SABEF Kasi-to-Kasi Workshop Research

Transcription

1 REPORT SABEF Kasi-to-Kasi Workshop Research November 2013 Clever made simple.

2 AGENDA BACKGROUND AND OBJECTIVES METHODOLOGY WHO DID WE SPEAK TO? DEMOGRAPHICS FINDINGS CONCLUSIONS AND KEY TAKE-OUTS 2

3 Background and objectives

4 Background and objectives Background In March 2013 SABEF kicked off the Kasi-to- Kasi SME development tour in Soweto, Gauteng - an initiative aimed at developing potential and current entrepreneurs and small business owners to seek business opportunities in their communities. The programme brought together academic, technical and strategic business resources to inspire and motivate township entrepreneurs. The primary objective To better understand the needs and challenges these entrepreneurs face when it comes to starting and running a small business. Such insights are key in supporting entrepreneurs and facilitating tailored offerings that could aid them in getting their start-ups going from the ground up. Secondary objectives included: Determining general aspects of starting and running a small business Identifying entrepreneurs' needs and attitudes towards companies, especially financial institutions 4

5 Methodology

6 Methodology Sample Potential and current entrepreneurs and small business owners who attended one of the SABEF Kasi-to-Kasi SME Development Tour 2013 workshops Data collection and process At each workshop, one or more SABEF workshop representatives handed out paper-based questionnaires Questionnaires were captured and combined by Columinate Data collection took place between March and November 2013 Overall Sample Outcomes 130 6

7 Who did we speak to? General demographics

8 Who did we speak to? Workshop location Workshop location Count % KwaThema 30 23% Durban, Umlazi 23 18% Khayelitsha 23 18% East Rand 20 15% Alexandra 14 11% Soweto 12 9% Johannesburg (not further specified) 8 6% Total % 8

9 Who did we speak to? General Age Count % 18 to 24 years 34 26% 25 to 34 years 51 39% 35 to 44 years 30 23% 45 to 54 years 7 5% 55+ years 7 5% Not specified 1 1% Total % Gender Male 86 66% Female 43 33% Not specified 1 1% Total % Business ownership Yes 76 58% No 51 39% Not specified* 3 2% Total % *Those who did not indicate whether they own a business or not were excluded from the main findings of this report 9

10 A note on base sizes Base sizes may vary Missing responses have been excluded from the following findings 10

11 Findings

12 Business ownership The administrative facts

13 Where? Business premises At a friend s house, 7% More than half of those who own a business run their company from home. Furthermore, most are renting their business property. Business premises, 37% At home, 56% Renting 76% Bought 24% Only asked to business owners 14 n = 43

14 What? Industry of business The entrepreneurs tend to focus on industries that are either easily conducted from their or someone else s home (e.g. food, beverage, clothing and textile), or do not rely on a set location (e.g. agriculture and forestry, construction). 14% 13% 11% 9% 9% 6% 4% 4% 3% 3% Only asked to business owners 15 n = 70

15 The paperwork One fourth or more of business owners are either not registered, or do not have a tax certificate and/or a BBBEEE certificate. This could point to some of the barriers experienced in obtaining documentation that is important for business ownership. Is the company registered? Does the company have a tax certificate? Does the company have a BBBEE certificate? 76% YES 66% YES 24% YES 24% NO 34% NO 76% NO Only asked to business owners n = 76 n = 76 n = 74 16

16 The numbers How many are employed by the company? Very few (one tenth) businesses employ more than 20 people. 90% 10% 1 19 people people Only asked to business owners 17 n = 61

17 How long have business owners been in business? 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 42% Less than 1 year 32% Series 1 74% have been in business Series 1 for less than 3 years. 10% 7% 4% 6% 1 3 years 3 5 years 5 7 years 7 10 years More than 10 years Only asked to business owners 18 n = 76

18 Security Do they have business insurance? 88% NO Most business owners are at high risk as they claim to not be protected should something unwanted happen to their business. 12% YES Only asked to business owners 19 n = 59

19 Business ownership Infrastructure

20 Tech specs Devices owned One in four do not have a laptop or computer for their current or future business. 43% 17% 10% 3% 26% A laptop Both a laptop and a computer A computer A tablet computer Neither a laptop nor a computer Which of the following do you have for your current business or in your personal capacity to potentially start your business? 21 Asked to business owners and those who would like to start their own business n = 87

21 Being connected Telecommunication Which of the following do you use for your business? Of which is a smartphone: 65% 80% Cellphone 2% Landline Network provider 53% 34% 19% Both Most have a cellphone that can be used for business purposes 9% I don t know 4% Only asked to business owners *Small sample size n = 59 22

22 Being connected The web Do they have? Yes No Internet 57% 43% n = 98 However, marketing and client relations management may be a challenge for most as less than half have a business address, website and/or social media page. Furthermore, 34% of those who have a personal address do not have internet connectivity. Personal address 85% 15% n = 98 Business address 55% 45% n = 62 Business website 16% 84% n = 62 Business social media page 39% 61% n = 61 Facebook 91% Twitter 13% LinkedIn 3% Google+ 9% Asked to business owners and those who would like to start their own business 23

23 HR and financial management Do they utilise any business computer software for tasks such as bookkeeping, payroll and HR? 92% NO Business management may also prove challenging due to the claimed lack of software programs and tools that can be used for HR and financial management. 8% YES Pastel (n = 3** out of the 5 respondents) Only asked to business owners **Extremely small sample size n = 59 24

24 Business ownership Money matters and suppliers

25 Do they trust banks? Do you trust banks? n = 20** Yes No Why do they not trust banks? % 20% Banks are not transparent 42% Interest rates are too high 33% n = 99 80% Banks often make mistakes 8% Banks are corrupt 8% The risk is too high 8% Banks neglect to inform you of important details that you only find out about when it is too late. (Non-business owner) Business-related experience with banks appears to increase trust given that business owners and those who have, or need, a loan are more likely to trust banks. They demand due diligence, high legal fees and eventually you fail your loan application. (Business owner) I believe they're after your money. Not from experience but I always hear of hidden charges. Maybe I'll see in the future. (Non-business owner) Asked to business owners and those who would like to start their own business **Extremely small sample size 26

26 Who would they trust for financial business advice? 64% For most, banks are the primary trusted source of financial business advice. This points to the important role that banks play in these entrepreneurs business ventures. 21% 14% 14% 8% 2% 2% A bank A government institution A private investor An investment company Family A friend An independent loan business 27

27 Which banks do they think support small businesses? ABSA has large share of mind amongst most entrepreneurs as a supporter of small businesses. Absa Nedbank 31% 76% It is also the bank that most (52%) claim to be likely to approach should they need a business loan in future. Standard Bank 30% First National Bank 27% *Note that ABSA was a sponsor of the workshops. Their visibility at the events could potentially have served as a primary reason for the high proportion of mentions for ABSA. African Bank Capitec None of the above 6% 5% 3% Asked to business owners and those who would like to start their own business 28 n = 88

28 Business loans How big is the need? Did they in the past or do they currently need a business loan to start their own business? 34% Yes n = 104 No 66% Why do they, or did they, need a loan? Top 8 reasons n = 69 Start-up capital 47% Equipment 32% Expanding my business 19% Stock purchases 3% Property rental 3% Sustaining my business 3% Marketing 2% Paying salaries 2% % Do they, or did they, know how much money they would need to start/run their own business? Accessibility to loans and funding is key - lack of funding serves as a barrier to starting and running a business for 83% of the entrepreneurs. Furthermore, guidance and advice should form part of the loan package, as almost half are unsure of how much they would need to start and run their business. 55% YES n = 98 45% NO Asked to business owners and those who would like to start their own business 29

29 Business loans Who gives them? Who gave them a business loan? If they need a business loan, who would they approach? No one 38% ABSA 52% Investment company First National Bank Nedbank Absa 10% 10% 10% 10% Whilst there is a great need for funding, more than one third claim that their loan application was rejected. Government institution (e.g. NYDA, NEF, GEP) Investment company (nongovernment) First National Bank Nedbank 16% 14% 12% 23% A government institution A private investor Family Capitec 5% 5% 5% 5% Standard Bank Family Capitec A private investor 10% 7% 5% 4% When it comes to funding, many rely on banks, government (e.g. NYDA, NEF, GEP) and nongovernmental institutions. Other (not specified) 5% n = 21** n = 73 A friend 1% Asked Columinate to business 2013 owners who have applied for a business loan **Extremely small sample size Asked to business owners and those n = 73 who would like to start their own business 30

30 Business ownership Further needs, gaps and aspirations

31 Non-business owners Do they want to start their own business? Most non-business owners want to start their own business. However, various barriers to doing so were identified, of which lack of funding, networks and skills are key concerns. 5% 95% Yes No Only asked to non-business owners *Small sample size 32 n = 40*

32 Gaps and barriers Business and laws Other than funding, what is keeping you (personally) from starting/running your business successfully? Which South African laws or policies, if any, make it difficult to start and/or run a business successfully? Lack of business networks 39% Subsidy laws BEE 22% 17% Lack of skills and training 38% None 17% Lack of market opportunities Lack of information and knowledge 35% 32% Tax Environmental laws Tender-related laws 13% 9% 4% Lack of infrastructure 22% Labour laws Loan related laws 4% 4% Sales 13% Accreditation 4% Fear of failure 5% Construction Industry Dev. Board (CIDB) 4% Licensing laws 4% HR 4% Changing of laws 4% n = 111 Asked to business owners and those who would like to start their own business 33

33 Gaps and barriers Community related Whilst 76% claim that they do not experience any community-related difficulties to starting or running a business, one fourth feel the opposite. Crime and workspace appear to be the main barriers for the latter group of entrepreneurs. 25% 21% 13% 8% 4% 4% Crime Workspace Work ethic Finding workers Lack of support Finding customers Which difficulties to starting/running your business successfully are caused by your community? n = 101 Asked to business owners and those who would like to start their own business 34

34 Opportunities and support Are there enough business opportunities for them in South Africa? Is there enough social support to start/run a business? 91% YES 71% YES 9% NO 29% NO n = 116 n = 116 Asked to business owners and those who would like to start their own business 35

35 Opportunities and support Do they know of business incubators to support their current or future business? Which business incubators do they know of? Top 10 Yes No NYDA 13% Half of the entrepreneurs are not aware of business incubators that could help them to set up, run and grow their business. This points to an opportunity for greater marketing of and education about such companies. 52% 48% SEDA 13% DTI 11% SABEF 9% Shanduka 9% Business Partners LTD 9% Awethu Project 7% Government 7% ABSA 7% GEP 7% n = 106 n = 51 Asked to business owners and those who would like to start their own business 36

36 Skills development Do they feel they have the necessary skills to start and/or run their own business? Which skills would they like to receive advice and training on? Financial 73% 67% YES A great need for skills development exists, as one third claim to lack the necessary skills to start and/or run their own business. Marketing Bookkeeping Sales 64% 43% 34% 33% NO Tax 24% HR 19% n = 119 Asked to business owners and those who would like to start their own business 37

37 Kasi-to-Kasi Workshop experience

38 Satisfaction with the workshop The SABEF representative was perceived to be the most valuable element, as indicated by the high satisfaction rating. The event was also useful for most, both personally and for their current or potential future business ventures. Whilst still achieving high satisfaction levels, the workshop venues and networking opportunities received the lowest satisfaction ratings overall. Dissatisfied (bottom 2 box on a 5-point scale) Moderately satisfied Very satisfied (top 2 box on a 5-point scale) 72% 90% 85% 85% 84% 82% 73% 71% 17% 11% Overall workshop n = 89 8% 9% 11% 11% 13% 2% 5% 4% 5% 5% SABEF representative The usefulness of the event to your business The relevance of the information provided The usefulness of the event to you personally The workshop facilitator 18% 9% The venue 13% 16% Networking opportunities Asked to all Missing responses excluded 39

39 Their perceptions of the workshop they attended Likes Suggestions for improvement I gained valuable information 33% The speaker was good 8% It was motivational 8% There were good networking opportunities 7% It was professional 3% It was detailed 3% Explanations were detailed 1% It was to the point 1% It opens people s eyes to be better in life and to start something and do things for themselves. (Business owner) The facilitation process from payment to mentoring. (Non-business owner) Having organisations like SARS and SABEF making this easier. (Non-business owner) Asked to all Missing responses excluded % n = 89 More workshops 8% More advertising 7% Nothing 7% Workshops should be held during the week 3% Different speakers 3% Improve on the venue (perceived as noisy and/or too far from home) 2% Include more youth 2% More networking opportunities 2% Be more accessible 2% To do workshops twice a month with different motivational speakers. (Business owner) Many people don't know about the workshop. SABEF should promote themselves to let people know that there are such workshops. (Business owner) Bring investors so we can pitch our business models and learn more from their comments. (Non-business owner) % 40

40 SABEF Perceptions and attitudes

41 SABEF membership Are they SABEF members? 83% NO but all would like to be 17% YES n = 96 Asked to all Missing responses excluded 42

42 What is their understanding of what SABEF does? 1 in 5 do not have a good understanding of what SABEF does. What SABEF is to them: I understand it extremely well 47% Imparting knowledge to black entrepreneurs 25% Empowering black entrepreneurs 25% I understand it moderately well 32% Giving support 17% Creating a networking platform 8% I do not understand well 22% Providing funds 4% n = 92 Asked to all Missing responses excluded 43

43 What assistance do they need from SABEF? 68% 64% 58% 57% 52% Most entrepreneurs expect to receive skills development training and information from SABEF. Being informed about funding suppliers is also important, as this is a key need that currently serves as a primary barrier to starting and running a business. n = 90 Asked to all Missing responses excluded 44

44 Conclusions and key take-outs

45 Conclusions and key take-outs A clear need state The majority of the target entrepreneurs: Lack funding to start and grow their business most cannot afford to buy property (56% work from home), 92% of business owners do not have business insurance, and 66% claim to need a business loan. Funding is claimed to be a barrier by 83%. Therefore, SABEF and relevant stakeholders should aim to: Attract potential new funding partners to invest in and/or provide funding to these entrepreneurs. Educate and increase awareness of funders that these entrepreneurs could approach, and what they could do to increase their chances of successfully getting funding. Are uneducated when it comes to starting and running a business - especially with regard to financial management and business growth practices. 52% are unaware of business incubators that could help them to set up, run and grow their business. Educate consumers by continuing to offer workshops, with a focus on financial, marketing and business management education. Guide them on how to overcome the identified legal, financial and community-related barriers experienced by many of the entrepreneurs. 46

46 Conclusions and key take-outs A clear need state The majority of the target entrepreneurs: Therefore, SABEF and relevant stakeholders should aim to: Lack the necessary infrastructure and tools to start and grow their business most cannot afford to buy property (56% work from home); one in four do not have a laptop or computer; more than half do not have a business address, website or social media page; and 92% do not have software for bookkeeping, payroll and HR. Attract potential new stakeholders to provide access to the necessary premises, technology and software tools. Educate entrepreneurs on where and how to get easier access to and use these resources, especially the technology and software for successfully running a business. Strongly rely on banks, as well as governmental and non-governmental agencies, not only for funding but also business-related guidance, education, advice and support. Increase awareness of the suppliers who could offer guidance and support for start-up businesses. Provide tailored financial and support offerings that take this unique target market s needs and the barriers experienced into account. 47

47 Conclusions and key take-outs The workshops Overall, attendees received the event positively and show high satisfaction levels. The SABEF representative was a key pulling factor and played a strong contributing role in the overall experience of the event. The perceived usefulness of the event to themselves and their business was another strong driver of overall satisfaction with the event. Recommendations for future workshops would be to: Advertise the event more on a variety of media platforms; Offer greater opportunities to network with relevant stakeholders and fellow business entrepreneurs; Get more and a greater variety of motivational speakers who could offer advice and share information based on personal experience in starting and running a business. 48

48 Conclusions and key take-outs SABEF 1 in 5 do not have a good understanding of what SABEF does and why entrepreneurs would benefit from becoming a member. The workshops did not succeed in bringing this message across for some attendees. More information should be made available about SABEF to clearly highlight the benefits of being a SABEF member. Given that all non-members claim that they would like to become a SABEF member, SABEF should encourage those who attended to sign up and join while the workshops are still top of mind. 49

49 Thank You. Clever made simple.