Six practical tips for young entrepreneurs setting out to build a business
Global Entrepreneurship Week (8 to 14 November) celebrates entrepreneurs and aims to inspire more young people to make their mark in society. It’s a timely reminder that we need to support youth entrepreneurship to address our unemployment crisis and catalyze economic growth.
If you’re a young person looking to branch out on your own following university, school, or a few years in employment, you are embarking on an exciting journey. The challenges can be daunting, but there is a real sense of freedom and empowerment in running your own business.
Here are some practical tips about how you can get started as an entrepreneur.
1. Gain experience if you can
Many young people in South Africa create their own formal or informal businesses because they can’t find formal employment. However, if the opportunity presents itself, it can be worthwhile to earn some practical experience and start building a network in the workplace before setting out on your own. It may be worth applying for learnerships and internships to build up skills and knowledge before starting a business.
Sage, for example, runs an internship programme that offers young professionals an opportunity to apply their education in a real-world work setting. They are placed in different business functions, including customer services, customer for life, legal, marketing, IT, product delivery, partners and alliances, HR, and transformation.
Volunteering with an NPO or in your community can also be a great way to build contacts and learn valuable business skills.
2. Look into business skills and vocational training
Furthermore, young adults create side hustles to make ends meet and start businesses to create jobs. Some will be lifelong business owners, while others might one day prefer to secure a job. For that reason, it makes sense to invest in building practical skills that strengthen your CV as you grow a business.
Even if you already have a skill – for example, welding or computer programming – getting a certification can show customers you really know what you’re doing. And if you’ve never run a business before? In that case, an introductory business skills course can help you develop administrative, time management, marketing, sales, and interpersonal skills that will vastly improve your odds of success.
Sage, for instance, launched an enterprise and supplier development programme in partnership with Aurik Enterprise Development during the Covid 19 pandemic. The programme focuses on developing small black-owned businesses as Sage Business Partners. The SMEs in the programme are given support to scale their businesses, drive profitability and strengthen their business systems.
Other examples of cost-effective or free learning resources include:
3. Seek a mentor
As you set out on your entrepreneurial journey, speaking to someone who has already walked a similar path can be highly beneficial. A mentor can provide you with sound advice and introduce you to their business network. If you know someone in your personal network who can help, reach out or ask a friend for a recommendation. Other areas to look for a mentor include industry networking forums like Heavy Chef; industry associations and local chambers of commerce, incubators like Cape Innovation and Technology Initiative and Riversands; and industry conferences and events.
4. Start small, run lean
External funding from investors, banks, and the government can be relatively challenging to get in South Africa, so most young entrepreneurs need to self-fund (or bootstrap) their businesses. Even if your business generates cash, it pays off to be frugal in the early months or years. Some ways to save money are to barter goods and services with friends or other small business owners, use free and affordable cloud software when you can, and work from home rather than renting office space.
5. Don’t forget the formalities
There is a lot of admin involved in setting up your own business. You need a business bank account, and you will need to register with SARS for income tax and perhaps even VAT. You’ll also need to decide whether to register a company with the Companies and Intellectual Property Commission (CIPC) or run as a sole proprietor. These aspects are essential to consider, and you might need professional help from an accountant or tax advisor.
6. Invest in yourself and grow
Knowledge is power. Investing in yourself is the best thing you can do if you’re an up-and-coming entrepreneur. The tips and resource links provided are ways to access mentorship, networking, career, and life skills that will help you succeed as an entrepreneur. These will help make you job-ready or business-ready as you begin your entrepreneurial journey towards growth and financial freedom.
Sage is committed to doing business the right way and giving back to communities by contributing meaningfully to sustainable initiatives. Our transformation strategy and plan aligns with the National Development Plan (NDP) to address inequality and unemployment and accelerate previously disadvantaged individuals’ participation in the South African economy.
Some ways we are contributing to youth entrepreneurship and employment include:
· YES internship programme: Sage is working with the Youth Employment Services (YES) organisation and government to create employment for more than 100 youth in South Africa. Working with government and business partners, Sage aims to help those on the programme to build skills and work experience over a year-long employment contract. Sage will offer product training for free to the learners.
· Bursaries for university students: Sage partnered with an external bursary management, level 1 Qualifying Small Enterprise (QSE) to manage bursaries for students studying at public universities. Sage South Africa supports and encourages continuous studying for youth as part of skills development and empowerment. Furthermore, Sage continues to provide previously disadvantaged youth and youth living with disabilities with financial support to further their studies.
· Bursaries for employees and their children: Sage is also offering bursaries for internal employees looking to further their studies through registered institutions and for colleagues’ children looking to study IT and accounting.
· FutureMakers Project: Sage’s FutureMakers programme provides hands-on experiences for young people aged between 13 and 17 to create solutions that combine the human element with machine intelligence. Sage FutureMakers is now in its second phase, with the programme being launched to 500 young people in five countries.
By Pieter Bensch, Executive Vice President, Africa & Middle East at Sage