By Mitchan Adams, founder of Venture Builder, Aions Creative Technology
In South Africa, there are more than two million small, micro, and medium enterprises (SMMEs), which represent more than 98% of formal business1, and employ 50-60% of our labour force and contribute 34% towards GDP2. But – South Africa has the world’s highest failure rate among SMMEs, with 70-80% failing within five years3. The top three reasons for this failure rate are lack of access to finance, and poor planning4.
As a serial entrepreneur, I have experienced failures and many successes, and for future entrepreneurs here are my top tips to ensure you don’t become part of the start-up failure rate:
- Your idea is probably not unique, so your commitment has to stand out
- Become the subject matter expert
- Figure out what you need – funding or mentoring?
- Decide what you’re prepared to give in exchange for funding
- Remember that a bank loan is a viable option
- Connect with the right people
- Don’t wait for market conditions to be perfect for entry
- Define your vision, mission and purpose
- Get your paperwork and legal contracts in order
- Learn from my biggest learning
Entrepreneurship can be a tough journey. You’ll work harder than you thought possible, learn something new every day, take risks, worry a lot. But if you’ve done your homework properly, and with the right investment partner at your side, it’s an incredibly rewarding journey.