Statistics reveal SA entrepreneurs need business guidance

According to the latest Global Entrepreneurship and Development Institute report, South Africa has high growth rates and exceptionally high rates of product and process innovation, when compared to the global average of entrepreneurship data. Business could be booming in South Africa – if it wasn’t for the serious shortage in skills and start-up know-how. Can business support and mentorship address this setback?


A report released this year by the The Global Entrepreneurship and Development Institute (GEDI) ranks South Africa 52nd out of 132 countries worldwide and first in sub-Saharan Africa in terms of entrepreneurship and its development.

This despite South Africa’s “alarmingly low level of entrepreneurial activity in spite of high unemployment” according to a report released earlier this year by another institution, the Global Entrepreneurship Monitor (GEM).

According to the GEDI, South Africa’s entrepreneurial environment – when compared to global standards – excels in terms of its product and process innovation, competition, growth rate, opportunity start-ups, opportunity perception, risk acceptance among entrepreneurs and internationalisation.

The report also highlights South Africa’s most dooming setback: a substantial lack of risk capital and start-up skills in South Africa.

However the latter isn’t irresolvable. Business training and guidance could compensate for the skill deficit.

Businessman Mongezi Khambule is a shining example. After Khambule was shot, as a victim of a gang robbery in 1999, he was paralysed in both legs, and consequently struggled to find a place to stay. Later he was able to pursue business studies.

“After all that happened I told myself that all my focus must be on building my future to live a better life as a physically challenged person. So I started some courses at Siyaya Skills Institute at Claremont – I did Business Studies, Computers Studies and Office Administration.”

Last month Khambule kicked off his own satellite branch for Company Partners, a business that provides startups with business guidance and administrative assistance.

Mongezi New agent of month
Mongezi Khambule with Company Partner Agent Director Norman Swanepoel

Co-founder of Company Partners Liam Stander believes many South Africans have the necessary entrepreneurial spirit, but they don’t have necessary access to continual support to their business running.

“The Europeans and Americans see the gaps and then they’re confident enough to do what needs to be done, but many of our guys struggle – because of a lack of education,” he says.

“Even if it’s micro-entrepreneurship in a township, an entrepreneur can’t do much, because there’s no one to guide or help. And if they hear about someone around the corner who can help out – they often get taken advantage of,” he says.

“There are so many people that are misguided or don’t have access to the right information.”

According to GEM one of the biggest problems facing SA entrepreneurs is keeping their businesses open.

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“The level of business discontinuance still exceeds that of business start-ups, resulting in a net loss of small business activity and subsequent job losses,” the report says.

The GEM report also finds very few government initiatives “contributing towards improving entrepreneurship”. Private companies like Anglo American’s Zimele programme and South African Breweries’ KickStart initiative are named as two of the most helpful initiatives.

“It’s all about follow-through. Many government organisations come and offer workshops, but after that they’re gone and then there’s no support,” explains Stander.

“In South Africa the soil is fertile and the opportunities are good, but many people get a roadblock and then, because there’s no one to help or guide them – before you know it, they just stop trying,” says Stander.

Despite discouraging statistics on South Africa’s low rate of successful entrepreneurs, the future might can be promising – if business training and guidance proves to be the simple answer to a significant, yet distinguishable, setback to the majority of SA entrepreneurs.

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