World Cup no easy bonanza

Everyone knows that the 2010 Soccer World Cup is going to mean big business for all companies large and small. However, the opportunities for taking advantage of the influx of visitors may be limited by the rules regarding the use of Fifa trademarks and the ability to recoup any investment during the period immediately around the tournament.

A survey of small to medium-sized enterprises (SMEs) conducted by World Wide Worx earlier this year found that only 43% of SMEs were positive about the impact the tournament would have on their businesses.

When the sample was narrowed to businesses that had received support from the National Youth Development Agency (NYDA) the percentage that felt that the tournament would have a positive impact rose to 73%.

“Even though not as many young people will benefit from 2010 opportunities as we had hoped, an opportunity exists for young people to use their creativity and offer tourists an African experience. Young entrepreneurs can attract tourists to their communities and offer services such as accommodation, food and beverages and even sell cultural artefacts,” said youth agency chairperson Andile Lungisa.

The managing director of World Wide Worx, Arthur Goldstuck, said although people feel that the tournament will have a positive effect on the country as a whole, the feeling does not extend to their own ­businesses. In terms of SME turn­over relative to positive expectations of the World Cup, only one sector stands out; among those micro-enterprises with a turnover of less than R150000 a year 93% are positive about the World Cup as compared with the ­average of 86%.

“Two factors are suggested here; one is that owners of these small enterprises have seen a gap which they will take advantage of; the other is that they have hopes which may be unrealistic,” Goldstuck said.

He pointed out that, on the whole, SMEs should not expect the World Cup to deliver boom times to their companies, especially if their plans require the use of World Cup trademarks or rely on proximity to the stadiums.

He said Fifa has closed down many of the loopholes that would have allowed SMEs to take advantage of the World Cup.

“One example of this is that for those companies that fall into the exclusion zone — there are particularly draconian rules regarding branding and most consumer- focused companies will need to be careful about what branding they have on public display,” he said.

“Spectators will not be allowed to take food into the stadiums, so this needs to be kept in mind,” he said.

“This is especially true in the accommodation sector where it was necessary to get MATCH accreditation to offer accommodation through official channels,” he said. “The problem with signing on with MATCH is that the process is not easy and you are not guaranteed that it will result in business.”

For those SMEs that are not in the accommodation game, there are opportunities to take advantage of in additional passing trade, he said, but warned that they should not take this boom for granted.

“SMEs will have to be creative to attract the passing trade. This may include instituting special promotions or advertising specifically in areas where the visiting fans will be.”

There will be greater numbers of fans in the big cities, such as Johannesburg, Cape Town and Durban, for a longer period as the cities have more games than smaller centres such as Nelspruit and Polokwane.

The opportunities for companies in the smaller centres are therefore going to be more limited.

Goldstuck warned that it would appear that no company, no matter how small, will fall outside Fifa’s scope in its attempt to protect its intellectual property.

Knowing what is and isn’t allowed is vital for companies looking to give their business a soccer flavour for the tournament.

Tips for small businesses

Understand the limitations. Just because the whole world is watching South Africa, it doesn’t mean that you can do whatever you like. There are limitations to what you can do and where you can do it. If your business operates close to the stadiums make sure you understand exactly how Fifa’s rules apply to your business. The last thing you want is for the powers that be to come and clamp down on you. Remember, Fifa rules are legally enforceable.

Know who is going to go where and when. There will be a lot of people moving around the country over the course of the tournament and many of those people will have only a rudimentary know-ledge of English. If you are expecting an influx of Spanish fans to your city then make sure that you have someone on your team who can communicate with them.

You have six months to get a working knowledge of a few key languages. Learning Korean might be a little tough, but if you are selling something that would appeal to that market, then it might be worth the investment.

Don’t over invest. If you are spending a lot of money to launch services just for the tournament then you need to make sure that you will get that money back during the tournament. If it is going to be a long-term investment in new infrastructure, ensure that you are spending money on infrastructure that will be sustainable after the tournament ends.

Look after your customers. Don’t forget who your real customers are. If you neglect your existing customer base to focus entirely on the fans, you run the risk of alienating them. The fans will be here for six weeks, but the South Africans will be spending money with you for years. Locals are going to feel as though their lives have been disrupted enough without being slighted by their regular establishments. Also ramping up prices to take advantage of the tourists will only annoy existing customers, who will notice the price increases.