Small business & Government Funding in South Africa?

Small Business and Government Funding in South Africa: Stop Waiting for the Rescue

I watched an interview on SABC News some time ago that left me with mixed emotions.

The presenter was speaking to a 24-year-old entrepreneur who owned a shisanyama in Gauteng. During the interview, the young businessman expressed his frustration that government had failed small businesses by not providing enough support and funding to encourage entrepreneurship.

He is certainly not alone in feeling that way.

South African entrepreneurs regularly hear about funding programmes, development initiatives, grants, incubators and government support. Yet for many small businesses, accessing that support can involve months of applications, paperwork, compliance requirements and uncertainty.

There is a much bigger problem, however.

If the survival of your business depends on government arriving with funding, you may be waiting for help your business cannot afford to wait for.

That may sound harsh, but business itself can be harsh.

Customers do not postpone their expectations because your funding application is still being processed. Suppliers still want payment. Stock still needs to be bought. Rent is still due. Competitors are still trading.

Entrepreneurship has never been about waiting for somebody to rescue you.

It is about finding another way.

Government funding is not free money

There is nothing inherently wrong with government funding.

If your business qualifies, the funding makes commercial sense and the programme genuinely helps you grow, use it.

But understand what you are accepting.

Public funding generally comes with conditions, compliance requirements, reporting obligations and processes. Those requirements exist for understandable reasons because public money must be accounted for.

The problem arises when an entrepreneur spends more energy trying to qualify for funding than actually building the business.

I know how frustrating that process can be because I have tried accessing some of these funding channels myself.

Time has a cost.

So does travelling to meetings, preparing documents, obtaining certificates and satisfying administrative requirements.

For a young business, the money and time spent chasing funding may sometimes have produced a better return if it had been spent finding customers.

That is the uncomfortable calculation entrepreneurs need to make.

Start with what you have

The shisanyama business from that television interview is a particularly interesting example because it can, with some creativity, be started without the enormous capital requirements associated with many other industries.

You need stock. You need somewhere to operate. You need fuel and equipment. You need customers.

None of those are insignificant costs.

But they can be approached differently.

Stock

You do not necessarily need a freezer full of meat on your first day.

Start smaller.

Buy enough to trade. Sell it. Replenish. Learn what your customers actually buy before tying up scarce cash in stock that may sit for days.

In a largely cash-and-card business, disciplined cash-flow management can allow stock levels to grow with the business.

Revenue should begin funding growth as early as possible.

Premises

This is often one of the biggest barriers for young entrepreneurs.

Commercial rental can kill a business before it has had a chance to find its feet.

So stop thinking only in terms of traditional retail space.

Could you operate alongside another business?

A car wash and a food business can complement each other beautifully. People waiting for their cars need somewhere to sit. People smelling meat on a fire suddenly discover they are hungry.

One business brings customers to the other.

That is not a funding solution.

It is a thinking solution.

And sometimes thinking is cheaper than borrowing.

Equipment

You also do not need the newest stainless-steel braai setup on day one.

Start with what works.

Borrow equipment. Buy second-hand. Have something fabricated locally. Trade skills or services with another business owner.

You need equipment capable of producing a good product safely and consistently.

You do not need to impress another entrepreneur with how much your equipment cost.

There is a difference.

Look at the money already flowing through your business

Funding has also changed dramatically.

Many card-payment providers and financial technology companies now use a business’s transaction history to assess whether it qualifies for working capital or short-term finance.

That does not mean every entrepreneur should immediately borrow money.

Debt remains debt.

But it does mean that government is no longer the only door an entrepreneur can knock on.

Suppliers may extend terms once trust has been built. Customers may pay deposits. Equipment can sometimes be rented instead of purchased. Businesses can collaborate. Services can be exchanged. Growth can be funded progressively from revenue.

There are options.

The entrepreneur’s job is to find them.

The woman on the pavement

One of the best examples I have seen was in Komatipoort.

Across the road from a large butchery, an elderly woman would prepare a small trading space, light her fire and purchase the meat she needed from the butcher nearby.

No fancy premises.

No elaborate logistics operation.

No enormous stock holding.

She had something much more valuable.

She understood where the customers were.

People would leave the butchery, smell meat cooking over the fire and wander across.

That is guerrilla marketing in its simplest form.

She placed the product in front of people at exactly the moment they were most likely to want it.

From a small beginning, funded with what she had available, she created an income stream that helped support her household.

Now ask the obvious question.

What would have happened if she had waited until somebody approved her business plan?

Stop waiting for permission to become an entrepreneur

South Africa absolutely needs better support for small businesses.

We need less unnecessary red tape. We need easier access to markets. We need practical business education. We need infrastructure that allows entrepreneurs to operate. We need funding mechanisms that understand the reality of small-business cash flow.

But entrepreneurs cannot hand responsibility for their success to government.

That is the point.

Government can create a better environment.

It can provide opportunities.

It can remove obstacles.

It can even provide capital.

But government cannot manufacture the hunger, creativity, persistence and adaptability required to build a business.

That part remains ours.

Before deciding that money is the only thing preventing your business from growing, ask harder questions.

What could you start with less of?

What could you rent instead of buying?

Who could you collaborate with?

Could you trade your skills for something you need?

Could a local welder build equipment in exchange for payment partly in cash and partly in services?

Could another business give you access to its customers while you give its customers another reason to stay?

Could your first customers fund your next stage of growth?

Sometimes the solution is capital.

Sometimes the solution is simply refusing to accept that the obvious way is the only way.

Government support should be a tool available to entrepreneurs, not the foundation on which entrepreneurship depends.

Build the business.

Generate income.

Create customers.

And if funding arrives and helps you accelerate what is already working, fantastic.

Just don’t sit beside the road waiting for the rescue vehicle.

It may arrive long after your business has run out of fuel. trade your services for? Will the local welder make you a braai-grid in exchange for a decent lunch, or two?

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