The Entrepreneurship Benchmarking Survey identified five prioritised recommendations for entrepreneurial development in South Africa
Use the "anchor firm" model
This model sees start-ups and small businesses growing as spin-offs from large, established "anchor firms" or new companies emerging to "meet a need from a large enterprise."
This model presents particular promise in South Africa, says the Monitor Group, in terms of its potential to stimulate entrepreneurship, secure access to markets for start-ups and create business value through innovation and localisation.
Improve coordination in public and private sector business support service providers
Better coordination is needed between public and private sector business support entities, said the Monitor Group. This would allow for monitoring and evaluation systems to be developed that influence further strategic planning and policy reviews. However, the question of who should spearhead this strategic initiative remains.
Decrease the burden of compliance for small businesses
Differentiation between large and small businesses should be made in legislation, the tax burden on small businesses should be decreased and regulatory processes for small businesses should be streamlined, said the report.
Increase the voice of entrepreneurs
Small businesses need to have more say in organised business forums. This could be achieved by capacitating the National Small Business Advisory Council, said the Monitor Group.
Develop a standardised information resource
An integrated online portal should be created to deliver resources and information for businesses at every stage of the entrepreneurial cycle, the report said. In addition, abridged, printed booklets should be distributed.
Why entrepreneurs fail
Allon Raiz, head of business incubator Raizcorp, has seen hundreds of start-ups take off or fail. He has seen even more not even meet the criteria for entering his incubator programme. Their biggest failing, he says, is not knowing what their economic right to exist is.
"Most people start a business based on economic necessity. There's a 'me too' factor. That is, they see a type of business succeeding and assume it will work for them too," Raiz said.
The fact that too many businesses may already be offering the same service does not occur to them. The business differentiator cannot be based on platitudes, like "better service" or "lower prices" he said.
"If you have no compelling right to exist, you'll fail," Raiz said.