In the past management education and the business school were seen as playing an important role in the up-and-coming executive’s preparation for success in business.
But this is no longer viewed as sufficient. The new thinking is that the future of the South African economy lies in the small business sector and management educators should teach students not only how to think about business, but also how to manage it practically.
As more and more MBA graduates start their own businesses, it is imperative that business schools help emphasise the importance of the entrepreneurial spirit as part of the drive towards corporate entrepreneurship in South Africa.
Entrepreneurs need to know how to initiate a business venture as well as how to marshal the right resources. Small business owners should also invest time in learning how to manage risk as well as capital development.
Lack of knowledge of generic business skills such as marketing, cash-flow analysis, human resource practices and industrial relations will negatively affect the chances of commercial success. In the run-up to starting your own business, three key issues need to be kept in mind.
Firstly, it is imperative that you formulate a business plan. Secondly, entrepreneurs must properly assess a business oppor-tunity before planning to take the plunge. Thirdly, research the market. Make sure you know who your competitors are and how big the market for your product or service is, and spend time on training.
In South Africa, where the market is very competitive, prospective entrepreneurs have to differentiate themselves if they are to get ahead.
Even if you make the two-year mark that many see as the watershed, your business might not be growing at the rate you would like it to. The main reason for this is that a business vehicle needs a driver. As an entrepreneur, you are it.
If you are too busy doing everything, you aren’t spending enough time thinking where it is you need to take your business. Only when you do that can you begin to grow it.
Is there a marketing plan? Although this is one of the most important aspects of any business, small business owners often fail to think about how to find the most cost-effective way to market their product. An integral part of keeping ahead of the competition is to know where customers buy, when they buy, what they want to buy now and what they would buy in the future. Mind your financial affairs, including the acquisition of the necessary resources.
Remember that even the smallest entrepreneurial business ventures need guidance and advice. Discuss and review where the business is and where you want to take it, for you cannot realistically do everything yourself.
You need to monitor the growth of your business, where and from whom each sale is coming.
Ask yourself how you will grow the business. One of the crisis points you will experience after the two-year growth spurt is sales stagnation. Overcome this by making a renewed sales effort and by learning more about your customers through marketing. The owner’s motivation to grow the business is important in that his or her influence in a smaller enterprise is great. Expertise in managing growth is also essential. Without this, the firm will lose focus and direction.
The access of the organisation to financial and human resources is crucial in determining the firm’s ability to grow sustainably.
The business may need additional financial resources, and this could prove a challenge. In the case of human resources, poor management skills can drain your organisation. Know your strengths and hire for your weaknesses.
In the end, the most important issue is whether there is a sustain-able demand for the organisation’s products or services.
In South Africa, building a sustainable business includes facing the challenges of competition with world-class organisations by building a strong, unified and inclusive organisational culture.
Entrepreneurs need to develop appropriate skills and competencies that will enable them to manage the process of diversity and establish an appropriate organisational culture.
They should be committed to the values of the organisation, not only behaving according to these values, but also modelling the behaviour of others. It is also important for organisations to maximise the diversity inherent in the South African workforce. Entrepreneurs should develop appropriate skills and competencies that will enable them to manage a relevant corporate culture.
For an organisation to be able to deal constructively with change, it needs to anticipate it by developing an ethos of continual reinvention.
Leaders in innovative organisations have learned how to encourage a creative model of thinking that prompts them to listen to new ideas, recognising those that can lead to better ways of doing things.
By encouraging innovative thinking by all employees, you are developing attitudes that challenge the status quo. Allow your mind to play around with some unlikely possibilities and the future will not come as a surprise.
We live in the age of the entrepreneur, when innovative men and women are able to spot patterns and trends and seize them as opportu-nities. Never forget that part of the entrepreneurial spirit rests in flexibility, ingenuity and comparative thinking.
Linda van der Colff is head of the Milpark Business School.