Articles – Page 6

New Year, new flow

Posted on January 29, 2018 by Webmaster

Cash flow management key to steering a clear course of business in 2018

A typical new year’s cliché is the commitment to resolutions – whether they be to start new healthy habits or break bad ones – something that is usually accompanied by the setting of new priorities for the year ahead. As much as this age-old tradition of self-improvement forms the basis for personal growth and success – for entrepreneurs, this sort of structured thinking is key to setting the tone for a productive year in business.

One of our competition judges, Kobus Engelbrecht of Sanlam / BUSINESS/PARTNERS says that for the year ahead, stringent cash flow policies should be top priority for entrepreneurs – especially where low economic growth forecasts paint a less than positive outlook.

“The successful management of cash flow, including the commitment to honouring debtors, creditors and payment deadlines, will play a vital role in determining the success of a business,” says Engelbrecht.

Engelbrecht lists the following tips for entrepreneurs looking to prioritise cash flow in 2018:

Spend time on forecasting – detail is key

Accurate forecasting is one of the best ways to ensure that your business stays on top of its finances over the next 12 months. When looking forward, it is important to first review historical financial statements in order to effectively predict potential dips in sales or increases in expenses.

Be real, and accurate

Though the temptation to be eternally optimistic is always present for entrepreneurs, it is more important that cash flow statements and forecasts are kept as real and accurate as possible. When income is overestimated, there is heightened risk because this can provide a false sense of security in the business. As such, figures should always be based on historical sales data – and any deviations should be derived from realistic and probable factors.

Regular updates

As a once-off review is not nearly enough to keep a tight hand on cash flow, entrepreneurs should review their business’ cash flow statements regularly. This will allow for the early detection of any potential problems that may arise.

Get savvy with payments

Technology is an entrepreneur’s friend – often providing a range of solutions at minimal (or at least reasonable) cost. Why then, should payment systems be any different? Entrepreneurs should tap into technologies that will make life easier – both for the business and their customers. It is also recommended that clear payment terms be set out from the onset with customers and third party suppliers to ensure timely compensation.

Plan for Plan B

While planning ahead and keeping a tight grip on cash flow throughout the year are both smart methods of business management, neither of these will be effective if there is no plan B in place for when trouble suddenly strikes. This is especially true in a volatile economy where the economic tide can shift without warning. It is a good idea, therefore, to have a blue-print plan to guide the business through any rough patches it may come across.

Stay on top of the game

The world is moving at an alarmingly fast rate and entrepreneurs would do well to keep up to date with trends and best practices, such as putting in place efficient cash flow forecast monitoring, monitoring the industry landscape and keeping an eye on interest rates.

Keep it simple

Budgeting and cash flow forecasts may appear complicated and overwhelming in the beginning, but they need not be. In some instances, a simple spreadsheet may be more than enough to effectively manage an annual budget. Regardless of whether the entrepreneur employs an accountant to draw up the financial statements, they should make a conscious effort to know exactly what these statements say and project, at all times.

Ten financial tips for business owners in hard times

Posted on November 20, 2017 by Business Partners Limited

By Veroshen Naidoo

Area manager at BUSINESS/PARTNERS

Financial management naturally tends to slip down the list of priorities for business owners when the economy is booming, finance is cheap and clients are plentiful. But when the tide turns, your ability to control your finances, especially your cash flow, becomes probably the most important survival tool available to the entrepreneur.

Here are ten ways for business owners to improve their finances during a downturn:

1. Consolidate your debt

It is easy for business owners to pile up debt during the good times – a credit card or two, a property bond, machines and vehicles bought with various asset-finance loans, generous lines of credit at suppliers and a ballooning bank overdraft. All of this can become crippling when the crunch comes, and one way to survive is to look for a financier that can consolidate it all into one loan with a long enough term to make the instalment affordable. You’ll probably end up paying more in interest, but at least you can survive the dip.

2. Take a panga to your expenses

The expenses in a business coming out of a boom time can always be slashed without necessarily hurting its core health, and when you think you cannot possibly cut anymore, go through them once again to find ways of doing more with less. Incentivise productivity and cost reduction among your staff, and invest in cost-saving systems such as GPS devices for your vehicles or insulation to bring down your electricity bill.

3. Monitor your debtors

The worst time for bad debt is during a downturn because you need every cent to keep afloat, yet the likelihood that your debtors might default is so much higher, because their businesses are also struggling. Focus on collections, rethink your credit policy and tighten your vetting processes before granting any more credit.

4. Relook your business plan

A business plan compiled in the fat years is of little use during a downturn. Often, survival depends on much more than tweaking the projected sales figures, but rather requires a radical rethink of your strategy. Discard the old plan and start working on a new one from scratch.

5. Negotiate with your financiers

As awkward as it is, start communicating early and frankly with your financiers about your situation. They know that nearly all of their clients are struggling. When you show them that you are one of their clients who is proactively making plans to survive, the chances are better that they will support a rescue effort, for example through a loan-repayment moratorium or even through an extension of your overdraft.

6. Manage minutely

A downturn requires intense hands-on management, with great attention to detail, simply because there is no room for the kind of errors that can slip in when you step away and manage your team with a light touch, as you can during boom times. Even if you are consistently a hands-on kind of manager, double down on it during the darkest days.

7. Negotiate with your suppliers

Even though your suppliers are very likely, just like you, to become wary of extending credit terms during hard times for fear of bad debt, there is still a chance that they might be willing to accommodate their best clients.

8. Look towards your neighbours

When work dries up and your team and machines stand idle it might be worth looking in places that you wouldn’t normally consider. The more established firms in your industry may well be over-committed and would happily pass over-flow work on to you, or they might find it convenient to outsource a certain type of smaller client to you.

9. Try support programmes

If you haven’t tried government incentive schemes and support programmes yet, now is the time. Don’t expect a flock of angels that will swoop to your rescue. Government programmes work slowly, but it might just be the thing that gets your business going again when the economy picks up one day.

10. Keep looking for business opportunities

Some of the best business opportunities arise during downturns. Competitors go bust, leaving huge gaps in the market. Consumers look for alternatives and are often more open to break their loyalty to their usual suppliers and service providers. The pressure of the downturn on your peers may open them up to the idea of a merger which can ensure the survival of both businesses, and take you to the next level even before the economy picks up again, as it always will.

How to create the best possible quotation

Posted on November 20, 2017 by Sanlam

By Jannie Rossouw

Head: Sanlam Business Market

When a prospective client invites us to do a quotation we need to realise that this is when the tackie hits the tarmac. This is when our marketing and word-of-mouth endeavours materialise in tangible outcomes … or not. If we get this action wrong we have wasted the time, effort and money that got us to this point.

This article serves as a checklist of the elements and packaging of a quotation that will give us a fighting chance of winning a tender/job.

1. Pre-quote Analysis

When the prospective client makes the initial contact, it is good practice to get as much information as possible in order to understand the client’s need and also to prepare oneself to have all the “tools” available for doing an accurate quote.

2. On the day of the quote

Confirm the time and the address of the client.
Pitch up (we have to be there to be able to quote).
Be on time (or notify the prospective client if you are running late).
Be presentable (a neat/professional appearance).
Write down all specifications (leave nothing to chance).
Have client referrals and examples of previous projects available (e.g. printed referrals and pictures of other successful projects placed in a flip-file). Give this to the client to look through while you are busy gathering information for doing the quote.

3. After the specifications have been determined and before leaving the client`s premises

Confirm the delivery date of a written quote (confirm if this time frame meets the prospective client’s requirements).

4. Quote email

Present a great introduction including these elements:

Thank the client for the opportunity of quoting for the business.
Confirm the prospective client’s brief, i.e. what the client asked to be quoted on.
Edify (stories of satisfied clients).
Indicate when the service can be delivered.
Provide a link to your website (if you have one).

5. Quotation as email attachment

Detailed break-down (individual costing of parts/service elements, as well a labour cost component)
The validity period of the quote
Deposit needed to secure the job (also provide your banking information – name of bank, branch code of bank, your account name, your account number, the reference to be used)
Use a professional letterhead with your branding – if you have one.
Make sure the terms and conditions are included in the quote to be signed-off by the client when the quote is accepted.
Include a client satisfaction guarantee – money-back guarantee/free repairs if not 100% satisfied, or even something as simple as “We guarantee to be on time for the scheduled job and to leave your premises cleaner than we found it”.

6. Quotation reminder

Sent an SMS to the client immediately after the email with the quotation had been submitted.

Proposed wording of the SMS

“Good day… (name of client). I have e-mailed your quotation to ………… (email address) as promised. Kindly advise if you do not receive it, or have any further questions. We will contact you to follow up on the quote. I look forward to your expedient response and trust that we will be able to do business. Kind regards ……………… (your name and the name of your business)”

7. Quotation follow-up

Phone the prospective client to confirm that he or she had received the quotation, address any further questions and gauge the client’s decision to accept or decline the quote. If the quote is declined, see Point 8 for a script example to understand the main consideration for his or her decision.

8. To do after the response on the quote has been received

Signed quote :

Check if the deposit has been received (if not, address accordingly).
Confirm the implementation/delivery date and time with the client.

Quote declined

Phone the client to determine why you lost the business.

Here is a sample script to consider:

Good day…………… (name of client), this is …………… (your name and the name of your business).

Thank you for granting me the opportunity to quote for your business. I respect the fact that you have chosen another service provider. Would you kindly tell me what your main consideration was for choosing another service provider, so that I may address any shortcomings on my part for future application?

(Leave it open-ended – take notes)

Thank you for your feedback. I will take this knowledge on board. I trust that you will keep our information on record for future reference.

Have an excellent day. (Ring off)

9. Implementation

Always deliver more than you quoted for (e.g. deliver faster; upsize your service support; fix something else while you are there, without charging for it).

The task of your implementation is to “wow” and surprise the client – make it a memorable experience for your client.

10. After implementation

Always ask them to rate your service afterwards (compile a brief questionnaire and let one of your back office staff phone each client; record the feedback; apply what you have learnt; give recognition where deserved and reprimand and re-train when required). Ask for referrals and introductions where positive feedback is received.

11. In closing

You can improve your success rate in turning quotes into business if you incorporate a quoting process which is both structured along the lines of this article and implemented in a professional manner.

Remember, getting the quote is important for the livelihood of the business and you.

May your business grow from strength to strength.

The key is to set realistic customer expectations and then not to just meet them, but to exceed them – preferably in unexpected and helpful ways.
Richard Branson

To support business owners with the important task of business planning, Sanlam gives you free access to the book Your Annual Business Game Plan for Success, which provides an easy and straightforward framework needed to draft a well-crafted game plan that will create the positive change and growth necessary for business success.

Go to www.sanlamgameplan.co.za to download your free copy.

Life after being named a 2017 Entrepreneur of the Year® winner

Posted on November 20, 2017 by Webmaster

Not only do entrepreneurial awards offer winning businesses a cash injection, but they are also a great platform to raise a business’ profile – which can often prove to be more valuable than the cash prize! An awards platform not only offers entrepreneurs the opportunity to expand their current network and receive expert analysis of their business and its process, but they also generate wide-reaching media exposure.

One month since the 2017 Entrepreneur of the Year® awards ceremony – which saw some of South Africa’s top entrepreneurs converging in one room for a morning of celebration and networking – we caught up with some of the winners to hear first-hand how the competition, and being a named a winner, has impacted their business.

Willem van der Merwe, owner of Africa Biomass Company: 2017 Entrepreneur of the Year®

“It has been a whirlwind since receiving the title of 2017 Entrepreneur of the Year® and winning has certainly elevated the public’s awareness of our company to another level. Not only have we received recognition for our work like never before, but it has also helped us to really demonstrate the value we bring to our industry.

“We have also been well-pleased with the media exposure our brand has secured since winning: the feedback we have received from clients and stakeholders, is in many ways more than double what we are accustomed to. While it is still early, we expect that the continued exposure will help us in reaching the goals we’ve set for the next level in our business. We’ll definitely consider entering again in the future!”

Siraaj Adams and Sizwe Nzima, co-owners of Iyeza Health: 2017 Emerging Business Entrepreneur of the Year®

“We have been overjoyed since our win – both with the experience, as well as with the attention we have received post the awards ceremony. Many of our clients and stakeholders have been most impressed with the accolade and have been very complimentary – which we really value.

“We have also received fantastic media coverage and increased brand awareness – our LinkedIn profile alone has received over 2000 profile views in just one month! We will definitely enter the competition again in the near future with the goal to take our win from the Emerging Business category to the overall title of Entrepreneur of the Year®!”

Siphiwe Ncgobo, founder of iLawu Hospitality Group: Job Creator of the Year®

“Winning the Job Creator of the Year® title was both a surprise and huge honour for us. We are extremely proud of this accolade as we have always believed that the strength of our success is purely based on the dedication, commitment and sacrifices of our past and current staff members.

“We feel very fortunate to have participated in this competition which gave us the opportunity for some much needed introspection into our operations and we really valued the fair and constructive feedback from the judges.

“Without a doubt, the media exposure we have received has positively impacted our business, and we are dedicated to working even harder to make sure that our current and prospective clients’ expectations are met. We have a lot to work on in our business and have already set ourselves a few goals to achieve within the next three to five years.”

Considering entering the 2018 Entrepreneur of the Year® competition – watch this space for more details. Entries will open early 2018.

Balancing work-life responsibilities as an entrepreneur

Posted on November 20, 2017 by Webmaster

By Gugu Mjadu

Spokesperson for the 2017 Entrepreneur of the Year® competition sponsored by Sanlam and BUSINESS/PARTNERS

Growing a business has often been equated to raising a child – a 24/7 role involving countless sleepless nights and never-ending concerns about the business’ future success. While a work-life balance is always strived for by entrepreneurs, the increasing consumer, economic and societal pressures means finding this desired balance is becoming even more difficult to achieve.

Increasingly people are working harder and longer, especially small business owners, to keep up with demands and to make ends meet – both at home and in the workplace. But while entrepreneurs may believe that more work hours, equals greater success, this isn’t always the case, and rather than this having a positive outcome and generating increased input from the extra work hours, this could have the opposite intended effect.

It is therefore not surprising that with these increased pressures and a skewed focus towards work that stress levels are on the rise. While high-stress levels are not uncommon and often unavoidable component of an entrepreneur’s day, week and month, elevated levels of stress due to increased pressures and a skewed focus towards work can lead to long-lasting negative effects, on both the entrepreneur, their family, business and broader network.

During Mental Illness Awareness Month last month, it was widely reported that increased and unmanaged levels of stress is a leading contributor to a number of mental illnesses, such as depression and anxiety. Furthermore – highlighting the consequences of an unbalanced work-life relationship – recent figures by the South African Depression and Anxiety Group (SADAG) reported that 74% of South African workers reported reduced concentration and a loss of productivity due to depression.

Business owners, therefore, need to be cognisant of the role that a healthy work-life balance can play in promoting good personal and business health.

How do our 2017 finalists and winners manage the daily struggle of balance?

Willem van der Merwe, owner of Africa Biomass Company (ABC) and 2017 Entrepreneur of the Year®:

“One of greatest challenges in running your own business is balancing the various aspects of your life, but I found that by involving my family in my business from early on helped them understand the demands and pressures placed upon me as my own boss. My family is my number one priority and having their full understanding and support is vital. No family support equals no business in my mind.

“Deciding whether family or business success is any more important than the other, and making a firm decision in this regard will you help you manage your environment accordingly and enable you to achieve your desired outcome and ultimately, your desired balance.”

Joe Hamman, owner and founder of Novus Group (Pty) Ltd and 2017 Entrepreneur of the Year® finalist.

“I don’t believe that I have perfected the balance yet myself, but I do commit to a routine of leaving the office at 6pm daily and not doing any work once I get home so that I can be 100% present with my family in the evenings. I do however wake up at 2am to catch up on any work while my family is sleeping.”

Siphiwe Ngcobo, founder of iLawu Hospitality Group and 2017 Job Creator of the Year®.

“To minimise work pressures, entrepreneurs – especially those in the start-up phase – should look to create trackable systems to monitor and track the business’ operations. When I started my business, managing a work-life balance was incredibly difficult, and it had a negative effect on my personal relationships. I’ve since learnt the benefit of implementing effective systems throughout my business which has meant that I don’t have to be physically present for each process. As a result, I now also have a team of qualified and capable staff who are able to take tasks off my hands.”

Four steps to create an inclusive work environment for your business

Posted on August 23, 2017 by Business Partners Limited

Business owners are lucky that they create their own work environment, unlike managers in large corporations who step into rigid, pre-created cultures. However, many business owners allow the working culture in their businesses to flow organically from their personality, without giving much thought to how it could be perhaps better engineered.

Kgomotso Ramoenyane, executive general manager: human resources at Business Partners Limited (BUSINESS/PARTNERS), believes that there is a lot to be said for consciously shaping the work environment in a business rather than leaving it up to chance, and specifically to aim towards creating an inclusive culture.

Inclusivity in a business means that the staff members feel valued and free to express who they are, where workers are keen to contribute not merely their contractually required output, but any of their ideas, knowledge and support that can help build the business. In an inclusive environment conflict is not shunned or suppressed, but channelled in such a way that everyone is keen to debate, participate and resolve, even if their ideas do not always hold sway.

Ramoenyane says inclusivity is not the same concept as diversity, although the two are closely linked. Almost always, diversity provides a force that steers an organisation in the direction of inclusivity because different kinds of people – young and old, male and female, black and white, local and foreign – are thrown together in one space and naturally seek to find harmony with each other.

But although diversity can often lead to inclusiveness, inclusivity is more than just diversity. It is quite possible, for example, for a diverse organisation to develop an oppressive atmosphere when management fails to make staff feel valued and included.

Why is inclusivity good for business? Can’t a regimented business where everyone does exactly as they are told also be a highly efficient organisation? Perhaps, but it is also a rigid organisation that is highly fragile in an ever-changing environment, says Ramoenyane. Inclusivity helps a business to adapt easily to changes in the market.

Her list of advantages of an inclusive business culture include higher productivity and lower staff turnover because workers feel valued, solutions to problems are found and implemented quickly because everyone feels free to contribute, innovation thrives because the development of products, services and systems are the result of inputs from many people, the knowledge base of the business expands, making it easier for the business to adapt to changes and ultimately enter and conquer new markets.

Ramoenyane acknowledges that creating an inclusive work culture can be difficult for owner-managers, many of whom characteristically have strong beliefs about how things should be done. Often, they are more used to being listened to than to listen. Another problem is that creating a workplace culture is intangible, abstract and all but impossible to measure. Given all the practical problems that business owners have to contend with, it is not surprising that something like the culture of the workplace is ignored as a fuzzy and less important issue.

Yet the results of an inclusive workplace culture is anything but fuzzy. Those very practical problems that tend to keep business owners preoccupied at the expense of working on their workplace culture can be solved so much easier if the whole workforce is fully engaged in the business.

Ramoenyane offers four steps that business owners can take toward creating a more inclusive business:

1. Define your business goals

If the business owner does not have a clear direction and vision for the business, chances are that the employees’ involvement in the workplace will not go beyond an I-just-work-here attitude. The vision for a business can go beyond growth in turnover and profitability and can include values and ethos. Having inclusivity expressed as part of your vision will of course help towards creating an inclusive work environment.

2. Share your vision with your staff

Whether it is in a series of workshops, discussions, memos or day-to-day interactions with your staff members, explain and engage constantly with them about your business goals. Invite comments and suggestions on how to make your vision a reality, and be genuinely open to their ideas. Employees who buy into your vision are much more likely to feel at home and included in your business.

3. Strive for diversity

With every new staff appointment that you make, you have the chance to increase the diversity of your company. The case for purposefully striving for diversity in your workforce is strong: it can enhance creativity and innovation, it can help to open up new markets and to increase productivity and profitability.

4. Give – and take – feedback

Don’t tell valuable employees for the first time just how valuable they are when they hand you their notice of resignation. By then it is much too late. Giving praise and corrective advice is an art which every business owner should refine and practice as a habit. But it is just as important to remember that feedback is a two-way communication. Business owners must learn to listen as much as they must learn to give feedback. If you can do both with genuine empathy, everyone in your business will feel at home.

Work on and not in your business

Posted on August 23, 2017 by Sanlam

By Jannie Rossouw

Head: Sanlam Business Market

You have surely heard the statement above, but what does it really mean?

To start, run and succeed in business is not for the faint-hearted. Why? International statistics state that 40% of all new business start-ups fail in the first year and 80% within the first 5 years, and 80% of those who made it through the first 5 years fail in the second 5 years. Hence, only 4% make it after 10 years. South Africa is no different – our failure rates might even be worse. It is said that business is simple, but not easy.

Where do you find your business on this bumpy road to success?

In the classic entrepreneurial book, The E-Myth, Michael E. Gerber unveils the reality of running and owning a business.

A business owner, according to him, is 3 people in one:

An Entrepreneur : visionary, innovator, is mostly unstructured, deal-maker
The Manager: practical, planner, implementer, creator of order from chaos
The Technician: the doer

Many people start their own business, because they are good technicians, but without prior knowledge and experience of running a business.

This article provides some insights into how the business owner can juggle the three roles (entrepreneur, manager and technician) to enable a business to grow and become more successful over time.

Practical guideline to illustrate how a business owner can work ON his/her business

Element	Task	Role	Where to get help
Business Owner– self	Improve own skills – continuous education	Technician	Industry training bodies / Technicon / University
	Decide which tasks / responsibilities may be delegated	Technician / Manager	Management team
	Redefine own responsibilities after the task above is done	Manager
	Focus on: Deals Innovation Financial well-being of business Competitiveness of business	Entrepreneur Technician Manager Manager	Sales staff Specialists in industry Accountant Accountant
People management	Create job descriptions	Manager	HR practitioner
	Negotiate key performance areas with staff	Manager	HR Practitioner
	Address remuneration and incentives for staff	Manager	HR Practitioner
	Upskill staff	Technician	Industry training bodies
Marketing	Choose the optimal marketing elements to market the business	Manager	Marketing Specialist
	Identify the target market	Manager	Marketing Specialist
	Do research – competitors and trends in industry	Technician/Entrepreneur	Press releases / website of competitors / market research specialist
Sales	Ensure optimal staff appointment practices	Manager	Staff placement agency
Sales (continue)	Identify the ratios and figures which will present guidance on how well the business is doing w.r.t.: Prospecting new clients Number of quotes Number of accepted quotes Number of implementations How well after-sales service is done Number of sales to existing customers	Manager/Entrepreneur	Sales Specialist
Information Technology	Is the business using technology productively?	Manager	IT Specialist
Management	Does the business comply with all appropriate legislation	Manager	Accountant
	Are management meetings scheduled and structured?	Manager	Management team
	Are minutes of meetings and decisions taken up to date?	Manager	Management team
	Are the financial reports up to date? Dashboard Projections vs. actual figures Corrective actions where targets are not being achieved	Manager	Accountant

In closing

The reality of the practical guideline above is that the majority of tasks to be done in business speaks to the role of manager. The implication is that, if you are doing all the work as technician (the doer), the progress and future success of your business will suffer.

This list of tasks is by no means complete, but it is a very good point of departure. It is very important that you find the balance between the roles of Technician, Manager and Entrepreneur that will work best for you and your business.

Go to www.sanlamgameplan.co.za to download your free copy.

Looking at business success amid a drought

Posted on August 23, 2017 by Webmaster

The Western Cape has over the recent past been hard hit by the severe drought in the region which has had direct, severe consequences on local businesses. Strict level 4B water restrictions have been implemented area-wide, and residents and businesses alike have been forced to curb water usage to 87 litres per person, per day. For many local businesses, this has demanded an immediate adaptation to regular operations.

Kobus Engelbrecht, spokesperson for the 2017 Entrepreneur of the Year® competition, says that although the situation in the Cape is concerning for both consumers and businesses, entrepreneurs are renowned to use their resilient nature and adapt in order to survive setbacks such as these.

To illustrate this, some of 2016’s competition finalists and winners shared their advice for fellow entrepreneurs on how to survive and grow a business during drought-stricken times:

“Although the drought certainly had a big effect on our local sales in the Western Cape, we were able to counter this through our export and Gauteng markets,” says Carl Pretorius, managing director of Just Trees, a wholesale tree nursery, and 2016 Medium Business Entrepreneur of the Year®. “Due to this leaner period however, we were forced to adapt our regular staff working hours to shorter work-weeks (four days instead of five) to allow all staff members to remain employed and ensure no retrenchments were necessary,” he adds.

Gali Gaon Segall, Director of Yemaya Group and 2016 Entrepreneur of the Year® finalist, says that her business has been fortunate to not be too badly affected by increased water restrictions. She does however recognise the importance of communicating the business’ efforts to save and conserve water: “Even though we have reduced our water consumption by replacing water-reliant treatments with others that are more water-sensitive, it is important that our clients and customers are visibly made aware of this – and we have found that in so-doing, our clients have remained loyal and happy to support our business,” says Segall. “In our spa’s and hair salons, we have trained staff to be conscious of their consumption – and because of all these efforts, our financial bottom line has not suffered.”

Also recognising the importance of positively contributing to the conservation of the previous resource, Nerina Smith, owner of Smithland Guest Apartments and 2016 Entrepreneur of the Year® finalist, says that her business took the decision to implement as many recycling initiatives as possible in order to mitigate their impact on the City’s water supply. “We installed a few water tanks to catch rain water, as well as grey water from our washing machines. We have used this recycling system to water our gardens, as well as for washing and cleaning wherever possible” says Smith.

She explains that from their successful rain-water harvesting and recycling process, the business was also able to assist a car wash business in the neighbourhood, who had been issued with notice to close the business if they could not find the means to use recycled water. Smithland Guest Apartments now donates its excess recycled water to this business – and has therefore prevented four community members from losing their stable income.

Engelbrecht says that as the drought in the Western Cape is still without an end in sight, it is imperative for all businesses, no matter the size, to band together in order to innovate ways to minimise the impact that these harsh conditions can have on a business.

“It is more than possible for small and medium sized businesses to survive and thrive, even under such strained trading and operating conditions – all it takes is a little perseverance and creative thinking,” concludes Engelbrecht.

Local entrepreneurs’ ability to save is a catch-22

Posted on July 26, 2017 by Business Partners Limited

Navigating saving methods for your business and personal finances

By Christo Botes

Executive Director, Business Partners Limited

South Africans have always been scrutinised for their ability to save, and with July marking National Savings Month – an initiative by the South African Savings Institute (SASI) which encourages all South Africans to embrace the idea and action of saving – there is a focus on the need to save.

But, given the declining economy and recent statistics the National Credit Regulator which show the total outstanding debt owed by South African consumers has increased by 2.94% to R 1.66 trillion, it emphasises how entrepreneurs, just like any other consumer, are feeling the pinch financially and potentially cutting back. However, at the same time, their livelihood relies on consumer spending for business profit.

This predicament means that an entrepreneur’s ability to save can affect both the bottom line of their business, as well as their own personal finances.

Putting the pressure that entrepreneurs are faced with into perspective is Statistics South Africa’s latest Consumer Price Index (CPI), a measure examining the average prices of consumer goods and services. In May 2017, the CPI rose for the first time in 2017 to 5,4% (from 5,3% in April 2017), and average prices increased by 0,3% (from 102,4% in April to 102,7% in May). While marginal, the price increases of goods and services – ranging from food and beverages, to transport – has a knock-on effect on South African consumers and places additional pressure on already strained budgets, resulting in less consumer spending, and thereby, potentially less business for local businesses.

As the challenge of saving and effectively maintaining cash flow can affect both experienced and inexperienced entrepreneurs, precautionary steps need to be taken.

While entrepreneurs may face different hurdles depending on the life stages of their respective businesses – a veteran entrepreneur may fall victim to bad financial management and overspending, while start-up entrepreneurs run the risk of mismanaging their loan repayments, whether from a financier or their own personal credit cards – the fundamental measures to successfully manage their finances remain the same.

Here are five tips for managing your business finances to avoid an impact on personal savings:

Separate personal and business finances: Entrepreneurs should define their salaries based on what their businesses can afford and not the lifestyle which they wish to maintain. Not only will this be financially beneficial in the long run, but it will also prevent discrepancies when SARS assesses the business as well as the owner’s personal income tax.

Keep up with your debt repayments: It is important to bear in mind that saving hard earned money whilst still in significant debt can lead to further implications as the cost of debt can be more than the interest earned from savings. Repaying debts can therefore be seen as the most important foundation when it comes to saving, as once an entrepreneur is no longer in debt, it is often easier to obtain bond type funding or access an overdraft facility in the case of emergency.

Streamline business processes: In order to minimise unnecessary debt, weigh up the costs incurred versus the productivity produced within the business. This can be done by continually reviewing processes and looking for ways to be as cost effective as possible.

Curb spending: Consider each expense before it is incurred and limit fixed monthly costs to the bare minimum. Another way to curb spending is to not invest in non-income producing assets such as cars, houses, boats and other tools that aren’t essential to the business.

Account for late payments: To minimise late payments, it can be beneficial to offer an early settlement discount to debtors that pay within 30 days. Such a discount usually ranges from 2% to 5%, which can be attractive for regular clients as it adds up to a significant amount over a 12-month period. Alternatively, another option is to make use of a debtors factoring house that can facilitate with invoice discounting for the business, and depending on the quality of debtors, an advance can be made up to 80% of the invoice value per debtor. This is a common form of working capital financing, but can be a very expensive form of funding.

Although the current economic climate is tough, entrepreneurs are renowned for taking whatever means necessary to drive their business forward. I always marvel at the resilience of entrepreneurs and how they innovatively face and conquer challenges. Keep it up, entrepreneurs. You are the heroes of our economy!

Reap the rewards when client expectations are exceeded

Posted on July 26, 2017 by Sanlam

By Jannie Rossouw

Head: Sanlam Business Market

Come to think of it, it all seems simple enough – clients will consider our product or service if we help them solve a problem or address a need they have.

But is this all there is to attracting clients to our business? The qualified answer is “no”.

Potential clients have unspoken expectations from a prospective business.

These include, but are not limited to the following:

If we are requested to quote for business, we actually need to pitch up at the agreed upon time to do the quote. This might be said tongue in cheek, but there is a tendency among businesses to not be diligent in this respect.
Communication should be open – especially when things are not going according to plan.
Use plain and simple language to ensure that clients understand contractual terms and considerations.
Clients expect honesty – if we cannot do the job, be up front about it and rather walk away from a deal than tarnish our reputation.
Clients mostly expect good value for their money and not necessarily the cheapest price.
Refrain from loading prices merely because a client might be living in or coming from an upmarket neighbourhood.
People want a good quality product and excellent service.
Product and service providers need to hit deadlines or negotiate postponements when needed.
Respect the property of a client if work is done on site – if something is broken, even by accident, clients will take us to task.
After sales service is of the utmost importance – we need to implement our product or service to meet and exceed client expectations.

Here are some of the benefits we will reap if we meet and exceed client expectations:

Positive word of mouth – prospective clients will start to contact us.
We will receive positive affirmations that can be used in our public relations endeavours, on our website and in brochures. Always remember to request clients to consent to the use of their testimonials.
It is easier to upsell or resell products and services to a satisfied client.
Clients might use us in their personal capacity and a positive experience in this context may spill over into their businesses, or to an employer needing a similar product or service.

Business is simple, but not easy. If we can get the basics right it will go a long way in enabling our success.

Go to www.sanlamgameplan.co.za to download your free copy.