Learning from South African Entrepreneurs

One of the most exciting assignments that I get MBA students to do in the MBA course on entrepreneurship is a “Case Study of a South African Entrepreneur”. Each student is required to interview a South African entrepreneur and write a 6 – 8 page case study highlighting the person’s journey of starting and running a new business in South Africa. The entrepreneur should be person who has launched a new venture in the past 12 years and has achieved annual revenues of at least R3m.

The last part of the assignment requires students to identify their key learning’s from this exercise. Here are some of the things that have been identified as key learnings.

Passion Counts
The most common learning across the group was that passion is an essential ingredient to entrepreneurial success. Passion is the fuel that drive the new venture creation process so do something that you are passionate about and get excited and energized by your business or you are doomed to failure.

Making the Leap – Individual to the Business
There is a distinct difference between being a “self employed individual” and an “entrepreneur”. An entrepreneur builds a business that is able to exist independently of the person building the business i.e. the business has value even if the entrepreneur is not there. A self employed individual is the business and if they leave there is no value. The real challenge is making the leap from being a self employed individual to being a entrepreneur that has a business independent of oneself

Perseverance and Hard Work are Part of the Deal
The journey is almost never easy. Entrepreneurial success is dependant on lots and lots of hard work and the ability to persevere in the face of adversity. Don’t bother embarking on this journey if you not willing to endure through some tough times and challenging moments.

Managing Growth = Staying Cash Flush
Growth is what so many entrepreneurs hunt. They go after more and more sales to increase revenue from one month to the next. Growth is good if the company can afford it i.e. they have the cash flow to fund the growth but not all growth is beneficial for the business. Growth costs money and therefore the successful entrepreneur needs to ensure that they grow at a rate that they can afford to grow. If you are growing ensure that you have the cash to pay for new inventory and to pay staff at the end of the month. Few businesses are liquidated for slow growth and no profits; most businesses are liquidated because they run out of cash.

The Power of a Network
To make it in starting your own business you need to rely on a broad range of connections. A strong network can pay huge dividends in opening doors for new sales, providing links to suppliers, enabling one to hire good people and to connecting with financiers. A good entrepreneur fosters their network all the time, even when it appears not to matter they are building relationships that will help them in the long run.

Be Motivated by the Bigger Picture
Successful entrepreneurs are motivated by what could be, by what they imagine their business will become. Even if the business is small now, they have a plan for how it will be bigger, more successful and more influential. This is the vision that drives them to keep moving forward and making things happen

Understand what You Want
Different people want different things from a business. Some want the business to provide a sustainable income for them and their family and enable them to lead a particular lifestyle while others dream of being a revolutionary, of changing an industry and building an enterprise with global reach. Understanding what it is that one wants facilitates decision making and strategic planning to achieve the kind of growth and outcome that you want.