/ 23 December 2010

Kick-starting business

Launched in 1995 as a programme targeting youth unemployment and poverty alleviation South African Breweries’ (SAB) KickStart programme has grown into a platform for stimulating sustainable enterprise development.

SAB KickStart has become one of the country’s leading and largest private sector-based entrepreneurship programmes and is often referred to as an international benchmark for successful small enterprise development.

The results speak for themselves: 64% of grant winners from 2001 to 2005 are still in business, with 87% of those who received grants in 2004 and 2005 still operating. No fewer than 83% of SAB KickStart participants have reported that their businesses are growing and the turnover of Kick-Start businesses has increased by an average of 375%. Almost one third supply goods and services to SAB.

Now in its fifteenth year, the Kick-Start initiative promotes business awareness through training, supplying grants as start-up capital and providing post-training mentorship and assistance during the setting-up phase of the business. Each year, SAB KickStart has seen budding and existing entrepreneurs between the ages of 18 and 35 years from previously disadvantaged backgrounds enter the competition.

The primary intention is that candidates develop sound business ideas into viable and sustainable businesses. Many of these businesses have become suppliers to SAB. These companies have contributed to both job creation and the broader South African economy.

Methodology timeline
The programme is delivered through five distinct phases. In the first, an awareness campaign is run in the regions to elevate awareness of the competition and invite entrants. In second phase potential entrepreneurs are selected in each region by the company. These are invited to attend a business skills training programme which is run over 10 to 14 days.

On completion of this programme, entrants are required to draw-up a business plan. In the competition phase entrants present their business plans to a panel of judges, drawn from the SMME development and financial sectors. The judges award grants to those participants who have the most feasible and well-researched business ideas. The grants form seed capital for the business. As this phase is a competition, grants are not given to every participant.

Additionally, a regional awards and certification ceremony is held where all participants who completed the business skills course and their business plans receive a certificate. Grant winners are named at this function. In the fourth phase, a KickStart trainer is contracted to mentor and monitor each of the grant winners for a period of not less than six months. Monthly progress reports are submitted for the selection of two regional finalists.

In the final phase, regional finalists gather in Johannesburg for the National KickStart Awards ceremony. Regional finalists stand a chance of winning more prize money if their business is selected as one of the national winners. National winners also get additional mentoring and support from a KickStart trainer in their region.

Best of the best
To commemorate its 15-year history of promoting youth entrepreneurship, SAB this year embarked on a nationwide search for the Ultimate SAB KickStarter. This was to be an existing business owner, whose business was either started or expanded by the SAB KickStart programme in the past. In October SAB announced Antonio Pooe as the Ultimate KickStarter in a glittering awards function. Pooe, who hails from Egoli, runs a digital forensic services and fraud risk management business.

The young entrepreneur’s business rose to new heights after he won the annual SAB KickStart competition in 2007. His motivation for entering the SAB KickStart competition was financial, says Pooe. “I entered purely to raise capital to buy basic tools for the forensic lab. Failure was not an option — I had to win as I needed the money.” The dream came true.

Pooe used an initial SAB KickStart grant of R90 000 and the additional R150 000 he won in the national competition to equip his forensic lab. But cash was not the only benefit. “SAB KickStart had a big impact on my business. It made it possible for me to form networks with like-minded youth who wanted to make a difference. Three years later, I’m still in touch with many of my SAB KickStart group members,” Pooe said.

The media attention he received as a SAB KickStart winner was another benefit, and Pooe gave several radio, TV and magazine interviews that helped to raise Exactech’s profile. Started as a small one-man business operating out of Pooe’s home, Exactech Fraud Solutions is now a multi-million rand business, well on its way to being a national business, with offices in Johannesburg, Cape Town and KwaZulu-Natal.

Pooe now employs 24 highly-specialised IT experts — 65% of whom are youth. The company provides digital forensics, fraud prevention and operational risk management services to large corporations and does business in South Africa, Africa, the Middle East, Europe and recently in North America. In securing the Ultimate Kickstarter title, Pooe receives training, mentorship programmes and grants valued at R550 000. He aims to use the prize money to buy more equipment.

In the running
First runner-up Trevor Müller also runs a multi-million rand business, The Indibano Group. He originally participated in the 2003 SAB Kick-Start competition, using the grants and business insight gained from the experience to develop his company. What started as a small catering concern, now includes a chain of delis and cafés in corporate environments, a thriving corporate catering business and one of Cape Town’s trendiest cafés — the latest addition to their group of brands. Müller now employs 140 permanent staff and over 100 part-time waiters per month.

Second runners-up, brothers Luvuyo and Lonwabo Rani participated in the 2008 competition and have since built a business supplying computer training, sales and repairs and internet cafes. Luvuyo Rani started his business by refurbishing computers and selling them out of his car boot. His brother then came on board and they extended the business to include training to new computer users. Before entering SAB KickStart the brothers owned two training centres, they now own six training centres and 10 internet cafés, and employ 51 staff. They are now planning on expanding their business, Silulo Ulutho Technologies, from the Western Cape to the Eastern Cape and Gauteng.

As runners-up in the Ultimate competition, Müller and the Rani brothers will receive mentorship programmes and grants. SAB director of corporate affairs and transformation, Vincent Maphai said: “For many years we have focused on skills development and using this to offer people a platform which empowers them and improves lives. To celebrate 15 years of our SAB KickStart initiative is an important milestone for us and we are committed to continue to support and mentor young entrepreneurs in the future.” Based on its local success, the SABMiller group has adopted SAB KickStart in four other countries — Columbia, North America, Hungary and Botswana.

Facts about Kickstart

  • Over 80% of grant recipients are still in business after three years. Many have grown into multi-million rand organisations employing a significant number of people.
  • 83.3% of SAB KickStarters have reported significant annual growth in their businesses.

  • Turnover within SAB KickStart businesses has increased by an average of 375% since inception.
  • The average combined turnover of a small sample of 48 businesses is R 95 450 800 million.
  • Each small business creates an average of 6.7 jobs. SAB KickStart has helped create and/or grow over 3 200 businesses.
  • Skills imparted to beneficiaries are being felt by their own employees. Nearly 60% of beneficiaries reported they were involved in increasing their staff complement, and almost 45% reported a greater focus on staff training.
  • More than 38% of beneficiaries are fixed contract suppliers to SAB. Of those, more than 40% receive requests from SAB on a monthly basis.