/ 16 June 2008

‘Raizing’ young business profiles

Local entrepreneur gives back to young businesses, writes Lynley Donnelly.

Allon Raiz has a long list of accolades behind his name. He has been invited to be a panellist and speaker at numerous international events around entrepreneurship, written and hosted a prime-time television show guiding nine small businesses in pursuit of R1-million and he is directly involved with more than 50 companies.

But the award that has meant the most to this South African businessman, is being named a Young Global Leader by the World Economic Forum. The serial entrepreneur was recognised along with 200 fellow young leaders from across the globe, for their professional accomplishments and capacity to contribute to society at large.

Raiz says that one of the reasons why this award is so important is because it will help him expand his unique entrepreneurial ‘prosperator”.

The prosperator, or Raizcorp, as the company is known, is a unique business incubator that assists burgeoning entrepreneurs grow their businesses into profitable entities. It is currently assisting some 200 young businesses grow across the country.

‘We are the only non-funded, privately owned business incubator on the African continent,” says Raiz proudly of his small empire. He says they have veered away from using the word incubator, instead focusing on the notion of prosperity — hence the word ‘prosperator”.

Raizcorp’s partner division has everyone talking. After a rigorous selection process Raizcorp provides new entrepreneurs all the support they need to grow their start-up business.

This includes basic infrastructure — from phones and faxes to a boardroom — as well as training in basic business principles like accounting and administration.

Raizcorp also provides the young business with personnel, should they need it, including experienced bookkeepers and accountants who can assist with the nitty gritty of tax returns, budgets and cash flow analysis. Raizcorp also assigns a mentor to the managing director of each fledgling company.

Raizcorp does take a minority equity stake in the business in return, but Raiz says this is because Raizcorp is wholly committed to the idea of partnership.

‘Most business incubators have some kind of exit strategy in place,” explains Raiz.

‘We give the best service because your success is our success. That is part of the reason it’s been such a success. It’s for profit, it’s highly effective and highly intensive.”

This does not mean that Raizcorp in any way controls the business. It does not have access to bank accounts and all managerial decisions remain within the individual company’s hands. Its chief aim is to provide proper support to a start-up company.

Companies can also join Raizcorp as a virtual member. This means they still have access to all the resources that Raizcorp provides, but without having to locate to Raizcorp’s offices in Marshalltown or Kramerville in Johannesburg.

However, should they need to, they can hot desk at Raizcorp’s offices, and book board and meeting rooms. ‘Its a train station here,” says Raiz.

Once a company is on its feet, they can go it alone. But many choose not to as the relationships and networks built up through Raizcorp remain beneficial into the future.

‘Its a commercial relationship and ongoing,” explains Raiz.

He is outspoken about the issues that face entrepreneurs in this country and he believes that not everyone is cut out to be an entrepreneur.

When it comes to growing South Africa’s economy and preparing for the future, Raiz says entrepreneurship is key, in fact, ‘we don’t have an option” he argues.

‘But we need to distinguish between self-employed people and growth entrepreneurs,” he says.

‘Self-employed people make a minimal contribution to the economy and traditionally they don’t re-employ.”

The development of the growth entrepreneur is what should be focused on, he argues.

‘These are the people who employ from 20 to 10 000 people,” he says. ‘They have a multiplier effect and are now employing others, who are employing domestic workers, educating their children and so on.”

‘Government makes all the right noises, but all the anecdotal evidence is that the delivery is not there,” argues Raiz.

‘What we could do with more of is more PPPs (public private partnerships) and government is working on this,” he says.

‘A better tax regime [is needed] for small businesses and more functional incentives for small businesses. ‘The money is available from government but it takes months to access that money and people are insolvent by the time it comes through,” he says.

He says, however, that it is not just financial support that new entrepreneurs need. They need greater mentoring and better training than bodies like the Setas offer.

‘The training is there but it is ineffective and people might as well not do it.”

Raiz hopes that with the WEF award he will be able to grow the Raizcorp model throughout the developing world.

‘For the concept to be effective we need to scale the business and need to meet the players that can help us,” he says.

He aims to role the business out to 34 countries cross Africa and South America and hopes that the WEF award will facilitate entry into these countries with the right local partners who have the right intentions.

 

AP