By Henra Mayer, Innocentrix CEO.
While the small-and-medium enterprise (SME) business sector is the fastest growing in South Africa, according SMEToolkit™, 75 % of small businesses fail within the first two years. Bizconnect (2013) states that 96% of these small businesses will fail within 10 years. In order for the economy to grow, South Africa not only needs more entrepreneurs – it needs better entrepreneurs.
These are quite scary statistics. So what distinguishes a successful entrepreneur from an unsuccessful one and are there any concrete traits or habits that can be attributed to entrepreneurial success?
In a recent article published by Forbes, Allan Hall lists five characteristics as shared by Larry Levy from the Institute for Entrepreneurial Practice at the Kellogg School of Management. They are as follows:
• Learn from your mistakes, and then never make them again.
• Be prepared emotionally for entrepreneurship’s ups and downs.
• Be willing to live with fear, risk and occasional failure.
• Understand, nurture and refine your vision of the enterprise.
• Line your business up with your passions.
The points listed above constitute good advice. I do not think that any entrepreneur at start-up stage expects the experience to be smooth sailing but a 25% survival rate might not be a figure considered by many. Every country has its own business milieu to consider and South Africa will be no different. The legislative and regulatory environments as well as local culture and demographic distribution is but some of the aspects that will define the entrepreneurial offering and that needs to be considered by the budding entrepreneur. All of this made me consider the South African entrepreneurial experience. Therefore, below find my own list of essential entrepreneurial traits, not based on academic research but compiled from my own, honest experience – as seen through the eyes of a South African entrepreneur to whom the opening statistics readily apply.
- Entrepreneurship requires hard work, dedication and focus. Office hours based on the 8am-5pm principle will become a luxury.
- Any venture without a clear business plan is an open invitation to disaster. Know what you are getting into, do the research, study the figures and then expect the reality to look a lot different, nonetheless.
- Know how to pitch and present your product or service. Here I refer to potential customers and investors alike. You might even have to prepare an elevator-pitch applicable to a variety of audiences e.g. investors, customers, researchers, executive boards and communities. Again, a focused offering is essential. You cannot be everything to everybody.
- Do not underestimate the value of intangible assets. Identify and protect your Intellectual Property where and when appropriate.
- Know your customer and your environment. Involve key stakeholders in collaboration opportunities where suitable.
- Garner support from key role players and strong individuals, find mentors, form strategic alliances (think global where appropriate) and consider the importance of a natural fit between your offering and that of your alliances.
- Create teams. Capitalise on your own strengths but get expert involvement where your own talents fall short. Contracts are important. Ensure that you give this the attention it deserves. The correct leadership team will be of the utmost importance to the survival of your business.
- Be passionate and sincere. People need to believe as much in you as in your product or service. Reputation is everything. Be ethical, be trustworthy.
- Network far and wide. It is impossible to know everything. Surround yourself with reputable knowledgeable people and associations. There is incredible power in collaboration.
- Use the power of the internet, social media and e-commerce. The world is a global village and these type of media tools offer immense value in terms of networking, reputation building and branding, to name but a few
- Learn daily. Your customers need to rely on you for expert advice. Ensure that you can provide it.
- Give back. Whether you transfer skills, teach children or less fortunate communities new skills or donate to charity. I still believe it is an important rule of the universe.
- Innovate! The world is changing constantly. Nowadays innovation is expected for survival and if you are not making innovation part of your DNA you will be out—innovated by someone else in your industry. Identify the opportunities on your path and act on it.
- Persevere. There will be plenty of nay-sayers. The experts that know best, the family member that means well. You will have regular opportunities to give up. If you believe in what you do keep at it. There is a very fine line between success and failure. I am not advocating a relentless effort into something that is futile but fortune normally comes to those who are prepared. Believe in yourself.
I am sure you can think of a couple of more points to add to the list. I found that I added to it every time I read through the numbered items! One thing is for sure, South Africa need entrepreneurs with skills and backbone and entrepreneurs need a supportive business landscape.
Remember, if entrepreneurship was easy, the statistics reflected at the beginning of this piece would not have been so disturbing. Entrepreneurs are a special kind of breed, it is an activity definitely not recommended for the faint hearted!
PS – why don’t you join our community of innovators and entrepreneurs? One of the habits is to “network far and wide” (see point 9 above)… Click here to join now!