You see it wherever the taxis gather, and even on the pavements outside shops that attract lots of people.  Driving back from the Cape just before New Year, I noticed this just outside a little town called Paul Roux in the Free State.  The N5 between Bloemfontein and Bethlehem is undergoing some major revamps (still!) and there are sections where drivers may have to wait for up to twenty minutes because of construction work.  Right there, at the waiting point, a number of people were weaving between the stopped cars, offering cold drinks, snacks and fruit to weary drivers.  I thought it was great and what’s more, it occurred to me that we’re probably never really going to see an African communist – they’re far too enterprising a people to be tied down like that!

Enterprising people from all works of life see an opportunity and take it – sometimes without ever thinking about whether they’ve structured the business right, whether they have enough capital, or even whether the business is going to succeed.  They’re driven by the need of the moment, and when that moment is over, they move on to the next one.   In South Africa, there is a vast, unregulated, informal economy – just like in most other parts of Africa – which turns over billions of Rand every year in business.  Sadly for the taxman, not much of it reaches his coffers – either by way of VAT, income tax or employees’ tax.  But it sustains millions of people – every day. 

And there are amazing business ideas in that informal economy.  I remember reading one of Clem Sunter’s books about fifteen years ago, – when the cell phone industry was in its infancy, and recall the story of one innovative gent from Soweto who had chained (somehow) a number of cell phones up, and then charged people for making calls on them.  Nowadays, everyone pretty much has a cell phone, so his business would have had to adapt, or it would have died.  No doubt, he’s moved on to better things since then!

The key difference between the success of some of these tiny ventures and the failure of other larger ones is in the view of the entrepreneur involved.  On the one hand, you get the person who is only interested in making his daily bread – he has no thought for tomorrow, other than when tomorrow comes, he will assess the situation and adapt.  Today he may be selling cell phone time – tomorrow he may be selling cell phones.  But, in between times, he works hard at it. 

On the other hand, you get the person who has the view that his business is going to make him rich – quickly!  He needs to borrow lots of money to get started, and wants all the bells and whistles that go with it.  He, quite often, also works hard but often not very smart!  He makes more money in a shorter time, but history also proves that invariably he tends to lose it all – and other people’s money too – in a short time. (Within the first two years in fact).

How then can we harness the innovation and initiative in our informal economy, and stimulate it to greater heights?  How can we make a simple street vendor into a wealthy entrepreneur, an employer of people and a contributor to the state coffers?  There are two aspects to this:  firstly, there is the attitude of government towards business; and secondly, there are the actions of the entrepreneur himself.

R.Glenn Hubbard and William Duggan, in their article for “Strategy & Business” entitled “Roots of Prosperity” have this to say about the role of government:

“In the history of economic success, no two countries have ever followed identical paths. But there is a universal pattern nonetheless: Nations rise out of poverty when elements of a thriving business sector replace the previous economic system.

The factors necessary for this transition are known. Since 2004, the World Bank has tracked them each year in countries around the world for its “Doing Business” report. The report specifies 10 forms of government regulation that affect the various phases of a company’s life cycle: starting a business, obtaining licenses (such as construction permits), employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and closing a business. The fewer impediments that government places before entrepreneurs in any of these areas, and the less time it takes (for example, to stand in line) and the less money is required (for fees or bribes), the more business-friendly the country is — and the more prosperous. …Although the 10 criteria listed by “Doing Business” provide a road map for governments, governments alone cannot be effective in creating a healthy climate for business.”

It needs the efforts of entrepreneurs.  And, as for them – I think the success of their ventures requires two things – leverage and management.  Simply summarised – this could include leveraging one’s time through others, and leveraging one’s physical resources through the perceived value of goods and services; and then managing those resources in such a way as to allow not only for enough income to live on, but to allow for enough income to be ploughed back into future growth.  Manage your time, and manage your money! (not just how much you spend, but what you spend it on).

To make this simpler to understand, let’s use the cell phone entrepreneur as an example.

To start with he buys himself one cell phone, chains it to a block of granite near a taxi rank, and then sits there himself to manage the process.  He deals only in cash.  The phone records the amount of time the caller used, and at the end of each call, he multiplies the time by a fixed rate per minute.  He has secured a specific rate from the service supplier, and he now adds a markup on to the rate for his profit.  The only leverage he has at this stage is the difference between what the service provider charges him and the rates he charges his customers.  Given the fact that there are only so many minutes in a day, and the fact that he has to take time off to go to the toilet, eat, drink and rest, the amount of business he can do is limited.  There are constraints to growth – at first!

However, at the end of each day, he adds up his takings, separates an amount which he knows must be used to pay the service provider, takes an amount for himself to meet his daily needs, and saves the rest. (managing his money!)  After a time, he has saved enough money to purchase another cell phone, which he duly chains to the same block of granite.  He still manages the process himself each day.  But, he has now managed to leverage his time – he can now sell twice as much time per hour as he used to.  His service-provider cost has doubled to cater for the extra cell phone, but he still has the same personal financial needs each day.  This means he can now save more money each day.  It’s not long before he is able to buy two extra cell phones – giving him a total of four – all of which he alone continues to manage on his own.  His savings amount each day starts to go exponential.  He then decides to employ his younger brother at another taxi rank, kits him out with four cell phones – and his business really starts to grow.

After a couple years, he is employing ten people, all with four cell phones – and his business attracts the attention of his service provider.  They like what they see and they offer him a cell phone franchise.  He goes for it, and it’s not long before he ends up owning twenty similar cell phone franchises around the country.  It may have taken him anything between ten and twenty years to get there, but when he does – he notices that he no longer needs to do much work himself.  His time is now leveraged through over one hundred employees, and his management skills are leveraged through a well-designed system that is replicated from one shop to another.  His personal income has grown significantly, but he manages to ensure that he never takes out too much that it will put his business under pressure.

And it all started with one cell phone chained to a stone!

This may be a fairy story, but I have no doubt that it’s close to the truth for many – only the details may be different.  All it needs is commitment, hard work and patience.  The bottom line is – you don’t need a lot of money to start a business.  Just don’t be too proud to do the basics right, and don’t be in a hurry!

Today the need for women to work out of the home is stronger than ever. According to recent surveys, almost 70% are married and contribute up to 50% and more to the family income. Because family responsibilities play such an important part in the lives of men and women, millions of individuals and couples are seeking ways to make money at home. In addition, the cost of after-care and travel costs (which are only going to get worse) are increasing to the extent where it is almost no longer viable for both married partners to hold down a paid job, unless both are earning substantial salaries.
In the past decade, money-making, home-based opportunities that match a person’s skills, interests, abilities, and ingenuity have become almost limitless. The purpose of this guide is to show you that it’s simple and easy to join the ranks of success-minded people by choosing a work-at-home program that suits your interests and needs. Business histories have shown over and over again that the rewards and advantages of working at home can go far beyond a person’s wildest dreams!
In fact, it’s perfectly possible to launch a small business in your garage, backyard, study, or a room in your home, and even eventually become a giant corporation!! (Jim Gentes began the company GIRO in this way.)

BECOME A GOAL SETTER!

If you expect any level of success you must set goals. If you expect to be successful, you must determine what that means to you and the best way to achieve it.
There are two basic steps you can take to convert goals into achievements:

• You can decide on a specific Rand amount you want to achieve in terms of ultimate Investment; and
• You can set a time frame for obtaining the Rand amount you want.

Your goal should be specific and indicate What, When, and Where. After making a list of every possible way you might accomplish a goal, select the method that best suits your situation, and your style.

IMPORTANT CONSIDERATIONS YOU MUST ASK YOURSELF

• “How can I support my family while I build up my business?” This question must be worked out according to each individual’s circumstances. Many people start out on a part-time basis after their regular jobs each day, to see how much they can handle. Then when their incomes reach a certain level they will switch over and go full time.
• “What are my abilities?” To determine your abilities you will have to take an inventory of yourself. Decide what you enjoy doing the most and what you “feel” you would be good at. Examine every possibility and include every skill you have no matter how slight. Get some trusted friends and family members to speak into this evaluation, to be as objective as possible.
• “Is there a market for the product or service I have chosen?” Be cautious before you invest any money! Check it out by making inquiries directly to the company, competitors, or firms who are marketing a product similar to the one you are interested in. Test it on a small scale. Check it out thoroughly.
• “How long will it take this business to reach the financial goal I must have?” It’s really a question of knowing how much time you can dedicate to your business, and what your profits are for that time.

From there, a little simple addition will tell you how long it might take to reach a particular financial goal.

SUCCESS IS HAVING THE COURAGE TO BEGIN!

Starting a business at home is an economical way to start a small business that can easily grow into a larger one. Many entrepreneurs have proven that you don’t need a huge manufacturing plant to develop a successful business. Some of the most successful businesses in existence today started in a spare room or garage. It isn’t how you start out that is important. What really matters is this: do you have the courage to begin.

SELECTING THE RIGHT PRODUCT OR SERVICE

Take a close look at your interests and abilities, and then decide what type of marketing you want to do. For example,

• do you want to assemble items and sell them back to the manufacturer;
• do you want to sell directly to people; or
• Would you prefer selling wholesale to retail outlets?
• If you prefer doing piecework or assembling items for manufacturers, make certain it’s something you enjoy working with.

If you enjoy one-on-one-sales, then test the product out on your friends, relatives and neighbors.

The object is to find out what has the most appeal.

DEVELOP A GOOD MARKETING TECHNIQUE

A good marketing technique is one part of a business plan that is absolutely essential to its success. In fact, the ability to properly market a product or service is actually more important than the product itself. Even an inferior product can be a financial success if marketed properly. Seek out the advice of everyone in your field. Explain your needs and ask them questions. Experience is the best teacher. With good advice and a saleable product, you should be able to develop a winning marketing plan.

FINANCING YOUR HOME-BUSINESS VENTURE

The first place to look for financing is right at home. Take an inventory of items you don’t need and have a garage sale. Most people are pleasantly surprised at how much cash they can raise in a single weekend. Next, turn to members of your family or close friends who have faith in you and want to see you succeed. Offer to repay them through profit-sharing. Go to individuals in your community who believe in your personal worth. If you have a good credit history, your banker should consider you a good financial risk. Two other excellent sources would be your local Chamber of Business. Your Chamber of Business can assist you with referrals and other helpful information.

WORK-AT-HOME OPPORTUNITIES ARE EVERYWHERE!

Anyone who is serious about work-at-home opportunities need only look around them. There are thousands of options everywhere! There are employment opportunities that involve

• becoming an independent contractor;
• working on a commission basis;
• working for a salary;
• freelancing for pay;
• getting paid by the hour,
• receiving pay for each piece assembled;
• getting paid by the project, or

A combination of any of the above.

No doubt, what you finally decide on will depend on your particular needs and interests.

Remember, initiative breeds inspiration!