SA Franchise Warehouse

Online Marketing Courses – creating future marketing entrepreneurs

2018-11-26T09:47:00.004+02:00

Traditionally, facilitated education in the marketing world has been favoured over other methods of learning. The more time that you spent in a lecture theatre and the more money you spent on the course, the more highly the marketing qualification was regarded.

Today, in the Fourth Industrial Revolution, where technology has become an indispensable part of our everyday lives, online learning in the marketing industry has been embraced by reputable education providers and is changing the narrative.

Good news for entrepreneurs who have to wear many hats in their business! “The main focus of entrepreneurs, whether they are selling a product or service,” says Lisa Schneider: Managing Director of the Digital School of Marketing (DSM), “is to attract customers and convince them to make a purchase. Being able to afford a marketing agency or full-time marketing manager could be a stretch at first and communicating brand messages to the public would be a necessity, so essentially entrepreneurs need to do this themselves. Therefore, a thorough knowledge of marketing in a digital context is essential.”

The explosion of reputable online marketing education providers like DSM is good news for entrepreneurs whose schedules are often very erratic and are unable to make set class times. With online learning, entrepreneurs can learn what they need to about marketing when its convenient for them. As money is often quite tight, online marketing learning is a great option for entrepreneurs at it usually comes in at a much lesser cost than marketing courses from bricks-and-mortar educational institutions.

To find out more about the Digital School of Marketing visit our website: visit our website, call us: 0861 428 710 or e-mail: info@digitalschoolofmarketing.co.za and join the conversations: Instagram, Facebook and Twitter.

Young techpreneur awarded for wow-factor

2018-11-23T13:40:00.002+02:00

Christo Botes (Business Partners Limited), Khomotso Malakalaka (National Winner) and David Morobe (Business Partners Limited)

Innovative techpreneur, Khomotso Malakalaka, was announced as the national winner of the 2018 SME Toolkit BUSINESS/PARTNERS Business Plan Competition for Aspiring Young Entrepreneurs – a competition that saw 800 young aspiring entrepreneurs attend business planning workshops across the country to equip them with the necessary skills and tools to turn their business idea into a reality.

The competition aims to encourage, assist and inspire South Africa’s youth to start their own businesses as a means to reduce the country’s high unemployment rate by promoting entrepreneurship as a viable career choice.

However, according to Petro Bothma, Enterprise Development Manager at Business Partners Limited (BUSINESS/PARTNERS), who was speaking at the awards ceremony held this morning in Johannesburg, in order to do this, it is crucial that aspiring entrepreneurs be taught the essentials of starting a business, such as developing a business plan.

“This year, the competition saw an increase of entrants, especially from the country’s smaller cities, which is testament to entrepreneurship becoming a more popular career path throughout South Africa and not just in the larger metros,” says Bothma. “It is for this reason that 11 regional winners were chosen as opposed to the usual eight – with the exceptionally high calibre of the submitted business plans following the workshops, it was an extremely tough competition to judge.”

Malakalaka was awarded the national prize for her business plan for her Polokwane-based online grocery shopping and delivery start-up, The GoodGrocer, which ultimately exuded the ‘wow-factor’, explains Bothma. “The GoodGrocer will offer services that take advantage of the growing customer demand for e-commerce by providing a convenient and high-quality service, whilst taking into account its customers’ lifestyle needs and catering to the essential requirement of hassle-free, easy, and convenient online grocery shopping.

“The business plan submitted by Malakalaka was an outstanding representation of her start-up, showing great attention to detail and ultimately, the viability of the business. Set to begin trading in 2019, Malakalaka ensured that all her bases are covered and that the foundation for her business is in place. This, combined with her passion and her enthusiasm all played a role in her win,” says Bothma.

When selecting the national winner, the judges consider the quality of the business plan, the level of innovation, viability of the business concept, entrepreneurial ability and whether the aspiring entrepreneur is in fact ready to become a business owner in terms of their leadership skills and suitability to mentorship.

For being crowned the national winner of the 2018 SME Toolkit BUSINESS/PARTNERS Business Plan Competition for Aspiring Young Entrepreneurs, Malakalaka will receive R25 000 in seed capital for her business, a mentorship voucher valued at R12 000, a smart tablet and goodie bag.

Now in its ninth year, Bothma says that the competition continues to be a great journey and that she looks forward to working with South Africa’s youth each year. “The younger generation is filled with such passion, enthusiasm and hope, and our aim remains to continually support and channel this passion in order to help them to make their dreams a reality through the competition.”

Front row, from the left:

Frans Mpholo (Navrok), Lucky Tshabalala (Entertainment Neighborhood), Mphindeleli Qalazive (Auto Precision Engineers), Khomotšo Malakalaka (The GoodGrocer), Petro Bothma (Business Partners Limited), Takalani Magoro (Sky Base Projects), Siphelelo Sikolisi (Auto Precision Engineers).

Back Row, from the left:

Nyaniseka Mxinwa (Buyel’mbo Innovation Services), Thato Maleka (Smart TKT), Shaidat Aroyewun (1in Town), Yolanda Funani (Buyel’mbo Innovation Services), Khuluwe Tintelo (Auto Precision Engineering), Puseletso Phuko (Panache Entertainment Agency), Thembile Ndlondlo (Auto Precision Engineering), Gugu Mjadu (Business Partners Limited), Ayanda Jiyane (Hair Reconstructioners), Goodwill Moloko (Pureponics Aqauponics), Christo Botes (Business Partners Limited), David Marobe (Business Partners Limited).

Below is the list of all the 2018 regional winners; each won a mentorship voucher valued at R6 000:

Ayanda Jiyane – Hair Reconstructioners (KwaZulu-Natal)
At present, Jiyane has been operating out of her home or by traveling to her clients’ homes. However, once Hair Reconstructioners has been more formally established, it will offer a variety of hair services, including braids, twists, freehand, hair relaxing, hair treatments, hair washing, and weaves. Additionally, within three years of operation, Jiyane aims to add a spa to the business’s model, as well as start a mobile salon.

Frans Mpholo - Orange Berry ICT solutions (Free State):
Orange Berry ICT solutions is an internet café business which, once established in Kroonstad, will provide fast, reliable, and cost-effective internet access and services in the community; sell reasonably-priced, high-quality computer peripherals; increase the number of computer users in the area; provide locally- and internationally-recognised skills and training services; and attain and maintain a strong business presence in the province.

Lucky Shabalala - Entertainment Neighborhood (Johannesburg):
Entertainment Neighborhood provides the use of video gaming facilities at R10 per hour to individuals from low-income households in the townships of Vereeniging. Shabalala started the company by using his personal gaming console which he set up outside a local hair salon. Today, Entertainment Neighborhood consists of eight PlayStation 4 consoles, eight UHD TVs, and 32 video games.

Moloko Goodwill and Michael Manaswe – PUREPONICS AQUAPONICS (North West):
Aquaponics is a sustainable agricultural practice combining hydroponics (the growing of plants in water) with aquaculture (the farming of aquatic organisms). Through this practice, Goodwill and Manaswe aim for PUREPONICS AQUAPONICS to produce and supply affordable, organic fish and vegetables to restaurants, supermarkets, grocers, schools, and other health- and eco-conscious institutions and consumers.

Nyaniseka Mxinwa and Noluthando Yolanda Funani – Buyel’mbo Innovative Services (East London):
Founded in 2016, and based in East London, the company’s services include the supply of processed timber to commercial clients, local retailers, and events coordinators, as well as the supply of untreated poles to various clients in the bigger Eastern Cape region.

Puseletso Patience Phoku – Panache Entertainment Agency (Mpumalanga)
Established in 2015 and based in Mbombela, Panache Entertainment Agency’s primary services include the recruitment and job placements of models, as well as establishing partnerships with marketing companies and sales representatives of local and international brands requiring brand activation services and promotions.

Shaidat Aroyewun - 1in Town (Port Elizabeth)
At present, Aroyewun designs and manufactures small clothing orders for family and friends. However, once the business is established, 1in Town will stock and supply a variety of fabrics and material designs to designers and tailors in Port Elizabeth and surrounds. The company will also design and make clothing for children aged 10 and lower, unique and custom-made burkas for Muslim women, as well as various types of caps.

Siphelo Sikolisi, Thembile Ndlondlo, Khululwe Tintelo, and Mphindeleli Qalazive – AutoPrecision Engineering (Western Cape)
AutoPrecision Engineering will largely be owner-operated and managed, with each of the owners being responsible for various business operations including marketing and sales, occupational health and safety, project management and machinery maintenance, as well as administrative functions. Once established, AutoPrecision Engineering’s services will include cylinder head reconditioning, cylinder reboring, crankshaft grinding, and cylinder head skimming, among others.

Takalani Magoro and Maemu Tshivhase – Sky Base Projects (Pretoria)
The concept for their company is to offer three main services: low-cost home staging (rearranging the property’s existing furniture), de-cluttering (removing unnecessary items from the property), and cleaning, which includes garden maintenance. Although based in Pretoria East, Sky Base Projects will cater to customers throughout Gauteng.

Thatho Maleka – Smart TKT (TKT BrowLash Boutique) (Northern Cape):
Founded in 2018, the TKT BrowLash Boutique is situated in Magojaneng Village in Kuruman, and is positioned to provide modern women of all ages with reasonably-priced, convenient eyebrow and eyelash services, including micro-blading. In addition to these services, Maleka’s boutique also sells retail beauty care products.

It's never too late to start a business

2018-11-21T07:52:00.001+02:00

Anton Roelofse

Entrepreneurship at any age is key to minimising unemployment in SA

Whilst the country continues to battle a high unemployment rate – which increased to 27,5 percent, according to the Quarterly Labour Force Survey for the Third Quarter of 2018 – the narrative of entrepreneurship as a viable career choice should be widely promoted and encouraged across all generations.

However, according to Anton Roelofse, regional general manager at Business Partners Limited (BUSINESS/PARTERS), the recently released 2018 Real State of Entrepreneurship Survey, compiled by Seed Academy and Old Mutual, revealed that 80 percent of entrepreneurs in South Africa are under the age of 45, with the majority of entrepreneurs reported to be between the ages of 25 and 34. “In light of the high prevalence of unemployment, there is no reason that entrepreneurship should be reserved for the younger generation. Considering that only 20 percent of entrepreneurs are over 45, it is now more important than ever for older aspiring entrepreneurs to realise that the country needs them and it is never too late to start a business,” he says.

Delving into the reasons for this low rate of entrepreneurship among older generations in South Africa, Roelofse refers to the 2016-2017 Senior Entrepreneurship Report. “According to the report, older individuals have the lowest confidence in their ability to start and run their own businesses, and many believe that entrepreneurship is a young person’s occupation because the majority of entrepreneurs are young.”

In contrast to these beliefs, Roelofse says that it has actually been shown that older entrepreneurs are more adept at building resilient businesses, which is especially crucial during times of slow economic growth. “If more older entrepreneurs follow their entrepreneurial dreams, not only will more jobs be created, but the idea of entrepreneurship will become more socially accepted for all ages and hopefully have a ripple effect.”

As such, it is vital for older aspiring entrepreneurs to realise that they are more equipped than they think to start and run a business, says Roelofse, who lists three pointers to boost older aspiring entrepreneurs’ confidence:

Work experience: Starting a business at a later age means that the entrepreneur will have a lot more work experience. This will be extremely beneficial as it will contribute to the entrepreneur’s leadership skills, business management and acumen, problem solving skills, and industry experience, should the entrepreneur decide to open a business in the same industry.
Personal networks: It is often said that it’s not what you know, but who you know, and as one grows in age, so do their personal and professional networks. Older entrepreneurs will therefore be more likely to know other established professionals who they can turn to for advice, collaboration, and offer their services to.
An established passion: Older entrepreneurs tend to be less restless in their pursuits, as they have had more time to figure out what they are most passionate about, which can often be a driving force to start a business as well as motivate their success in the future.

These are just a few of the reasons supporting the notion that more older aspiring entrepreneurs should start their own businesses and contribute to increasing employment opportunities in the country, says Roelofse. “Age should be seen as an added strength, not a hindrance, when it comes to entrepreneurship. And aspiring entrepreneurs, regardless of their age, should be encouraged and supported to contribute economically,” he concludes.

Sustainable entrepreneurship key to securing future investment

2018-11-21T07:46:00.000+02:00

Gugu Mjadu

Steps to building an ESG compliant business from the get-go

Prioritising sustainability and socially responsible business practices has become increasingly important to potential investors when evaluating opportunities. According to the 2018 Schroders Global Investor Survey, a study by global asset-management company, Schroders, of more than 22 000 investors across 30 countries, 88% of South African investors indicated that sustainable investing is more important to them now than it was five years ago, compared with 76% of investors globally. It is for this reason that entrepreneurs should prioritise their Environmental, Social and Governance (ESG) score from the get-go to ensure investor interest down the line.

An ESG framework is based on three central factors when measuring the sustainability and ethical impact of an investment. These three factors are categorised into Environmental (water usage and waste production), Social (treatment of employees in the workplace and clients) and Governance (compliance, regulation and board levels).

According to Gugu Mjadu, spokesperson for the 2018 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, although profit is a pivotal aspect considered when looking to invest in a business, a sustainable business is just as important. “Entrepreneurs need to ensure they adopt sustainable measures when doing business which means they need to be responsible for minimising their impact on the world. It is up to the business owner as well as their employees to be as efficient and responsible as possible and to only use the necessary resources.”

Mjadu says that when looking to invest in a business, investors are looking for an ESG-compliant company that in the long-term boasts minimal risks. “If companies have a good ESG score it’s likely that they will meet the current and future demand of more sustainably sourced products or services. With minimal risk associated to the business, it’s likely that the business will also yield better financial returns in the long-term which is beneficial to the business owner and investor.”

She believes that this is especially true given the spate of corporate scandals which have emerged recently. She points to the same Schroders report which states that South Africans appear to be driven towards sustainable choices by their tendency to support local businesses, but with a focus on avoiding controversy. “Although most people (65%) prefer to support local products and services, 71% reported that they often or always avoid businesses with a track record of controversy, compared with a global average of 56%.

Mjadu adds that it’s not only important for investors to find sustainable businesses to invest in but for business owners to ensure their investors are sustainably aligned too. “Socially-minded partners will work well together as they think about their entire footprint and not only the final consumer product and profit.

So, how does an entrepreneur measure and track its own ESG level? According to Mjadu, there is a mixed reporting system. “Part of this is self-reporting through data captured by the business owner and the other part is through an ESG analyst who will come into your place of work and analyse the various factors for your business. If you are not familiar with measuring the various ESG elements, it’s important that an ESG specialist be brought in to ensure compliance. Once you have this data captured, it makes it easier to offer up to potential investors and shows that you abide by good business practices.”

Mjadu leaves entrepreneurs with the following tips to ensure an ESG complaint business.

Environment: Ensure overall efficiency in your business especially when it comes to managing resources and looking after the environment around you.
Social: Make sure that you have diversity in the workplace and that you work with line managers to ensure a healthy and happy workplace.
Governance: This refers to how well you company is run. Ensure transparency and accurate reporting – you don’t want to make the news as the next corporate scandal.

Compliance and safety audits now done faster and more efficiently

2018-11-15T15:05:00.001+02:00

With the increased functionality offered by smartphones and the improvements in mobile accessibility, Franchisor Field Consultants can now be more productive while in the field.

Until recently reports had to be filled in and then retyped and only once the photos has been manually added and the MS Word document saved to PDF, could the compiler email the report.

A new future
The MobiWork suite of products is a smartphone application that runs on the cloud which now affords small medium enterprises (SME’s) the opportunity to arm their mobile workforce with a cost effective, technologically advanced application that will improve their productivity, information exchange capability and customer satisfaction.

The solution
The MobiWork solution is a product of the Florida, USA based company, MobiWork LLC and is offered in South Africa by Caracal Software Solutions (Pty) Ltd, a Pretoria based company that specialise in Productivity improvement systems.

The basic functionality available from the standard MobiWork MWS (Mobile Workforce Solution) application includes online report completion, taking of photos, Geo plotting of locations, inserting comments, capturing of signatures and then automatically sending the report to the designated recipients in PDF format.

For Management, the time, duration and physical locations of the report compilers can be seen to verify productivity and location.

The benefits of empowering a mobile workforce with mobile technology can be measured in the following ways:

Reduced travel cost through GPS route navigation and route planning capabilities,
More productive time usage as real time reports, checklists and the like which can be compiled while at the client or in the field,
Improved communication (both internal and with customers) as all the parties involved are kept abreast of the status of work orders through SMS, e-mails and system generated communications,
Improved compliance management though online reporting, and
Most importantly for managers, the speed at which exception reports are generated.

Getting started
A major benefit of the MobiWork’s solution is that, unless you view the acquisition of a smartphone with data capability as a challenge, there are no barriers to entry. There is no need for dedicated servers or any system infrastructure, no large software applications are installed and a month-to-month user license agreement means users are not tied in to multi-year fixed agreements.

Our customers include the likes of Romans Pizza, Barcelos, Hot Dog Café and The Drain Surgeon who are all using great benefit out of the increased productivity and time saving.

Visit www.caracalsolutions.co.za for further information or contact Ben Booysen on +27 82 330 5861 or email ben@caracalsolutions.co.za.

The 7th Annual FNB Franchise Leadership Summit

2018-11-14T06:16:00.001+02:00

Michael Vacy-Lyle, CEO FNB Business

The franchising sector has shown steady growth over the past four years, in a tough economy from contributing an estimated 9.7% to the country’s GDP in 2014 to its recent figure of more than 15%, according to the Franchising Association South Africa (“FASA”) 2018 survey. This trend is expected to continue.

The survey further highlights that 78% of franchisors are optimistic about future growth in their businesses. Around 30% of franchises are now owned by previously disadvantaged South Africans, with one in three franchises turning over more than R20m per annum. This together with the fact that on average a franchise employs 18 staff members (the sector employs more than 370 000 people), makes it clear that as a business model, franchising remains critical to the future of South Africa.

Given the FNB Franchise Leadership Summit theme this year – “the future of the franchising sector”- I thought it would be good to reflect on some of the key trends we are noticing in this very dynamic space…

1. More Multi-Unit Owners, and franchisees owning multiple concepts
What happens once you have mastered the tried and true formula franchises have designed for their franchisees? If you’re like many franchise owners, you start opening another location. And then another. By recreating your success in multiple locations, you can quickly grow your revenues and increase your business’ sustainability.

Many franchisee owners are also opening other, non-competing franchise offerings as they grow their businesses in an effort to diversify earnings.

2. Smaller, more cost-effective franchise models
Among the new frontiers in franchising is the food court losing its legacy as the preferred setting for food franchises, as service stations increase in popularity in the industry. Many brands – including Steers, Debonairs and Mugg & Bean On-the-Go outlets – are co-locating with major fuel retailers to create fully-integrated accessible centres. Looking at new, less expensive alternate locations beyond the shopping malls and strip malls to expand into stand-alone kiosks, food trucks, corporate catering, campuses, sporting events, craft markets, is a major trend.

3. Niche markets
Consumers increasingly prefer local businesses over national brands. Some of the bigger brands are looking for creative ways to tackle this situation by tagging with local businesses and this trend is on the rise. Niche markets are gaining traction. Whether it’s in offering a unique ‘gourmet’ food experience, craft beer or whether it’s in the environmental space of energy saving technology or recycling, these are where many new opportunities are to be found. With the increase in social awareness, social responsibility is a part of any business, small or big. The current generation of consumer is challenging the role that business plays in society and franchises have wonderful platforms to play a positive role and in so doing win customers.

4. Increased customization/ personalisation
In a world of increased consumer choice, it is no longer about what you have on the menu, it is now about how your product or service can be tailormade to what a customer really wants. The success of RocoMamas speaks to this - with 61 franchise outlets their business model clearly responds to the essence of this trend by allowing consumers to create their own burgers, and increasingly consumers want the ability to create their own dining experience.

5. On-demand products/ services
Amazon is a great example of this – same day delivery is becoming the norm in the age of instant gratification – I want it now! Differentiation through delivery remains a big opportunity.

6. The significance of online and social media
Social media is how your customers chose to interact with brands, whether to express anger, inquire or to show appreciation. It is no longer about the question of should a business use social media or not, it is now more about how a business uses social media. Today’s digital-savvy customers are highly choosy about online buying. Some key points to consider:

You need A Responsive, Interactive and up to date Website;
Customers should be able to view your website perfectly on any device;
Data Analytics is Important - Like it or not, your data is what drives your business; and
Seemless and Safe digital payments are critical.

There is no doubt that franchising not only offers viable business opportunities, but also ensures that franchisees are better equipped to weather the tough economic environment. We at FNB Business remain committed to helping grow this very important sector and are well positioned to provide solutions supporting franchising as it evolves with these themes.

Entrepreneur awarded for entertainment business

2018-11-09T09:38:00.002+02:00

Lucky Shabalala and Christo Botes

Business plan competition for young, aspiring entrepreneurs announced Johannesburg regional winner

The 2018 SME Toolkit BUSINESS/PARTNERS Business Plan Competition for Aspiring Young Entrepreneurs has announced Lucky Shabalala as the regional winner for Johannesburg after submitting his business plan for his company, Entertainment Neighborhood - a video gaming company.

Entertainment Neighborhood provides the use of video gaming facilities at R10 per hour to individuals from low-income households in the townships of Vereeniging. Shabalala started the company by using his personal gaming console which he set up outside a local hair salon. Today, Entertainment Neighborhood consists of eight PlayStation 4 consoles, eight UHD TVs, and 32 video games.

“Now in its 9th year, the competition aims to promote South African entrepreneurship amongst individuals between the ages of 18 and 35, by bridging the gap between simply having an idea, to actually launching a start-up business,” says Petro Bothma, Group Enterprise Development Manager at Business Partners Limited and Program manager for SME Toolkit South Africa.

As part of the free-to-enter competition, Shabalala joined young entrepreneurs across the country by taking part in one of the 18 regional business workshops on the intricacies of compiling a business plan and managing the many functions of running a business. Following the workshop, each entrant was invited to submit a complete business plan to the competition judging panel.

“The business plan for Entertainment Neighborhood was chosen as it was well presented, informative and comprised all the essential sections required. It also showed Shabalala’s aim to grow the business further and make affordable video gaming facilities available in various low-income communities, thereby providing consumers with entertainment as well as the opportunity to pursue professional careers in gaming,” says Petro Bothma, Programme Manager of the SME Toolkit SA at Business Partners Limited (BUSINESS/PARTNERS), who was speaking at the regional awards ceremony held on 31 October 2018.

Each regional winner is awarded a mentorship support voucher to the value of R6000, as well as introduced to valuable business networking opportunities to assist them with growing their fledgling businesses, Bothma adds.

The SME Toolkit BUSINESS/PARTNERS Business Plan Competition for Aspiring Young Entrepreneurs competition received 800 entries for young entrepreneurs across the country, after which, 100 business plans were submitted for judging. Eight regional winners will be selected from across the country, and will then contend for the overall national title which will be announced at an awards ceremony held in Johannesburg later this November.

Sanlam confirms its sponsorship of FASA's Franchise Surveys

2018-11-08T11:12:00.003+02:00

Renewing its confidence in the franchise sector

Sanlam has, for the fifth year, confirmed its sponsorship of the Franchise Association of South Africa (FASA)’s 2019 Franchise Surveys.The surveys are an important barometer that track the success of this unique business system which in the latest survey shows an estimated turnover of R721 billion equivalent to 15,7% of the total country’s GDP. Its 865 franchise systems support over 45 000 outlets operated by franchisees who in turn employ 369 573 people.

This contribution to the South African economy by the franchise sector has continued on an upward trajectory in spite of adverse economic conditions, socio-political factors and often challenging business regulations. The Franchise Association of South Africa (FASA), which has represented the sector for the past forty years, welcomes the forward-thinking intentions of President Cyril Ramaphosa and Finance Minister Tito Mboweni who promise a ‘new dawn’ for the country, with the need for strong public/private partnerships’.

President Ramaphosa’s comment that ‘we should treat our entrepreneurs as heroes and stop treating our business people as enemies’ is welcomed and appreciated by the thousands of entrepreneurs and businesses that make up the backbone of our country, says Vera Valasis, Executive Director of FASA. “As a sector that is often overlooked as we operate universally over all sectors, we have, since those first franchises established themselves in the 1960’s, continued through the good and bad times to innovate and establish new businesses, develop skills and above all contribute to job creation. The fact that over 80% of our franchise brands are home-grown is testament to our commitment to growing the economy for the benefit of all its people.”

Sanlam, which offer financial services geared at helping sustainable businesses through surety protection, continuity cover, income protection cover and investment solutions, have a vested interest in ensuring that businesses and franchises continue to grow and prosper. “Our role as financial service providers is to give businesses the necessary financial tools to ensure that they operate sustainably to succeed” says Kobus Engelbrecht, Marketing Head: Sanlam Business Market. “The franchise sector has proved, through its stellar growth over decades that it is one of the most dynamic business formats of our time and we are proud to be able to play a part in tracking their success.”

Says Vera Valasis, Executive Director of FASA, “Sanlam’s brand has become synonymous with the annual franchise survey and without the company’s absolute belief in the economic contribution brought by entrepreneurs much less would be known about the incredible role franchising plays in job creation, skills development and enabling financial freedom for many a successful franchisor and franchisee. We thank Sanlam for their contribution and commitment to improving the credibility of franchising as a successful business model.”

The Sanlam/FASA Franchisor Survey tracks the industry performance of Franchisors and the Franchisee Survey looks at the satisfaction levels of the franchisees that operate within those brands. Survey results can be viewed on https://www.fasa.co.za/survey.php

Global Recognition for Signarama Southern Africa

2018-11-08T08:59:00.000+02:00

An important (and highly anticipated) event on the Signarama calendar is the World Expo which recently took place in Cancun, Mexico. Southern Africa was well represented at the event which took place from 23-27 October.

The event is the meeting place for Signarama franchisor and franchisee partners from around the World. The event is an opportunity for everyone to learn the best practices across various aspects of the business, to receive motivational messages from top international business experts, to receive updates on the latest global technologies in the signage and branding industry, and importantly to recognise the top achievers in the Signarama network.

Signarama Southern Africa franchisor, represented by Kurt Tyack, received the award for the Master Partner of the Year as the top performing Signarama country network in the World (outside of the US and Australian markets). The award is the culmination of a great deal of hard work, and was accepted with a great deal of pride by Kurt Tyack in Cancun. “This award is testament not only to the work put in by everyone at the Signarama support office in South Africa to develop and grow the brand, but also the hard work put in every day by our incredible network of franchisee partners”, explained Tyack.

Kurt Tyack proudly displaying the Master Partner of the Year Award

The hard work by the Signarama franchisee partners is no more evident than in the case of Pretoria North franchisee, Francois Schoeman, who was admitted to the Signarama Global Million Dollar Circle. Schoeman, the current Signarama Franchisee of the Year in South Africa, was in Cancun to accept the award. Admission to the Million Dollar Circle is no mean feat – this is an exclusive club of Signarama franchise owners who have exceeded sales of US$1m in a calendar year.

In the process of achieving this, Schoeman has achieved several milestones in South Africa. His recent move to a larger 1200 square metre manufacturing facility has allowed him to improve service and turnaround times for his clients. “Being part of the Signarama brand has really helped me to grow a successful, profitable business”, said Schoeman. “I was extremely proud to accept the award on behalf of my team at Signarama Pretoria North. The Cancun trip was a real eye opener, and being able to learn from the franchisor and from other franchisees and share their success has ignited the fuse for our future growth. We have a plan to double sales and profitability within 24 months.”

Francois Schoeman (L), receiving his Million Dollar Circle Award from Global brand president, AJ Titus

The event has also provided some valuable insight into where the industry is going, and what is possible when owning a Signarama franchise. The top performing Signarama franchisee globally has sales in excess of US$7m annually. In an industry where technology is evolving, the knowledge shared across the Signarama network ensures that Signarama clients are assured of excellent products, quality, and service.

If you require any signage or branding please visit www.signarama.co.za to get in touch with your local expert. If you are interested in owning a Signarama franchise please visit www.signfranchise.co.za to find out more about this dynamic business.

What does franchisee support entail?

2018-11-06T13:46:00.001+02:00

Over the past few months, we have published a series of articles designed to encourage those of you who want to go into business for themselves but not by themselves to consider investing in a franchise. We stressed that whilst there are no guarantees, operating under an established brand and with the franchisor’s full support improves a newcomer’s success chances considerably. Fair enough, but what does franchisee support consist of?

After examining accepted best practice on this topic, we ask Tony da Fonseca, managing director of the OBC Group and chairman of FASA, to tell us how his organisation handles the franchisee support function.

Franchisee support – what does the term mean?
After looking at several local and international examples of best practice in franchisee support, we concluded that whilst business sector-specific differences do exist, a set of overarching principles applies to any and all franchises.

First and foremost, a clear distinction must be made between initial and ongoing franchisee support. Regardless of the type of franchise, newcomers will require a very different set of support initiatives than franchisees who have been part of the network for several years.

Initial franchisee support
Initial franchisee support covers a wide range of disciplines. The overarching objective is that the new franchisee is ready to commences trading and reaches profitability as quickly as possible. It will typically cover some or all of the following:

Guidance regarding the drafting of funding applications, company registration and statutory registrations.
Assistance with site selection and lease negotiations.
The provision of specifications and the sourcing of suppliers for the decorating and equipping of the premises in the most cost-effective manner.
Initial training in all aspects of operating the business according to the blueprint.
Assistance with staff recruitment and training.
Commissioning of the operation prior to the Grand Opening to ensure flawless operation from day one.
Grand Opening and hand-holding during the initial period.

The importance of initial franchisee support cannot be overemphasised. Experience has shown that it impacts heavily on the quality of the on-going franchise relationship.

Ongoing franchisee support
The overriding objective of ongoing franchisee support is two-fold: Customers’ brand expectations must be met and the franchisee’s business must be profitable. More specifically, ongoing franchisee support revolves around:

Vibrant national marketing, brand-building and advertising programmes.
Assistance with local marketing initiatives and their synchronisation with national initiatives.
Negotiating supply deals granting the franchisee access to the preferential supply of goods and services.
Providing ongoing training, motivation and coaching.
Developing initiatives designed to enhance the franchisee’s profitability.
Creating a platform for the exchange of ideas between the franchisee, the franchisor and other franchisees in the network.
Conducting performance audits focussing on compliance with network-wide quality and CI standards. *

* It might surprise some of our readers that we list performance audits as a support function. If so, consider this: The network’s standards have been developed to optimise business performance. Unless the franchisee adheres to these standards, projected performance figures are highly unlikely to be achieved.

Tony Da Fonseca

This then is the theory of franchisee support. As a next step, we wanted to find out how an award-winning franchisor provides franchisee support. OBC Chicken and Meat is an award-winning national retailer and a member of FASA. We decided to ask their managing director, Tony da Fonseca, who is also the chairman of FASA, to give us an insight how his company handles the issue.

Q: How seriously does OBC take initial franchisee support?
A: We take it extremely seriously. We have a formal training programme in place that combines classroom training with days spent at one of our company-owned stores. Duration of the programme varies; the minimum period would be one month but we adapt it to the new franchisee’s experience. One thing is certain: We won’t allow a newcomer to operate under our brand until we are satisfied that brand integrity and our standards of customer service excellence will be upheld.

Q: Do you assist new franchisees with site selection?
A: We most certainly do. Members of our senior management team work with the new franchisee to find an optimal site and I am personally involved in its final approval. We also assist with lease negotiations and our inhouse legal consultant scrutinises the lease. We won’t allow a franchisee to accept lease conditions that are likely to destroy the profitability of the store.

Q: What about fitting-out the store?
A: Following the signing of the lease, our store development team takes over. We offer our franchisees a turn-key service. This means that we handle the entire store development process from having site-specific plans drawn up to the point when the store is ready to trade.

On completion of the franchisee’s training, which normally takes place during the period the store is fitted out, we assist with staff recruitment and training, the placement of initial purchase orders and the merchandising of the store.

Q: Do you arrange for a Grand Opening?
A: Absolutely. We inform our suppliers of new store openings and normally manage to secure some very attractive specials on the franchisee’s behalf. We also prepare pamphlets announcing the opening and arrange for their distribution within the target area.

A few days before the Grand Opening, we ensure that everything is as it should be and on D-day, our team is out in full force to offer moral support. As a rule, one of our experts spends a few days at the store to ensure that everything settles in nicely.

Q: Impressive, but what about ongoing support?
A: It gets without saying that we take this seriously as well. For starters, we operate a state-of-the-art distribution facility that enables franchisees to place orders at highly competitive prices and receive delivery according to Just-in-Time principles. This virtually eliminates the risk of stock outages without franchisees having to carry excessive stock.

In this context, I must stress that franchisees are not obliged to purchase from the OBC Distribution Centre. We compete for their business with suppliers on the open market. The only exception is our range of house brands which every franchisee is obliged to carry.

Q: Do you conduct store audits?
A: The area manager responsible for the territory visits the store in intervals of between one week and four weeks, depending on need. His main role is not that of a policeman but to assist the franchisee to drive sales and enhance profitability. Store audits are part of this process. Their prime purpose is to uncover problems and they are shared with the franchisee. We then work with the franchisee to rectify them. Quite clearly, this is in mutual interest.

Subject to need, our area managers can request assistance from merchandisers or other specialists employed by Head Office. I can honestly say that our franchisees receive all the help they need to deliver customer service excellence and enhance the profitability of their stores.

Q: Store visits aside, is there any other interaction with franchisees?
A: Most definitely. The OBC Advertising Club is made up of franchisees elected by their peers and head office representatives; it is chaired by a franchisee. This body meets monthly to plan forthcoming promotions and discuss other issues of concern.

Once a year, we arrange a national meeting of franchisees during which we discuss strategy followed by a celebration of the year that was. This is more than an empty statement. I can say with some pride that the difficult economic times we experienced in the recent past, OBC had consistently reason to celebrate successful trading results.

Q: Deviating from the topic of franchisee support for a moment, is the OBC Group actively looking for franchisees?
A: Given that we are expanding rapidly, we are always looking for new sites and this requires new franchisees. I must add, though, that in both instances, it’s a matter of quality over quantity for us. We will not accept an applicant as franchisee, or a site offered to us, unless we can be reasonably certain that the arrangement will produce a profitable outcome for all stakeholders.

Tony da Fonseca, this has been fascinating. Thank you very much for your valuable insights.

Readers wishing to find out more about the OBC Chicken and Meat franchise can click here. Alternatively, contact Marketing and Business Development Manager Robbie Capazorio – robbie@obcgroup.co.za – or phone him on 082 3377747.

How employers can protect vulnerable employees' retirement savings

2018-11-06T12:08:00.001+02:00

Pavit Ramnarain

Given the volatile nature of local markets in recent years, smooth bonus funds have increased in popularity among cash-strapped South Africans seeking a more stable ride to retirement. This most likely shows that South Africans, especially those who are most vulnerable, are opting for all the protection from market volatility that they can get.

The results from the latest Momentum / UNISA Consumer Financial Vulnerability Index (CFVI) reveal a worsening trend across all indicators of financial vulnerability. In light of this, Pavit Ramnarain, Actuary at Momentum Corporate, believes that employers and retirement fund trustees could protect retirement fund members by offering them the best possible investment solution for their retirement savings – both in terms of capital guarantees and highly competitive fee structures.

“We believe that a combination of low financial literacy and capability levels, as well as poor consumer financial behaviour, are the core underlying reasons for financial vulnerability – a term that refers to a sense of insecurity or inability to cope financially.

“However, given the increasingly volatile local market environment, it is understandable that saving for retirement can often be pushed out as a last priority for many. It is therefore critical that all members, but especially those who are particularly vulnerable, be given the best possible chance of achieving their retirement and investment outcomes.”

This belief, Ramnarain says, is very much aligned with the intentions of the new retirement fund default regulations, which are intended to steer retirement outcomes in the right direction. “By requiring trustees to offer members a default investment portfolio that is not excessively complex or unreasonably expensive, these new regulations will assist in providing cost-effective and value-for-money investment solution to fund members.”

“Financially vulnerable employees tend to be more risk averse, largely as a result of financial insecurity and distrust. It is crucial that a default investment portfolio for these members provides an opportunity to generate inflation beating returns to maintain the purchasing power of their savings while at the same time offering at least a capital guarantee to protect them against adverse market movements. An investment portfolio that is able to offer both at a lower cost than other solutions will mean that more money can be channeled towards members’ accumulated retirement benefit” adds Ramnarain.

Ramnarain believes that a new generation of smooth bonus portfolios is required. “The process of smoothing essentially holds back some of the returns in a reserve when markets are doing well and releases these reserves when markets are performing poorly – minimising the impact of market volatility for as long as the member is invested,” he says.

However, considering the steep fees and costly guarantees that are typically associated with smooth bonus funds, a new-age product would need to be designed specifically to protect the most vulnerable employees by offering all the benefits of smoothing, a 100% guarantee, but all at the lowest cost possible.

Ramnarain says the high capital charges come down to the expensive nature of providing investors with a guarantee on the money they invest (referred to as the “capital” amount) and on part of or all future bonuses. “These guarantees, while integral to capital protection when the market is not performing, can be so expensive that they actually end up eating into returns, because the capital charges are normally deducted from your growth,” he says.

Ramnarain says investors need a high capital guarantee now more than ever. “A 100% capital guarantee is essentially a shield from loss, no matter what happens in the market. This means that if an investor were to exit a smooth bonus fund at benefit payment stage when markets are at a low, they would be guaranteed to get 100% of the money that they had invested together with any guaranteed bonuses that were declared.

“Without this guarantee, the unfortunate and untimely occurrence of a benefit payment (death, disability, resignation, retirement or retrenchment) during a market slump could have a serious effect on the financial future of both the member and their dependents.”

Ramnarain says that new-age smooth bonus funds need to drastically reduce capital charges while still providing for a 100% capital guarantee. Costs should be further reduced by combining passive, smart-beta and active investment strategies. Smart beta emulates the lower costs of passive investing while still capturing some benefits of active management. However, this should not come at the cost of any benefits of smoothing.

“By reducing the capital charge and applying a combination of investment strategies, the total cost of the fund will be reduced, which means more money can be channeled towards members’ accumulated retirement benefits. The fund should also be underpinned by a proven investment track record. Although past returns are not an indication of future performance, the underlying investment portfolio should be delivering solid investment performance. A low cost, high guaranteed smooth bonus fund is exactly what the most vulnerable members need,” he says.

4 Top tips to find your best franchise opportunity

2018-11-06T10:36:00.001+02:00

Richard Mukheibir

Several years of strong sectoral growth combined with business opportunities that are often backed by an investor safety net is making franchising the top choice for many who want to own their own business. This assessment is based on the strong foundations of my own experience of establishing Cash Converters nearly a quarter century ago and the recent results of Franchise Association of South Africa (FASA) annual industry survey.

These figures show that the SA franchise industry has grown its turnover by 55 percent from R465 billion in 2014, when FASA conducted its first survey, to R721 billion in 2017. Alongside this, the sector’s contribution to South Africa’s GDP has expanded by 62 percent, from 9.7 percent in 2014 to 15.7 percent in 2017.

The President’s recent Job Summit highlighted the critical need to reduce unemployment and boost the national economy by growing business and stimulating job creation. The franchise sector employs 369 573 people, 93 percent employed by individual franchisees rather than franchisors.

Franchising can be a win-win for franchisees. It enables you to make your dream of running your own business come true as well as contributing to providing much-needed new jobs.

These factors make franchising a particularly attractive option for those wishing to start their own business. But with 865 different franchise systems active in the country last year, the huge range of choice can be confusing.

To prevent analysis paralysis and ensure you can get set to make the most of franchising, I can offer four top tips for selecting the best franchise opportunity for you:

1. Choose a credible brand: As you shortlist franchisors that appeal to you, go beyond what they tell you about themselves and find out about what people are saying about them. Do social media searches to find out how consumers are reacting to the product or service offered, pricing and customer service. Your franchise fee should buy you a halo effect thanks to your franchisor’s good reputation. Too much negativity around the brand will affect the potential success of your franchise, from your ability to attract customers and the turnover and profit you can hope to generate.

2. Look for a proven business model: A worthwhile franchise shares with franchisees the intellectual property it has developed over the years. It has created and grown this business model over time, knocking off rough edges and fine-tuning systems for mistakes as they become apparent. Check the brand’s news history online as well as its own sales material. Be wary of any franchise that claims to be perfect or invincible. Nobody is – so either it has something to hide or it is fooling itself. Either way, such a brand is not keeping its eyes open to navigate the brand and its franchisees through the changing fortunes of business.

3. Check the support systems: Getting relationships and systems right is vital in business success. They have become even more important since we founded Cash Converters nearly 25 years ago because the volume of legal compliance has mushroomed. Make sure that the franchises you shortlist offer you support in coping with this and that those running the brand are in touch with what happens on the ground in the franchisees’ stores. At Cash Converters, for example, our front-end support staff are in stores every day and the directors devote three days each month to visiting stores. This ensures that our expertise is available to guide the franchisees through any business issues they face.

4. Follow the recipe: When you sign up with a franchisor, you receive access to its business model, including the “recipe” for running your franchise. This forms a kind of safety net so you do not need to reinvent a wheel when setting up your business. But you cannot complain that the business model does not work if you do not implement it. This is one of those times when you must follow the recipe to bake the cake successfully. If you are not the kind of person who wants to do that, then think again about whether franchising is for you.

Trading and entrepreneurial instincts are key elements of the business DNA of Cash Converters Southern Africa co-founder and managing director Richard Mukheibir. He traces his family’s lineage in small business development back more than a century to his grandfather who founded Mukheibir Brothers in Barkly East in 1897. Mukheibir co-founded Cash Converters Southern Africa with Peter Forshaw in 1994 and has now been involved with franchising for nearly a quarter of a century, thriving on its energy and the people-driven environment.

Stress management key to growing a small business

2018-10-29T14:53:00.000+02:00

Jeremy Lang

Many South African small and medium enterprise (SME) owners are grappling with the stress and strain of running a business. This was confirmed by the findings of the second quarter 2018 SME Confidence Index, which reveals that 76 percent of the SME owners surveyed say that the pressure of running their own business can sometimes be overwhelming and limit their potential.

Stress, however, is in many ways inevitable for entrepreneurs. So in light of Mental Health Awareness Month, Jeremy Lang, regional general manager at Business Partners Limited (BUSINESS/PARTNERS), says that it is vital for entrepreneurs to know how to manage their stress in order to prevent it from negatively affecting their physical and mental health, which in turn may have a detrimental impact on their business’ growth.

The first step to better manage feelings of being overwhelmed, according to Lang, is to understand the underlying reasons for the stress and ensure that the corrective measures are in place. “For example, many SME owners in South Africa are currently – either consciously or unconsciously – concerned about how the depressed economic landscape will impact their businesses.

“Although entrepreneurs – being agile, solution-driven thinkers by nature – will thrive in spite of difficult circumstances, it is a good idea to proactively prepare for difficult economic conditions by ensuring that the business has adequate liquidity reserves in place,” he says.

As it is often said that entrepreneurship can be a lonely road, Lang points out that it is key for a business owner to have a reliable and trustworthy management team in place to relieve them from day-to-day operational burdens when necessary. “This will not only free up time to focus on what is needed to run and grow the business, but also allow a business owner time to focus on their own wellbeing.”

Lang adds that entrepreneurs should also ensure they have a good support structure in place through family, friends or mentors to assist in getting through those difficult periods. A visit to a health practitioner is also advisable.

“In order to operate at peak performance, physical health is imperative. Entrepreneurs should ensure that they schedule time to exercise, go for regular checkups, maintain a balanced diet and get enough quality sleep,” he notes.

“When times are tough, SME owners should take a step back and remind themselves why they became an entrepreneur in the first place – this passion and motivation can go a long way towards helping them in dealing with those difficult days,” Lang concludes.

B-BBEE: The franchise sector weighs in

2018-10-29T12:44:00.000+02:00

A relatively large number of players in the franchise sector are lagging behind with the implementation of meaningful B-BBEE initiatives. This could create the impression that the sector resists transformation but this is not the case at all. We decided to examine the situation and came up with the following findings.

Problem statement

Transformation in the franchise sector has indeed been slow. This is an unintended consequence of the criteria for transformation set out in the B-BBEE Act. The Act lists five elements for compliance: Ownership, management control, skills development, enterprise development and socio-economic development. The weightings applied in terms of the Act placed emphasis on ownership and management control. Meeting requirements in these two areas created difficulties for franchisors and their franchisees alike.

FRANCHISORS

Responsible franchisors pride themselves on assuming moral responsibility for their franchisees’ success chances. This forces them to take into account that for historic reasons, many prospective franchisees drawn from the PDI grouping lack access to sufficient funding. They also know that even if a lender can be found who is willing to advance near 100% of the capital required, the resulting repayments will cripple the business before its owner had a chance to show his mettle.

This does not mean that up to now, franchisors haven’t contributed towards righting the wrongs of the past. At a recent FASA event, Greg Solomon, managing director of Macdonald’s South Africa, remarked, “Some franchisors are doing much in terms of social upliftment and so forth but are generally not receiving the recognition they deserve.”

His comment is not a lone voice in the wilderness. In the Business Newsmakers column of the Sunday Times of 21.10.2018, Gareth Ackerman, chairman of Pick n Pay and major franchisor, lamented the distrust that exists between government and business. He said that government seems to think that business is doing nothing, making no investments, just relying on government to do everything but this is not the case. “A lot of companies do a hell of a lot, but the government needs to be made aware of what they are doing. This would start a multiplier effect happening in the economy,” he said.

FRANCHISEES

During 2017, the value of business conducted through franchised networks (excluding motor vehicle and petrol sales) amounted to 15% of South Africa’s GDP. In many individuals and probably also in government circles, this creates the perception that franchised brands are extremely powerful. Indeed, they are but the sector’s structure breaks this down into many individual islands of power.

Fact is that their uniform appearance notwithstanding, the majority of branches of franchised chains are owned and operated by individuals and their families. Because of family ties, owners of these businesses find it difficult to make shares available to non-family members or appoint them to their boards of directors.

The annual FASA/Sanlam survey into franchising in South Africa* confirms this. It tells us, among other things, that the franchise sector consists of 865 brands. These brands conduct business through more than 45,000 individually owned and largely family-managed business units.

The same survey records that in 2015, it took an average of 6 months for a new franchised outlet to reach the all-important breakeven point. Fast-forward to 2017 and the corresponding figure has ballooned to over 12 months. It is easy to see that this puts additional pressure on cashflows and requires a commensurate increase in working capital.

* The complete survey can be accessed free of charge on www.fasa.co.za.

An opportunity not to be missed

The B-BBEE Act is currently undergoing a revision. Indications are that although the five elements of the revised Code will substantially remain the same, weightings will change. Most notably, the weighting for Enterprise Development is expected to increase to 40%. Although tackling this one element only will not result in an acceptable B-BBEE rating, it offers franchisors and their franchisees the opportunity to make an immediate, meaningful and sustainable contribution towards their B-BBEE obligations.

All that’s required from franchisors is that they assist qualifying suppliers to achieve preferred supplier status within their networks before guiding their franchisees towards utilising this up to now underutilised pool of suppliers.

Positive acceptance

Early indications are that the franchise sector welcomes this development with open arms. To facilitate this development, the Transformation, Stakeholder and Funding Committee of franchising’s representative body, FASA, launched the FASA Supply Chain Transformation Initiative (SCTI). This initiative aims to provide a link between franchisors, their franchisees and qualifying suppliers of goods and services.

Tony da Fonseca

At the formal launch of the SCTI initiative, Tony da Fonseca, chairman of FASA and managing director of the OBC Group, said: “Our members are perfectly willing to play their rightful part in the transformation process. Unfortunately, they have found it extremely difficult in the past to locate reliable transformed suppliers with the capacity to meet their networks’ supply chain requirements in every respect.

“To overcome this apparent deadlock, the FASA Transformation, Stakeholder and Funding Committee initiated the SCTI. We knew that to get this initiative off the ground would require the creation of a database of transformed suppliers. We also knew that to do this from scratch, and do it well, would exceed FASA’s resources by a wide margin. That’s why we were delighted when Proudly South African (PSA) agreed to partner with us on this exciting journey.”

Eustace Mashimbye

Eustace Mashimbye, CEO of PSA, added: “The organisation I represent is the country’s Buy Local Advocacy Campaign Group. Our mandate is to promote the development of sustainable local businesses and create sustainable employment opportunities. Before we accept a company as member, we undertake an extensive vetting process. Among other things, we look at the quality of the products/services the applicant offers, local content and production capacity.

“I welcome the tie-up with FASA and am delighted to facilitate access to our membership database by FASA. I expect that this will drive enquiries for products and services offered by our members and eventually, result in purchase orders, for mutual benefit. Our members will benefit greatly from exposure to the substantial combined purchasing power of the sector.”

Akhona Qengqe

At the same event, Akhona Qengqe, chairperson of FASA’s Transformation, Funding and Stakeholders Committee and director of Transformation, Diversity and Inclusion at Yum, provided ample food for thought by making the following points:

At its core, B-BBEE is a growth strategy that targets the South African economy’s weakest point, namely inequality. Social peace and lasting prosperity cannot be achieved unless everyone who does business in South Africa accepts that and makes a meaningful contribution.

Because franchising is all about brand awareness, skills transfer, initial and ongoing support and mentoring, the sector is uniquely positioned to achieve superior and sustainable results.

Seeing that the franchise sector is a substantial contributor to the South African economy, it has the power to make a real difference. This is not only in the realm of offering franchises to PDIs but even more so by driving transformation through the supply chain. This was the rationale for launching the SCTI in the first place.

Because the PSA is partnering FASA in promoting this initiative, franchisors have access to a database of reliable and fully transformed suppliers. Dealing with them contributes directly to local enterprise development and job creation.

I want to encourage all franchisors, both members and non-members, to utilise the FASA Supply Chain Transformation Database. Users will find a diverse and steadily growing range of quality goods and services on offer.

It is early days yet but franchisors wishing to find out more about the FASA Supply Chain Transformation Initiative should contact FASA on info@fasa.co.za.

FASA signs MOU with Small Business Institute to make a difference and lobby government

2018-10-26T07:02:00.003+02:00

With Minister of Finance Tito Mboweni’s mini-budget speech still resonating and giving some hope with his call that ‘together, as a country, we can rebuild and recast our future... and choose a path that takes us to faster and more inclusive economic growth and strengthens private and public sector investment,’ the Franchise Association of South Africa (FASA) signs a Memorandum of Understanding (MOU) with the Small Business Institute (SBI).

According to Vera Valasis, FASA’s Executive Director ”the collaboration with SBI will provide FASA with an official ‘voice’ to be represented and lobby through the SBI at BUSA level on business related issues that arise on a regular basis. We hope our involvement with both the SBI and BUSA will help strengthen the voice of small business and franchising in particular to government.”
The Franchise Association of South Africa (FASA) has a proud 40 year history of nurturing entrepreneurship through the franchise business system and oversees an industry that today boasts 865 franchise systems, over 40 000 small businesses employing close to 400 000 people and contributing R721 billion equivalent to 15,7% of the total South African GDP.

“Through a wide range of socio, economic & political challenges over the past four decades,” says Vera Valasis, Executive Director of FASA, “franchising has continued to make an important contribution to the economy. We want progressive leaders in government such as President Cyril Ramaphosa and Minister Tito Mboweni, both with impeccable business credentials, to recognise that the franchise sector has and can continue to play a crucial role in entrepreneurship, skills transfer and job creation. We recognize the importance of the business community rallying together to ensure that with strength in numbers, it can grow to benefit all in our country. To this end, FASA has embarked on a number of collaborations with like-minded institutions and organisations like SBI – with the express intention of playing our part along that road of prosperity and opportunity that Minister Mboweni has chosen.”

FASA, whose members are franchisors, franchisees, professional service providers, product suppliers and individuals and whose mission is to promote ethical franchising and the SBI, a non-profit (NPO) organization constituted to promote the economic and business interest of its more than 100 chamber organization members and thousands of SMEs in the wider economy, share a common goal and look forward to collaborate in the following areas of mutual interest:

Government and other stakeholder lobbying
Dissemination of industry information
Reciprocal promotion of industry events

The SBI is a member of Business Unity South Africa (BUSA) and stand for

Sustainability
Market-led job creation
Inclusive economic growth
Transformation and
Ethical leadership

For SMME’s, one of the biggest challenges and obstacles to overcome and boost economic growth, is the regulatory environment. Winda Austin-Loeve, SBI President, says influencing the regulatory environment through the SBI’s representation on BUSA is one of the main reasons for the MOU between the SBI and FASA. “The SBI will lobby on a national level on behalf of all its members and partners in an attempt to get legislation and regulations passed that create a favourable and friendly climate for SMME’s to build and grow long-term sustainable businesses that will ensure job creation and economic growth.”

A Perspective on The Tax Shop Franchise Value

2018-10-24T07:40:00.002+02:00

Nico Viljoen

Written by Nico Viljoen, Executive Director, The Tax Shop Franchise Group

The term ‘brand’ originally derives from traditional farming practices, where farmers used branding irons to mark their animals, so that they knew which animal belonged to which farm.

The term was later adopted by producers of consumer goods to distinguish their product from others that were similar. ‘Coca Cola’, and ‘Pepsi’ are obvious 20th century examples of this. A brand became the name which told the client or consumer the source of a service or product.

In today’s world of sophisticated marketing communications, the brand concept has become more complex. The term ‘brand’ no longer only refers to the name of a service or product, it extends to a company’s whole offering – ‘the intangible sum of a service’s or product’s attributes’ as David Ogilvy put it. The Tax Shop Franchise is a strong brand that provides value to the organisation well beyond its tangible worth.

But, what is The Tax Shop Franchise brand value?
Brand value refers to the financial value of a brand. It results from many factors of which brand equity (responses based on recognition, associations and judgements of the brand made by the consumer) is just one of these. The Tax Shop Franchise brand value can be considered in a variety of ways: the cost to The Tax Shop franchisee of replacing the The Tax Shop brand with an equivalent one; the price which other firms have paid for similar brands; and the impact which The Tax Shop brand has on future earnings for The Tax Shop franchisee.

Now what constitutes The Tax Shop Franchise brand?
It is The Tax Shop Franchise business’ intangible assets, like trade marks (logo’s), reputation, recognition, system and other forms of intellectual property (IP), and it is these assets that need protection if The Tax Shop Franchise is to thrive. The Tax Shop Franchise brand protection doesn’t stop at trade marks. There are other forms of intellectual property protection that matter as well, such as copyright, database rights, design rights and confidentiality of information.

The Tax Shop Franchise protects confidential information, including know-how and trade secrets which are a key part of The Tax Shop Franchise business model through legally sound confidentiality and non-disclosure agreements. The Tax Shop Franchise operating procedures, our website, various other systems and strategic associations are immensely valuable assets to The Tax Shop Franchise business, and robust procedures are in place to protect it.

Takeaway: Franchise value does not refer to the traditional franchise business model, but instead is used to describe a company or brand that has such superior popularity - it has extraordinary ‘mindshare’ among clients or consumers; that, all else equal, it is the one brand associated with a service or product they are going to reach for on the ‘shelf’.

Buying a franchise, and particularly The Tax Shop Franchise, works best for individuals who work well in a team environment and who will benefit from access to a community of professionals with sound business and industry background. Before finalizing your decision about buying into a franchise operation, include your family in the deliberations, because being the franchise owner takes a lot more time and energy than you might think, and your family will be affected the most by your choice.

For more information about The Tax Shop Franchise, click here.

Family business’ entrepreneurial spirit trumps tough times

2018-10-22T08:29:00.002+02:00

Leonie Finch

The current economic landscape is having a detrimental effect on both consumer and business confidence, however, PWC’s Family Business Survey: New vines from strong roots 2016/2017 reveals that South Africa’s family business sector is set for quick and aggressive growth over the next five years.

This is according to Anton Roelofse, Regional General Manager at Business Partners Limited (BUSINESS/PARTNERS), who says that the report reveals that whilst other businesses are struggling to create revenue, around 78 percent of South African family businesses reported growth during 2017, and 62 percent are expecting to grow steadily over the next five years. “These growing businesses are essential to bolster the struggling economy, so if a person finds themselves in a position to take over a family business, this may be a great opportunity for them to consider.”

Taking over a family business, however, can be daunting for many reasons, says Roelofse. For Business Partners Limited’s client, Leonie Finch, co-owner of Solomon Coatings – a Cape Town-based powder coating business - being one of the few female owner-managers in a very male-dominated industry paled in comparison to filling her father’s considerable entrepreneurial shoes, but she stepped up to the plate nonetheless.

Explaining where her journey began, Finch says that she grew up on the Cape Flats where her father, Tommy Solomon, ran a small team of plasterers. “Our thirty-year-old family business, Solomon Coatings, began when my mother complained that the company where she worked as a buyer was struggling to find a local powder-coating business that could do the job in less than two weeks.”

For as long as Finch could remember, her father had always jumped at an opportunity and wasn’t afraid to teach himself how to do new things. “He set about finding out as much as he could about the process of spraying metal objects with a special powder, which then gets baked onto the surface as a durable, rust-resistant layer. The more he found out, the more convinced he became that there was a real opportunity, and in 1988, he opened a tiny powder-coating workshop in Blackheath.

“He managed to convince an investor, who became a silent partner, to put up some of the capital. For months, my dad worked so hard at the business that he slept in the workshop, and slowly but surely the operation started growing. It also helped that the Small Business Development Corporation – the precursor of Business Partners Limited – gave him a loan to expand his business,” she adds.

A turning point for the business came in 2010, when Solomon was diagnosed with cancer.
“However, the scare prompted me to secure the family’s control of the business. I then approached my father’s silent partner, took money out of my bond, and bought out his shares in the business.

Finch points out that today she owns 51% of the business and her father, who is still officially the managing director, 49%. “Despite the fact that there are more than 80 powder-coating operations in Cape Town today - there were only eight when the business was started - Solomon Coating has managed to achieve substantial growth over the last few years.”

This growth has allowed Solomon Coating to purchase a new 2000m2 premises in Blackheath, close to their previous premises. Business Partners Limited gave them a 100% loan in return for a minority share in the building.

“Entrepreneurs have inherent characteristics - one being the ability to weather the storm. As such, those who are in line to takeover a family business should not be daunted, but rather be inspired by those before them, have faith in themselves and take note of any lessons they can learn from their entrepreneurial parents to successfully run and grow a family business,” concludes Roelofse.

Emerging markets at the mercy of many

2018-10-22T08:09:00.000+02:00

Sanisha Packirisamy

What Italy’s debt issue and China’s counter-trade-war efforts could mean for SA

As far removed as countries like Italy, China and Turkey may appear to be from South Africa, the local economy has been, and will likely continue to be, negatively impacted by the wide array of seemingly unrelated market issues – such as Italy’s debt woes and China’s retaliatory reaction to the US trade war – through a contagion effect.

This is according to Sanisha Packirisamy, economist at Momentum Investments, who says that financial markets in South Africa are particularly vulnerable because of their depth and high level of liquidity. “While investor jitters started in Turkey and Argentina, where economic mismanagement was evident, financial markets in these countries are not as deep and liquid as South Africa and Brazil, which have been targeted in the latest risk-off episode. It is therefore far easier for investors to get out of positions in these tradeable markets, and as a result, our local economy is impacted.”

The relative ease of exiting positions in South African financial markets, Packirisamy explains, is why South African citizens are negatively impacted in an emerging market-wide risk-off episode. “When the currency sells off in response to investor fears, the rand becomes cheaper against major currencies. Sustainable currency depreciation can have a negative effect on inflation outcomes and this could lead to a rise in interest rates if inflation threatens to exceed the 3% to 6% target band for an extended period of time.”

Zoning in on the situation in Italy, Packirisamy says that debt concerns present a risk to global financial markets given the interlinkages between Italian banks and a number of other economies. “Should Italy default on its debt, it would create uncertainty in the markets given Italy’s size and interconnectedness.

“In a risk-off environment, investors actively seek out less risky assets. Capital tends to stay at home rather than find its way into riskier markets – which is what South Africa is currently perceived to be – as a precaution to prevent potential losses,” she explains.

Packirisamy notes, however, that out of all of the emerging markets, China is likely to impact the South African economy the most in this respect. “China is one of South Africa’s largest trading partners, and if Chinese growth softens and demand slows, it would likely diminish South Africa’s exports to the region.

“China is also a key user of global commodities and South Africa is a net exporter of commodities. If China’s demand for commodities drops, the price of commodities that South Africa supplies to the rest of the world could drop, triggering a negative terms-of-trade (export prices relative to import prices) shock,” she adds.

While conceding that the rand is likely to remain on the back foot if uncertainty in these emerging markets persists, Packirisamy warns South African investors against making any impulsive investment decisions. “The reality is that as long as global investors paint all emerging markets with the same brush and remain hesitant to get back into risk assets, the rand could suffer.

“However, for investors with well-diversified portfolios and long-term investment goals, this is the worst time to start moving things around. The best thing that South Africans can do to protect their investments from these market fluctuations and the current high level of global uncertainty is to stay calm and prevent making rushed short-term decisions,” she concludes.

Cam Era's franchise opportunity just got bigger

2018-10-17T10:16:00.004+02:00

Cam Era’s security franchise business is based around the incredibly successful French verification alarm called VIDEOFIED.

Because the Videofied alarm system has a discreet surveillance camera built into it, the Armed Response companies have introduced Priority/Panic Response as a way to change the way calls are being handled in the industry, once a verified alarm has been captured.

How does this work?
By making use of video verification from a 10 second Video clip sent out by the system automatically.

Cam Era’s MD explains that “Video verification is now available as an upgrade to any current alarm system”. Meaning that our franchisee’s clients can now afford to upgrade their existing alarm, to “LIVE VIDEO VERIFICATION” which is received at the Macado Command Centre (MCC).

No more false alarms
We believe that this aspect will become an insurance pre-requisite in the future, and they will insist that ALL commercial, industrial and high-risk residential sites should have video verification linked to their existing alarm systems. In an emergency, response seconds matter. When customers need an armed reaction service, getting the right teams to their location with the right information can make all the difference between living or dying. A short video clip can also help the MCC guide the officers on-site, where and how many assailants they will be facing.

What is Priority Response?
South African residential and commercial customers are constantly under pressure to remain ahead of the crime surge in the country. At the same time, security companies that offer an armed reaction service are constantly looking for ways to increase and improve their reaction times to genuine crimes in progress.

With over 99% of all activations currently being false alarms, it makes good business sense to verify why the alarm was triggered before mobilising a reaction team. Videofied Priority Response now gives MCC the ability to verify the alarm and therefore inform Armed Reaction (AR).

Traditional burglar alarms

Typically, over 99% of alarm calls are false alarms, because they are ‘blind’.
Don’t know why the alarm was triggered, is it safe to look out of the window?
Apprehension rates on traditional alarm responses are very low.
Their batteries are dead within a matter of hours after load-shedding.
There are cables everywhere, which pose a risk in themselves.

Cam Era’s franchisee proudly offer:

THE VIDEOFIED alarm system with video verification and battery life up to 4 years.
System is ESKOM FREE – OFF THE GRID.
All indoor and outdoor motion viewers detect motion with a passive infrared motion sensor (PIR).
The camera sends a 10-second video clip of intrusion to MCC for immediate action – ‘Priority Response’.
Video intrusion means MCC can verify and instruct the AR Co’s as a higher priority than traditional blind detectors.
Telephonic AR alerting process can be initiated while video is being received.

NOTE: Videofied intrusion alarms are not used to identify intruders as they are not used for 24/7 video surveillance. Its job is to provide a video clip to allow the verification whether an alarm is real or not, assisting our MCC to direct the appropriate response.

For more information, click Cam Era International Franchising.

Targeted computer course can boost your CV

2018-10-17T08:00:00.000+02:00

The current economic situation in South Africa presents a huge challenge for all of us on a daily basis. Job-uncertainty and the large percentage of jobless people is making everyone a little bit fearful and uneasy about our own financial situations.

If there ever was a more fitting and especially critical time to sharpen up your computer skills to enable you to stand out in the workplace, this is the time!

Do not let any chance to immediately improve your job prospects, slip by in this last quarter of the year.

With a Creative Minds® / Cyber-Minds Training Institute, short computer course, you can get positive results quickly and build your cv to give yourself a fighting chance. Just call your nearest Creative Minds® branch for a discussion and find out how easy it is to make a huge difference in your computer skill set with the right computer course just for you. Creative Minds® offers the complete range of end-user computer course on Microsoft and Sage Pastel.

More than 45000 students have successfully completed the almost every single short computer course successfully at our friendly Creative Minds® training branches over the past few years.

Be part of this elite group.

Office Ergonomics: Be kind to your spine

2018-10-16T10:51:00.001+02:00

Whether it’s an office workstation, restaurant, factory floor or any of the multitude of other places where we earn our keep, work is a place employed South Africans spend the vast majority of their time. A significant contributing factor to workplace ergonomics hazards is posture, which is affected by the height of a person’s workstation, desk, chair and computer monitor as well as the size of the monitor screen. With people spending increasingly more time sitting at desks, in cars, and hunched over electronic devices, muscular-skeletal problems are on the rise. It’s no wonder then that the 2017 Old Mutual Disability Monitor reported that disabilities related to muscular-skeletal issues are now the third-leading cause of all disability claims.

Speaking in light of World Spine Day, celebrated on the 16th of October, Urvashi Ramjee, Head of claims: Old Mutual Group Assurance, says that the key to addressing issues around ergonomic health is prevention. “Ergonomics promotes a holistic approach in optimising wellbeing at work and overall systems performance by considering physical, cognitive, social, organisational and environmental factors. Desks and chairs don’t just have to be relatively comfortable or clean anymore; once the draft Ergonomics Regulations – which will form part of the existing Occupational Health & Safety (OHS) Act – come into effect, employers will have a responsibility to start addressing ergonomic risk factors.

“With one in four adults estimated to suffer from back pain during their lives, understanding workplace ergonomics hazards – and addressing them – is critical in terms of preventative occupational health,” concludes Ramjee.

Creating jobs is team work

2018-10-16T08:39:00.001+02:00

It takes stakeholders from across the business sector to cooperate in building businesses that can create jobs, says Cash Converters CEO Richard Mukheibir.

The franchise sector continues to grow healthily, according to the survey results recently released by the Franchise Association of South Africa (FASA). That sounds as if we should be in a good position to answer the President’s call to create jobs – but, as the saying goes, the truth is rarely simple.

The sector’s estimated turnover was R721 billion in 2017, growing its healthy contribution to GDP from 13.3 percent in 2016 to 15.7 percent in 2017. International investors have clearly been impressed by the SA franchise sector’s track record and are confident about its prospects. The number of international franchise brands in SA more than doubled from 12 percent in 2016 to 27 percent in 2017.

We saw employment rise in the franchise sector last year by 7.6 percent as 26 254 jobs were created in contrast to shrinking employment in other parts of the formal sector and in agriculture. At Cash Converters, for instance, we also responded to the Youth Employment Service, launched in June this year, by creating and training a roving stock-take team of first-time employees.

We would love to say we are expecting more of the same results this year – but that would disregard the economic and legislative environment where we try to make this happen. We congratulate multinational corporates such as Coco-Cola and SA Breweries who have committed to greater job creation and support among emerging farmers and local suppliers. In some senses, this is what the franchise industry does and wants to continue doing.

Of the 369 573 people employed in SA’s franchise sector last year, according to FASA, only 25 586 – or 6.9 percent – are employed by the franchisors to manage and operate their brands. The bulk of those employed in the sector – 343 987 people, or 93.1 percent – are employed by the individual franchisees.

In other words, they are employed by small business people balancing the risk of their own capital investment in uncertain economic times against the benefits of operating within the support structure of a franchise brand. We need more of these bold souls to take on the challenge of becoming franchisees if we are going to be able to continue expanding the sector and creating new jobs.

But the economic picture in South Africa is still complex and difficult to read and we are seeing that having an impact on franchisee start-ups. On the one hand, we have had a good operational year with trading up by double figures across the Cash Converters group. On the other hand, we have had a slow year when it comes to franchisees opening new stores.

Everything from fuel and food prices to the exchange rate is shrouded in an atmosphere of doubt and uncertainty. Would-be entrepreneurs have lost confidence. They are sitting tight in a safe position, not wanting to risk their capital at the moment by starting up a new venture or growing their established business further.

But job creation can be sustained only on the back of a growing economy. Instead, the doubt and uncertainty is being felt at many different levels across the financial ecosphere. Banks are communicating their own uncertainty at the future by slashing the risk they will take on SA’s business sector.

At Cash Converters, three out of four of our would-be franchisees normally succeed in securing the finance they need to get their new store off the ground, start employing staff and contributing to our country’s economy. This year, though, the situation has been reversed. Only one out of four would-be franchisees have seen their finance approved and been able to set up and start trading.

All the rest – who were prepared to step out of their comfort zone, to cope with rental escalations, to tackle the ever-mushrooming pile of official regulations that encircle business ventures and to take risks in a difficult economy – have been left by the wayside. And so have the people they might have employed and their families.

Each of our start-up stores employs an average of 12 people, usually expanding to about 20 over the first year or two as it begins to break even. But in too many cases, those jobs are not being created. As a result, for every would-be store that is not opened, up to 120 people are not being fed.

As we all reflect on this Jobs Summit, I invite SA business and our financial partners to consider how we can bridge this gap effectively and create the jobs that are waiting in the pipeline.

Trading and entrepreneurial instincts are key elements of the business DNA of Cash Converters Southern Africa co-founder and managing director Richard Mukheibir. He traces his family’s lineage in small business development back more than a century to his grandfather who founded Mukheibir Brothers in Barkly East in 1897. Mukheibir co-founded Cash Converters Southern Africa with Peter Forshaw in 1994 and has now been involved with franchising for nearly a quarter of a century, thriving on its energy and the people-driven environment.

So, you want to buy a franchise? Part 1 of 7 - PASSION

2018-10-16T07:59:00.002+02:00

Contributed by Surefire Franchise Developments

The first question you need to ask yourself is ‘do you have the passion’? No matter what your planning, if you don’t have a passion for it, don’t do it.

Ninety Five percent of all franchises succeed, so that’s what they have been telling us for decades. It may well be true, but it could also be a fallacy.

So, what makes a good franchise? There’re literally hundreds of businesses to choose from, Restaurants, Take-aways, Estate Agents, Business to Business, Beauty, there’s even a franchise that walks dogs, the list is endless.

There is an enormous amount of literature of what to do in reviewing a franchise, mostly written by people who have never run a franchised business or indeed been a franchisor. It’s all text book stuff but to my mind the most important ingredient they leave out is LOVE YOUR BUSINESS! Without that important ingredient there’s a very good chance you’re not going to make a great success of it. You may plod along as if you’re in employment, but you’ll never be a shining example.

What seems like ten lifetimes ago I was employed as an apprentice Tailor working in Soho, London. Ben Brown, my boss was an escapee with his seven brothers from then Nazi occupied Poland, his name was actually Bronowski but shortened it to Brown. Every January after the Christmas rush, new suits for Christmas was the thing then, we completely changed the front of the shop. New paint. Move the work benches around, new pictures of the latest fashions, mannequins dressed with updated fabrics etc. The idea was that when a client came in from the previous year the store looked new, spick and span. Sadly, a lot of operators don’t see the relevance of updating or revamping their businesses, same old stuff year in year out. The bottom line is you don’t wear the same clothes every day, so nor should your business.

One of the originators of Wimpy UK, from the old Lyons Tea Rooms (see pic) was a chap named Harry Guest, he picked his name out of the London telephone directory soon after escaping to the UK. Lyons had to change its business model thus Wimpy was born. I always suspected they chose the name from Popeye’s friend Wimpy who loved burgers. This all happened at a time when Ray Kroc of McDonald’s was establishing the brand across the United States. If you ever get a chance go see the movie.

There is no doubt that franchising has its successes but each one of them came with a cost plus an idea by an entrepreneur who put just about everything they owned, loved and cared for into the original concept. Spur originator, Allan Ambor would love to recite that he spent six months without seeing daylight when opening Golden Spur, Newlands back in 1967. Making sauces at 5 am for the days business was just one task. I know the feeling only to well after leaving the same store at dawn only to be back at 5 PM to take over the rest of the day’s shifts.

I was also tasked with opening Spur at the V&A Waterfront, I never saw daylight for three months working seven days a week.

Being the first in and last out, seeing things that others don’t see that’s what makes the difference especially in a retail store. The first greeting to the last ‘see you again’, never say goodbye! As an example, I can visit any restaurant and very quickly I can see if there is a love for that business. In the day’s way back when, we used lighting, music and most of all waitrons that could be taught to serve. The weekend business was crucial, so the trick was to get the customer in as fast as possible and then get them out as fast as possible, without losing anyone from the queue, ambience and energy was the tool. We ran a queue for hours and to hold them there we would hand out a free glass of wine. We would appoint a lively person to specially hold that line. If they lost a customer, we would send him or her chasing down the street to drag them back.

The music in the store was especially selected to be fast paced, the waitrons would stride with the beat making sure their clients were fed, served and most of all happy. As the evening progressed the lights would dim, the tempo slowed to keep people sitting. Nothing worse than an empty restaurant.

The managers job is to keep the flow going, tweaking everything and everyone to run a smooth operation with oomph, customer satisfaction is paramount.

Ever been into a store where there’s a queue. Stood there for five minutes or so, can’t recognise who are a staff, who are not, frustrated you walk out in disgust? Happens every day in stores across the country. What a difference it would make that firstly the staff are in uniform you can recognise, maybe even a name tag. ‘I’ll be with you in a moment, just finishing up here’, that plus eye contact is all it needs to bring you to a comfort level that you have been recognised. Where possible never have your back to the front shop!

That’s the difference between just doing a job to loving the job with passion.

The ins and outs of a good exit strategy

2018-10-15T10:53:00.002+02:00

Gugu Mjadu

The thought of parting with a business you’ve grown from the ground up may be unsettling, but Gugu Mjadu, spokesperson for the 2018 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS, says that it is better for both your business and yourself to plan for this as early as possible.

“The challenge that business owners often face in this respect is comparable to the difficulty that many new parents have with imagining their children grown up and leaving for university. Imagine, however, if parents did not plan ahead for the cost of their education – that would be detrimental to the future of their children. The same could be the case for your business.”

Mjadu says that a good exit strategy is about sustainability and being able to measure your business performance against the goals you have set for it. “It’s really about being able to say, ‘this is when the work is done and I can exit the business or take on a different role – this is what success looks like in terms of monetary return on investment and other business growth indicators’.

“The lack of an exit strategy could be telling of a fundamental lack of measurable business goals and this needs to be addressed,” she says.

From immediate liquidation to liquidation over time; family succession; selling to staff or external investors; the open market or another business; or the gruelling but profitable exercise of taking your company public – there are many different ways in which an entrepreneur can exit their business, but Mjadu says that whatever the process, a strong and solid strategy is essential.

She shares five key points of a good exit strategy:

1. It tells you when you are done
Mjadu says that a good exit strategy should reflect a core understanding of all the intricacies of your business and should be able to tell you when the lifecycle of your business (or of your involvement in the business) should come to an end. This is usually done by including a set of tangible measurables or objectives so that it is easy to ascertain when these have been achieved.

2. It sets out the right environment within which to exit
A good exit strategy considers the economic, social and political environment at the time of your exit. Mjadu says that this is important in order to plan for a secure financial future. “Failure to think about this could result in short-changing yourself by exiting during a tough economic climate when the risk to buyers reduces the value of your business.”

She references the case of Victoria’s Secret when founder, Roy Raymond, sold the failing business for $1m unknowing that it would later grow into the multi-billion dollar empire it is now. “While Raymond’s exit was ultimately necessary for Victoria’s Secret’s growth, he sold it in 1982 during the global recession of the early eighties – one of the world’s biggest financial crises and this influenced the selling price at his exit”.

3. It compensates those who have contributed to the life of your business
It is important to consider the impact your exit could have on investors and staff, says Mjadu. “Closing shop for example, means that your staff no longer have employment at your business. Selling could mean the same.” She adds that it is important to consider ways in which your exit could also benefit these stakeholders – for example, selling to a bigger business could mean more career opportunities for your staff, as well as continued job security.

4. It compensates you
Mjadu says that entrepreneurs often struggle to recognise their own true worth, especially when this involves attaching a monetary value to what has been achieved. “The time of exiting a business is no place to short-change yourself. You need to get out the full worth of what you put in,” she says, explaining that this means ensuring that you are financially secure before and while you go into your next venture. “Your needs for retirement and medical insurance, as well as the maintenance of your living standard, should be met at your exit.”

5. It sustains your entrepreneurial drive
Mjadu says that while you may be nearing the end of one journey, your exit should enable and encourage you to continue to be an entrepreneur – and to look forward to the next journey. “Your entrepreneurial skills and capacity do not end when you exit your business and whatever your strategy, it should egg you on to more entrepreneurial activity including becoming a mentor to aspiring entrepreneurs.”

Mjadu says that exiting your business should allow you a good retrospective look at what you have done over the years – and so planning the strategy early on in your business lifecycle will set you up in regards to what you hope to achieve. “Upon exit, you should be able to say that you have done what you set out to do, financially and socially, and you have some energy left to do more elsewhere.”

Combating plastic waste as a global community

2018-10-11T11:25:00.001+02:00

NIAGARA counter top unit for F&B industry

The amount of pollution floating in our oceans has skyrocketed over the past decade. Last year, a study conducted by the United Nations noted that if we carry on dumping waste at the rate we are right now, there will be more litter in the ocean than fish by 2050.

The world is currently going through a state of change, and while we are still doing a lot of damage to the planet many environmentally-conscious food and beverage companies are putting measures in place to ensure that they do as little harm to the Earth as possible. Banning single use plastics like straws, replacing plastic bottles with glass and enforcing strict recycling practices are just some of the ways many of these companies are going green.

H2O International has long been part of the charge by helping homes and businesses reduce their use of plastic. Managing Director of H2O International SA, Tony Marchesini says, “While there are many issues that need to be addressed with regards damage to our environment the use of plastic is one of the most important and the most prevalent.”

Whilst some plastics can take up 1000 years to decompose, thinner products such as straws and plastic shopping bags – intended for only one use – can take up to 450 years (the equivalent of ±twelve generations) to decay. In addition, many plastic items will erode and break into small fragments called microplastics (less than five millimeters in length), and scientists are only now starting to scratch the surface on the effects of these microplastics on the human body.

On land we are seeing decomposing plastics from landfills cause microplastics to seep into underground water sources and end up in our water systems, eventually flowing from the same taps that provide our drinking water. At sea, microplastics are mistaken for food and can contaminate an entire food-chain. According to a study by Plymouth University published in the Marine Pollution Bulletin one third of all UK-caught fish were found to have microplastics in their stomachs, and it is believed that eating fish that has been contaminated with these fragments can increase the risk of disease such as cancer.

Following the release of the Circular Economy package, the European Union (EU) has made plastic management its top priority, making its goal to increase the recycling of plastic packaging by 55% by 2030. But in order to really create change, people and companies around the world need to be mindful about the potential harm they are doing to the environment and take action.

Marchesini says, “It is essential that we look at our lifestyles and make what changes we can to minimise our impact on the environment. It can be the smallest of changes that have the biggest impacts, and they don't all have to cost an arm and a leg.”

For the hospitality and service industries H2O International and partner, Cosmetal recently launched a system called, NIAGARA - an efficient, economic, green alternative to plastic bottled water. The NIAGARA range offers a comprehensive series of counter top, undercounter, freestanding and fountain models that dispense large volumes of chilled still and sparkling water which can be used to fill glass jugs or bottles, making it a practical, quick, low cost and environmentally friendly alternative to serving plastic bottled water.

Whether 500ml or 5L bottles, if you drink or cook with bottled water at home because it's better tasting and thought to be cleaner than tap water you don't need to go through this continual expense and add to the plastic problem. By investing in a purification pitcher or installing a removable countertop filtration system that easily connects to your tap all you have to do is turn on your tap and fill a regular glass for a sip of great tasting filtered H2O. For homes and offices there are also luxury bottle-less water cooler options available to suit every space.

Humanity is only just starting to acknowledge and rectify the harm it has caused to the planet, and the movement away from plastic is a giant leap forward in a long journey toward undoing the plague-proportions of damage done over the last one hundred years.

For more information please visit www.h2o.co.za or call (021) 702 3262.