150 Days of Pain – The True Cost of Doing Business in SA

What new businesses need is a leap of faith. We need people who are willing to invest in something that means so much to us, and would mean as much to them when the finished product comes off the factory floor. The last 150 days of our start-up has taught us that people love to talk the talk, but when it comes to the first step of walking the walk, that leap of faith is a step too far.

The furniture market in South Africa is an interesting mix. Big local producers who account for most of the furniture made; mass importers of furniture from the emerging markets and China; and small local manufacturers. Within this mix 3 facts really stood out for us: –

1.       South Africa imports almost R7bn worth of furniture, flooding the retail market with cheaper and often poorly made goods. 

2.       The big local producers employ only about 10% of the manufacturing labour force, which means,

3.       90% of workers employed in the furniture sector are employed by small businesses.

On the back of the news within South Africa that we have reached record unemployment figures, it makes sense then that there should be a move to support small local manufacturers. This support should be coming from government in terms of inducements and bureaucratic easing, big business in the form of easier access to loans, bank accounts and investment, and from the citizens of our country as a whole. Those everyday people that make the buying decisions and who should be making more informed choices about where their goods come from, and what benefits they provide. After all, lowering unemployment has a direct benefit on our collective quality of life.

Small businesses are uniquely able to make direct and lasting impacts on the economy and the people directly and indirectly involved in the business. We create employment, we don’t just move the employed around. We can quickly upskill staff and can help build an entrepreneurial skills base in those we bring into our businesses.

Small businesses also tend to be better for the environment, in that we only procure material for order, we don’t stockpile excess natural resources, waste scarce energy resources or create waste unnecessarily.

It all makes sense then that we should give serious consideration to starting a small business and getting to work! That said, starting a new business from scratch (which is where the employment gains are really made) is hard work. The hard work is not an issue to those that are passionate about creating and building, and even the business side of things is not that daunting, thanks to years in a corporate environment, or thanks to the bountiful free resources that can be found online to assist.

The biggest hurdle we found in our first 150 days, is that we are new. Being new means that we don’t have a massive portfolio of our own products and photographs to send to potential clients which would somehow validate our skills. We need that leap of faith.

We are all too aware of the risks that consumers face when dealing with small start-up businesses (we are after all, consumers too), and fully understand that there are many people posing as legitimate businesses, using the same channels to market as the rest of us, with no intention of delivering a finished product, and this is a risk to all of us.

The beauty, however, of using a local, small manufacturing firm to create that piece of furniture you are looking for (to exactly your requirements!) is that they are just that – local. Come through and meet the guys.

We started our business not with the goal of making millions, but to make sure that we could make a difference in our lives, the lives of our team and hopefully to the greater society.

Let’s hope for the sake of all small businesses out there that the consumers value some of these things ahead of the relentless drive to deliver massive shareholder values to companies that do not adequately support a local labour force and suppliers at large.

 

Small businesses, a great way to ensure growth and a better outcome for all.