now, is that you are open to asking the hard questions and are willing to do everything possible to address them. That is what a good business plan is supposed to help you do.

In the next article, we will share three more nuggets that will help you craft a winning business plan.

I hope you are still fired up to making this year an amazing one as planned. Do not worry about the obstacles along the way; they are part of the plan, as stepping-stones to your destiny.  Volume 2 · 2018 · www.incub8mag.co.za 29

YOUTH ENTREPRENEURS WIN PRIZES VALUED AT

1.5 MILLION

The 2017 Step Up 2 A Start Up youth entrepreneurship awards

1st Prize winners (left to right) Martin Sweet, Loyiso Madinga, Sihle Sibiya, Thisile Mtyeku Standard Bank, Sbusiso Leope, Minister Lindiwe Zulu, Olebogeng Thebyane, Wendy Nkosi, Fisokuhle Lushaba, Mclean Sibanda, Brenda Nkosi

30 www.incub8mag.co.za · Volume 2 · 2018

1st prize winners (left to right) Martin Sweet, Wendy Nkosi, Fisokuhle Lushaba

Minister in the Presidency Jeff Radebe, Minister of Small Business Lindiwe Zulu, MD of Primestars Martin Sweet

Volume 2 · 2018 · www.incub8mag.co.za 31

INNOVATION

A vision for a truly connected mobile financial services ecosystem that acts as an agent of positive social, economic and technological change.

FROM A START-UP TO A $100 MILLION VENTURE combination of maverick, trial and error, grit and luck may be a great recipe for success in order to pursue a winning business concept. This is what Hannes van Rensburg, a self-proclaimed rebel who resigned as CIO at Sanlam 13 years ago believes. This led to the successful start-up of his business, Fundamo.

He swapped a high-paying job with the proverbial corner office, company car and stock options to pursue his dream.

“It was very frustrating and boring. The corporate atmosphere is too disruptive to my

A

32 www.incub8mag.co.za · Volume 2 · 2018

way of thinking. I always say, if something has a fence around it, the reason is so you can climb over it. Rebel is a good description. I do not like to follow the prescribed path,” he says.

This was not van Rensburg’s first start-up. He was also in the leadership team behind Infomet, which was sold to IBM in the early 1990s, and developed one of the first CASE (Computer Assisted System Engineering) tools in the world.

“Those start-ups that failed will go unnamed.

They failed pretty quickly,” Hannes says.

Fast forward a decade and his start-up vision Fundamo has become one of the world’s

INNOVATION

most sophisticated mobile financial service platforms, deployed in more than 34 countries across Africa, Asia and the Middle East. With headquarters in Cape Town, South Africa, and with initial funding from Venfin, a Remgro company, Fundamo (a portmanteau of the two words, “Fundamentally” and “Mobile”) offers mobile financial services to unbanked and under-banked mobile subscribers including person-to-person payments, bill payments, wireless airtime top-up, and ticketing.

Van Rensburg insists that he is an ordinary guy who believed in his dream and who was lucky! “I am nothing special.

I made more mistakes than most. I think the lesson is to work hard and stay on for the full time, when many around you might have quit.”

Working with clients and partners globally, Fundamo has played a major role in the development of the mobile financial services industry since 2000. Fundamo launched the world’s first mobile financial service in a developing economy with Celpay Zambia in 2002.

In June 2011 Fundamo was acquired by Visa Inc. for $110-million. The acquisition combines Visa’s global network scale, product suite, financial institution associations, and security with Fundamo’s capability in mobile financial services. It created a globally inter-operable mobile payment platform that can connect existing mobile money services with Visa‘s global payment network. Fundamo’s vision is for a truly connected mobile financial services ecosystem that acts as an agent of positive social, economic and technological change.

Van Rensburg believes that young South Africans are uniquely poised to take advantage of and thrive in an increasingly globalised world. “They are growing up surrounded by a lot of diversity, be it language, culture, music. They are going to be flexible enough to deal with it and this is a very important trait in the complex, multicultural corporate environment. Because of this upbringing, I think young South Africans are going to

"It was very frustrating and boring. The corporate atmosphere is too disruptive to my way of thinking.

I always say, if something has a fence around it, the reason is so you can climb over it. Rebel is a good description. I do not like to follow the prescribed path."

Hannes van Rensburg

approach problems in a flexible way and excel out there!”

But, he warns, do not for a second think it is going to be an easy path. “It will never be as easy as you think. It is not even close to being as glamorous as it is made out to be. It is hard and painful and it will demand a lot of you. Even if you persevere and stay committed, you may still fail – but at least you would know that you gave it your everything.”

So, what would the older man – van Rensburg turned 60 recently – tell his younger self? “I would tell a younger me to be more patient, to be more focused, to save my energy to do the right things well and to not waste my energy on the long shots. However, I would probably not have followed this advice, and even if I did, I am not sure if the story would have turned out better.”

But, and perhaps this too is a secret ingredient, Hannes has no regrets. Not one! “I have made many, many mistakes.

I should have read contracts more thoroughly before I signed them, I should have been more careful before I trusted people – those are the key lessons I think, maybe also to have more courage to say, ‘no’ sooner.

“I wasted money on wild goose chases and untested ideas. I procrastinated on things that I enjoyed thinking about, but I sort-of knew would never pan out. But I do not have any regrets. Even the terrible mistakes that I made (sometimes even to the point of smashing the dream), were good. Today I am a better man because of them.”

So what did the younger man get right?

The dream, which must by definition, be a little bit vague! “This allows scope for creativity, for building upon it. A dream is a picture of the future, and the most important part about realising a dream is to be able to communicate that vision.

Any individual, any team wants to know where they are going. If you can provide an exciting picture of the destination it will bring people together. It will boost confidence. It will be challenging but inspiring.”  Volume 2 · 2017 · www.incub8mag.co.za 33

Q&A

THE INS AND OUTS OF TSO’S

CHESA NYAMA

Over the years the business has been growing, to the extent of collecting some accolades along the way, in the form of awards.

That’s how popular Tso’s Butchery has become.

Briefly tell us about the Tso’s Butchery?

Tso’s Butchery is an award winning eatery and pub, located in Kagiso, west of Johannesburg, in Gauteng. We offer a true township experience, culture and vibe.

This popular place was borne out of a partnership between Rachel and Kgomotso Modise, in October 2008. It started as a traditional fast food outlet, but the popularity of daily fresh meat (chesa nyama) and dishes, soon led to its diversifying, to include more refined and sophisticated gourmet food.

Over the years the business has been growing, to the extent of collecting some accolades along the way, in the form of awards. That’s how popular Tso’s Butchery has become.

34 www.incub8mag.co.za · Volume 2 · 2018

What makes your line of business unique as compared to others?

We are renowned for the best traditional township (barbeque) and unique gourmet food, a formula our customers rave about. We also have a well-stocked bar where you can chill and enjoy your favourite drinks after a delicious meal, something that makes this place eatery to be so popular.

Who are your competitors and how do you ensure you remain risen above them?

All chesa nyama outlets in townships endevour to espouse the following approach: • To be a company with unique products, • To strive for service excellence,

Q&A

• To be professional at all times, • Be ahead of everyone, and • Link our product offerings to tourism.

What is the biggest mistake one can make in running a business?

• Not getting the right capital to start the business, • Not promoting your business, and • Not employing the right staff.

What challenges did you face when you first started and how is it now?

Having the right business plan and adapting to the changing business environment What is the key to your success?

Listening to customers and striving to accommodate the ever changing market What’s your strategy for getting and keeping profitable customers?

• Having regular staff meetings to try and understand and correct where things are going wrong and then fixing them.

• Remunerating the staff well and treating them like family.

• Acknowledge the best employees with annual awards.

How many people does your company employ?

16 Do you think there is a bright future for this line of business in South Africa?

Yes, the influence of franchise chain into South Africa and the growing black middle class.

Where do you see your business in five years’ time?

I see it playing a big role in the township tourism drive What is your definition of an entrepreneur?

An entrepreneur is someone that shows initiative by taking a risk to take advantage of an opportunity to benefit from through selling and making money out of that. 

Volume 2 · 2018 · www.incub8mag.co.za 35

Q&A

START UP AT AGE 24,

EMPLOYS 22 PEOPLE She is making strides in a male dominated industry as the managing director of Kepcor construction

1. Who is Caroll Masevhe?

Caroll Masevhe is a 28-year old woman, born and bred in Thohoyandou, Venda, in the Province of Limpopo. I am the first born of five siblings and a mother to one boy. After acquiring National Diploma in Civil Engineering I did two years in-service training then went on to work for Stefanutti Stocks Building SA until establishing my business at age 24, which now employs 22 people.

2. Please tell us more about your qualifications?

I have a National Diploma in Civil Engineering, NVC Entrepreneurship certificate and several industry related certificates.

3. How was the company founded?

I founded the company in August 2012 after working for one of the top five engineering companies in South Africa for over four years.

The company only started trading in May 2013 and since then it’s been a very fulfilling journey of learning and growth.

4. Tell us more about the company.

Our offices are in Bryanston but we do work in Gauteng and the neighbouring provinces.

Our client database includes WBHO, Aveng Grinaker-LTA, JHI, and Investec among others.

We offer services in civils and building, our core being concrete technology and repairs (Sika Approved), concrete channeling, paving and landscaping as well as roadworks related services.

5. Five things people don’t know about the industry you are in • It is a significant contributor to employment and economic growth.

36 www.incub8mag.co.za · Volume 2 · 2018

Q&A

"From having the correct and proper systems in place to compliance with the construction regulations and bodies, a professional team within the business and of course hiring the right people to do the job. With all this in place, you’re guaranteed to have a successful business."

Caroll Masevhe

• The industry trends improve all the time which makes way for companies to improve their service offering.

• The industry has a growing demand for skills and development that people should take advantage of.

• It supports the economic development of the country.

9. What do you think about transformation in the engineering sector?

There is so much growth in trends which makes it easier for one to diversify, implement and innovate their service offering.

• The innovation within the industry improves all the time which keeps one on their toes and working round the clock to improve services.

10. How do you balance work and personal life?

It is very difficult to find the balance but somehow one has to, from work (office & site) to helping my six-year old with homework, it can be quite daunting but I dedicate my weekends to spending time with my son. I love cooking, take mini day road-trips, relax over a movie and go to church. Eventually, with consistency one gets the hang of things.

6. What makes a construction business successful?

Professionalism – from having the correct and proper systems in place to compliance with the construction regulations and bodies, a professional team within the business and of course hiring the right people to do the job. With all this in place, you’re guaranteed to have a successful business.

7. What challenges do you face that are unique to this industry?

The industry can be quite tough, clients not paying on time which affects cashflow and industry exploitation from big companies. Gender inequalities also play a role as one of the major challenges.

8. What advice would you give someone hoping to start their own company?

Starting a company and running a business are two different things. Anyone can have a company on paper but it takes a lot of hard work to build a sustainable business. I would advise anyone wishing to have a company to do so from a point of building an entity that will bridge a gap in the community and answer to the needs and demands of the industry. Passion is a very important part as well, you’ve got to have the drive even when you’re faced with challenges and focus on your goals.

11. Last book you read?

Year of Yes by Shonda Rymes Vuyos’s by Myles Kubheka 12. Favourite song?

Kha Vha Rendwe -A traditional Tshivenda gospel song rearranged by Lufuno Dagada and Nothing Without by Dr Tumisang Makweya 13.Favorite movie?

Hidden Figures (my newest favourite) – was so much in awe of the power and unity between the three main characters.

It made me see my life differently and showed me that persistency and not putting any limits to your abilities will get you anywhere you want to go. 

Volume 2 · 2018 · www.incub8mag.co.za 37

DIRECTORY

Incubation Centres Directory Shanduka black Umbrellas

Egolibio lifesciences

Lepharo

 27(0)105905555

 27(0)128440724

 27(0)113633920

www.shandukablackumbrellas.org

www.egolibio.co.za

www.lepharo.co.za

Aurik

Branson Centre

Seda Automotive Technology Centre

 27(0)114475575

 27(0)114030622

 27(0)125645592

www.aurik.co.za

www.bransoncentre.co.za

www.seda.org.za

Chemin

Seda Essential Oils Business Incubator (SEOBI)  27(0)128083061 www.seobi.co.za

Raizcorp

 27(0)112622710

 27(0)105940641

www.raizcorp.com

www.chemin.co.za

Awethu Project

Seda construction incubator(SCI)

SoftstartBTI(SBTI)

 27(0)110241606

 27(0)414862595

 27(0)116954800

www.awethuproject.co.za

www.seci.org.za

www.softstartbti.co.za

SCI E.L

South African Manufacturing Technology Demonstration Centre  27(0)877401000 www.smtdc.co.za

Ifa Lethu Foundation

 27(0)315640743

 27(0)873730801

www.ifalethu.org.za

www.seci.org.za

Agri Mega

SEDA Alfred Nzo Agro Manufacturing incubator(SANAMI)  27(0)872851555 www.sanami.co.za

 27(0)284242890

www.agrimega.co.za Furntech

Seda Nelson Mandela Bay CT

Downstream Aluminium Centre for Technology  27(0)357971500 www.dact.co.za InvoTech

 27(0)215100088

 27(0)414098600

 27(0)312014788

www.furntech.org.za

www.snii.co.za

www.invotech.co.za

Rlabs

Zenzele Technology Demostration Centre  27(0)117094674 www.seda.org.za

 27(0)216991453

www.rlabs.org Mobile Agricultural Skills Development and Training  27(0)137532470 www.masdt.co.za

Seda Agriculture&Mining Tooling Incubator(SAMTI)  27(0)51 5073592 www.cut.ac.za

Jozi Hub  27(0)824513654 www.jozihub.co.za

Bakery and food Technology Incubator of SA  27(0)128031222 www.bicsa.co.za

The innovation hub

Ekurhuleni jewellery Academy

SmartXchange

 27(0)313071988

www.smartchange.co.za Mapfura Makhura Incubator (MMI)

 27(0)124411000

www.seda.org.za Timbali

 27(0)137524247

www.timbali.co.za Seda Platinum Incubator

 27(0)128440000

 27(0)214659966

 27(0)145970736

www.theinnovationhub.com

www.designindaba.com

www.spi.org.za

Global jewellery Academy

Seda Atlantis Renewable Business Incubator (SAREBI)  27(0)215772719 www.serebi.co.za

Medo

 27(0)213000500

 27(0)118572854

www.medo.site

www.globaljewelleryacademy.co.za

Volume 2 · 2018 · www.incub8mag.co.za 39

DIRECTORY

Business Development Agencies

SEARCH

Business Partners Limited  011 713 6600 www.businesspartners.co.za

National Empowerment Fund  011 305 8000 www.nefcorp.co.za

Central Energy Fund  010 201 4700 www.cef.co.za

National Youth Development Agency: National Youth Fund  011 834 7660 www.nyda.gov.za

Development Bank of Southern Africa  011 313 3911 www.dbsa.org

North West Development Corporation  017 381 3666 www.nwdc.co.za

Eastern Cape Development Corporation  043 704 5600 www.ecdc.co.za

Northern Cape Economic Development Agency  053 833 1503 www.nceda.co.za

Eastern Cape Rural Development Agency  043 604 7000 www.ecrda.co.za

SAB Kick Start (Central region)  051 406 8414 www.sabkickstart.net

Free State Development Corporation 051 400 0800/10 www.fdc.co.za

Sasfin Private Equity 011 809 7500 www.sasfin.com

Gauteng Enterprise Propeller  011 085 2001 www.gep.co.za

Small Business Growth Trust Fund  011 421 2939 www.sisonkefund.co.za

Gauteng Growth and Development Agency  011 085 2321 www.ggda.co.za

Small Enterprise Development Agency  012 441 1000 www.seda.org.za

Identity Development Fund (IDF)  011 772 7900/10 www.idf.co.za

Small Enterprise Finance Agency (SEFA)  012 748 9600 www.SEFA.org.za

Industrial Development Corporation (IDC)  011 269 3000 www.idc.co.za

Trade and Investment Kwa-Zulu Natal  031 368 9600 www.tikzn.co.za

Ithala Development Finance Corporation 031 907 8911 www.ithala.co.za

Trade and Investment Limpopo  015 295 5171/97 www.til.co.za

Land Bank  012 686 0500 www.landbank.co.za

Western Cape Investment and Trade Promotion Agency  021 487 8600 www.wesgro.co.za

Mpumalanga Economic Growth Agency  013 752 2440 www.mega.gov.za

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