Small Business Funding in South Africa

There are plenty of government and private organisations that offer funding for small businesses in South Africa. Most of these funds are meant to support previously disadvantaged South Africans namely black entrepreneurs and women. Below is list of some of these small business funds.

The National Empowerment Fund

The first organisation for small business funding in South Africa on our list is  the National Employment Fund (NEF).The NEF is a part of the South African government’s development mandate to encourage black participation in business and entrepreneurship. It’s main objective is to assist black entrepreneurs in achieving funding as well as offering entrepreneurs non-financial support. Currently the National Empowerment fund has approved more than R10 billion rand to black owned businesses. Its four main channels of funding consist of iMbewu Fund, uMnotho Fund, Rural Community Development Fund, Strategic projects, Arts and Culture Venture Capital fund, Tourism transformation fund

iMbewu Fund

iMbewu fund is has been set up to support black entrepreneurs that want to start new businesses as well as existing black-owned enterprises. The Fund offers finance products ranging from R250 000 to R15 million. iMbewu fund offers the following support;

1. Entrepreneurship Finance

Enterpreneurship finance is one of the various forms of small business funding under the iMbewu fund. Entrepreneurship finance is aimed at providing start-up and expansion capital to new and existing businesses that are owned and managed by black people in the form of term loans, quasi equity and equity finance.

2. Procurement Finance

The second form of funding under iMbewu Fund is Procurement Finance. Procurement finance is meant to assist black-owned SMEs that have been awarded tenders or contracts by public and private sector entities. The product’s main objective is to ensure that qualifying SMEs have the capacity to carry out their contracts. Terms loans, bridging finance, asset finance and revolving facilities are offered to businesses.

3. Franchise finance

Franchise finance is another form of funding for small businesses under the iMbewu fund. Franchise finance is aimed at entrepreneurs who wish to start their own businesses by buying a franchise linked to a particular brand to reduce risks associated with start-up businesses lacking a track record.

uMnotho Fund

The uMnotho fund is the second small business fund under the National Empowerment fund. The uMnotho fund is meant to improve access to BEE capital and has five forms of funding which are Acquisition finance, New Venture finance, Expansion capital, Capital markets, as well as  Liquidity and warehousing. Funding is between R2 million to R50 million.

1. Acquisition Capital

The first form of funding under uMnotho fund is the Acquisiton capital.

2. New Venture Finance

The new venture finance is another form of small business funding under the uMnotho fund. This fund provides capital of R5 million to R25 million per project for BEE parties seeking to participate in medium-sized Greenfields projects with total funding requests of between R10 million and R200 million.

3. Expansion Capital

Under the NEF, the expansion capital small business fund provides funding of R5 million to R75 million to businesses that are already black-empowered, but seek expansion capital to grow their business.

4. Capital Markets

The fourth fund under uMnotho is the Capital Market fund. Companies specifically women led businesses receice investment. Also, this small business fund focuses on businesses that seek to list on the JSE or its junior AltX market. The Umnotho Fund through capital markets also helps listed BEE companies to raise additional capital for expansion.

5. Liquidity and warehousing

The last small business fund under uMnotho is the Liquidity and warehousing fund. This fund helps BEE shareholders who need to sell a portion or all of their shares. It also acquires and temporarily warehouses these shares before on-selling them to new BEE shareholders, and refinances BEE shareholdings where existing financing structures are costly and/or inefficient.

Rural and Community Development Fund

Also under the National Empowerment fund is the rural and community development small business fund. The objective of the Rural and Community Development Fund is providing funding to aspiring rural entrepreneurs.

There are 3 funds under the rural and community development fund which are, acquisition new venture capital and expansion capital.

1. Acquisition

Designed to cater for rural entrepreneurs and communities that want to buy equity in existing rural and community enterprises.

2. New Venture Capital

New Venture Capital small business fund focuses on assisting rural entrepreneurs,  co-operatives and communities with equity contribution towards establishment of sustainable new ventures in Agriculture sector such a forestry, tourism, and processing. Small to medium sized new venture projects are eligible and funding is between R1m and R50m.

3. Expansion Capital

The expansion capital small business fund is meant to facilitate the involvement and ownership by communities in projects promoting social upliftment of rural and community projects using entities such as co-operatives and private companies.

Strategic Projects

The strategic projects fund is another small business fund under the NEF established with a mandate to increase the participation of black people in early-stage projects. It seeks to include black participation and inclusion in the South Africa economy. The Strategic projects fund is at the centre of NEF’s investment strategy when it comes to securing the participation of black people in early stage projects or businesses.

Arts and Culture Venture Capital

The arts and culture venture capital fund, also a small business fund under the National Empowerment fund is designed to promote and develop the arts and culture sector by providing affordable loans to start and/or expand small businesses. The Arts and Culture department realises that in order to achieve radical economic transformation, access to funding must not be limited to few businesses. The Funds are meant to assist businesses become self-sustainable and not rely on government for grant funding. Funding is  available to businesses in all provinces, where more job opportunities can be created.

Industrial Development Corporation

Among other small business funds there is the Industrial development fund. This fund is available to those who have an existing business or wish to start a new one. The fund finances industrial projects and promotes partnerships between and across industries within South Africa and internationally. The industrial development corporation fund also focuses on diverse expertise to drive growth in priority sectors and takes on higher-risk funding projects. Black-owned and managed businesses along with those with employment equity are the major focus. The fund aims at developing the skills of black employees and business owners, by supporting local, regional, provincial and national government projects. The various sectors that are funded by the IDC fund include, agro-processing & agriculture, chemical products & pharmaceuticals, basic & speciality chemicals and clothing & textiles to name a few.

There are different types of Industrial Development Corporation Funding these funds are as follows

• Development Funds.

These funds are aimed at supporting projects that have high long-term impacts on the economy through growth. Development funds aim to bring projects out of the informal sector and into the economic mainstream.

• Agro-Processing Competitiveness Fund

Also a government fund, this fund provides support and helps businesses achieve increased competitiveness, business growth, job creation and development in the agro-processing and beverages sector.

• Product Process Development Scheme (PPD)

The objective of this fund is to provide financial support to micro and small enterprises where the total assets are below R5 million, annual turnover is less than R13 million, and the business employs less than 50 people. The fund aims to promote innovation and technology development with financial support that way it enables the development of new products and processes.

• Risk Capital Facility Programme

The Risk capital facility programme is aimed at providing risk finance to businesses owned by previously disadvantaged individuals that offer substantial job creation potential.

• Transformation and Entrepreneurship Scheme

This fund supports marginalised groups of South Africans such as women and the disabled. The objective of this fund is to gain access to finance that will help to develop and grow small businesses as start-ups or through expansions or acquisitions. In addition, this type of IDC funding offers mentorship and non-financial support including business planning, training, and mentorship.

• Green Energy Efficiency Fund

The Green Energy Efficiency fund’s objective is at improving energy efficiency and helping South Africa become a low-carbon economy. The fund aim to drive down energy related costs, improve production capacity, operational effectiveness and competitiveness, which can aid in job creation.

The minimum requirements to qualify for funding;

• Compliance with international environmental standards.
• Shareholders/owners are expected to make a financial contribution
• The contribution of historically disadvantaged people under special circumstances may be lowered, in which case the IDC will be prepared to extend finance in excess of the owner’s contribution.
• The project/business must exhibit economic merit in terms of profitability and sustainability.
• The IDC does not re-finance fixed assets since our aim is to expand the industrial base
• For expanding businesses the latest audited and actual financials (signed by the finance director, MD or CEO are required
• An updated business plan focusing on the proposed project/expansion.
• A detailed description of the nature of expansion, its related costs and revenues.
• A business plan.

National Youth Development Agency

The National youth development Agency is a small business Fund that offers grants, mentorship and development programmes for young entrepreneurs.  Formal and informal businesses that are in the start-up or development phase of their business can access funding. The fund has provided support to more than 24 000 youths, and more than 20 000 jobs have been created through this fund. The fund provides direct services to youth in the form of information provision, career guidance services, mentorship, skills development and training, entrepreneurial development and support, health awareness programmes and involvement in sports.

In order to qualify for the National Youth Development Agency you should meet the following criteria;

• You should be eighteen years old at the time of application
• Need the grant for business start-up or growth
• You should be between the ages of 18-35 years with necessary skills, experience or with the potential skill appropriate for the enterprise
• You need to be a South African citizen and resident within the borders of South Africa
• You should be involved in the day-to-day operation and management of the business

SEDA

Small Enterprise Development Agency, (SEDA) Is another small business funding option for entrepreneurs. The agency develops, supports, and promotes small enterprises throughout the country, plus they help ensure their growth and sustainability. The agency provides financial assistance such as loans and guarantees, to South Africa small businesses. They also provide assistance to businesses who want to purchase equipment and for the provision of working capital for small businesses in South Africa.

The technology intervention agency (TIA)

The technology intervention agency (TIA) is another funding option for small businesses. However, this grant is only available to individuals who work with a higher education institution or science councils and seek to commercialise their research. The grant is non-repayable and it is provided to support projects that are  run within a higher education institution. The funds range from R100 000  to R650 000.

The department of trade industry and competition (DTIC)

The department of trade industry and competition (DTIC) also provides funding to a number of businesses in various sectors aimed at development. The  funding is for  the purposes of economic development, black empowerment and to generally support industrial competitiveness in South Africa. Some of their funding schemes include, Automotive Development Scheme (ADS), aimed at the automotive industry, Production Incentive (PI), Critical Infrastructure Programme (CIP) and the Support Programme for Industrial Innovation (SPII) to name a few.

Isivande Woman’s fund (IWF)

Another fund small businesses can consider is the Isivande Women’s Fund. This government fund aims at supporting women’s economic empowerment by supplying them with cost effective, user friendly and responsive, available finance. The fund also offers support services to help improve the success of women owned small businesses. The Isivande’s Women’s Fund it targeted towards businesses that are starting up, expanding, rehabilitating, franchising as well as those that need bridging finance. The objective of the fund is to create self-sustaining black and women owned businesses by offering you primary financial and non-financial support. The fund also provides capital and supports formally registered businesses, that are operated mainly by women as well as businesses that have been in existence and operating for at least six months. The loans that are provided by this fund can range from R30 000 to R2 million.

The criteria for Isivande Woman’s Fund are as follows

• Your business should have been operational for 6 months.
• Your business needs early stage capital for expansions and growth.
• Your business should be 50% plus one share owned and managed by women.
• Your busines must have potential growth and commercial sustainability.
• Your business should have a social impact with employment creation.

Small Enterprise Finance Agency

The small enterprise Finance Agency supports existing small business and new ones with different forms of finance.  The different types of SEFA funds include bridging loans, term loans and structured finance.

Bridging Loans

The small enterprise finance agency offers short-term loans, which include working capital. The types of working capital offered by this fund include stock purchases as well as operating overheads. These loans are offered for only one year.

Term Loans

The term loans offered by the small enterprise finance agency are of a specific amount and have a specified repayment schedule, amount together with an interest rate. This type of funding is normally used to finance assets that have a medium to long-term lifespan, such as machinery, vehicles, office equipment. These term loans can be used to expand small businesses or for acquisitions and this loan has a repayment range of one to five years.

Structures Finance

The small enterprise finance agency also offers funding that falls outside the parameters of the term and bridge loans. They provide by a debt facility, which can be repaid over a period of five years and it can be tailored to a person’s unique requirements.

Khula SME Fund

Khula SME fund is another small business fund offered by Khula Enterprise Finance Ltd, it is also a government fund that aims to grow and increase the sustainability of small businesses. The major objectives of the fund are to offer small businesses early-stage and expansion capital, provide early-stage debt funding to small businesses  and offer support to small businesses in rural and peri-urban areas. The Khula fund also helps improve the business owners access to finance, grow businesses so they can create new jobs and encourage meaningful economic involvement of black South Africans. The fund’s aim is to foster entrepreneurship for men and women within the small to medium enterprises sector.

The following are the requirements for business seeking to apply for Khula government fund:

• Your business should be a South African SME with a majority share in their company and who are seeking to start and/or grow their company.
• Your business should be a South African SME’s who has a majority share in a business that is based in the rural areas.

Izibulo SME Fund

The Izibulo SME Fund is a partnership between Khula and Metropolitan Life Limited as well as The Median Fund (Pty) Ltd. Its objective is to:

• Provide early-stage funding to SMEs (improve access to finance)
• Provide SMEs with necessary infrastructural support and resources;
• Foster entrepreneurship for men and women in the SME sector
• Reach out to SMEs in far-flung areas of South Africa
• Encourage meaningful economic participation of historically disadvantaged South Africans;
• Invest in equity and debt, loans, loans convertible into shares (ordinary or preference shares)
• Purchase shares (ordinary or preference shares)
• Purchase debentures or convertible debentures (convertible into ordinary or preference shares)
• Purchase warrants, options and other securities of, or relating to portfolio companies
• Provide consulting services, skills facilitation and development to portfolio companies
• Provide working capital, expansion capital, the purchase of capital assets, refinancing of existing debt obligations;

The Black Business Supplier Development Programme (BBSDP)

The Black Business Supplier Development Programme (BBSDP) is another small business fund that offers cost-sharing grants to black-owned businesses to help them improve their competitiveness and sustainability. It is also a government grant but it does not support start-ups. The Black Business Supplier Development Programme only supports the expansions of existing small businesses. The aim of this government fund is to fast-track small and micro-enterprises, encourage links between black-owned businesses, corporates and the public sector and to complement affirmative procurement and outsourcing. This government fund provides black entrepreneurs with a grant to a maximum of R1 million.

In order to qualify for this fund you should meet the following criteria

• Your business should be a CIPC Registered company or corporation
• Your business should have 50.1% black ownership (Black, Indian or Coloured) or more
• Management team should be 50% Black
• Your business should have been trading for at least one year and have financial statements to prove turnover.
• Your business’ annual turnover must be between R250k and R35m per annum
• Valid SARS tax clearance and Vat registered if turnover is greater than R1 000 000.

Incubation Support Programme

The Incubation support programme is designed to create and develop successful enterprises. The support program assists enterprises with the ability to revitalise communities and local economies. If you are a registered business in South Africa, or a higher education institution, or a licensed or registered science council you benefit from this support programme.

This incubation programme is available to applicants who may want to establish their own incubators or want to grow and expand existing ones. The incubator may  offer physical or virtual incubation support services. It essential that the incubator is focused on establishing and/or growing enterprises that will graduate to sustainable enterprises.

The incubator may be a:

• Corporate incubator
• A private investor’s incubator
• An academic or research institution incubator in partnership with industry

Banks

There are a number of banks that provide funding for small businesses in South Africa. Some of these banks include, Nedbank, Standard Bank, and FirstRand to name a few. However, in order to secure a loan from any of these banks your business has to be viable plus you have to meet certain requirements. Most commercial banks have specialist SME divisions, that provide finance for qualifying entrepreneurs.

Venture Capital (VC)

There are a lot of venture capitalists that provide funding for small businesses in South Africa. The country’s VC sector has grown substantially over the years, with over R1-billion invested in start-ups and early-stage companies. Some of the top venture capitalists include 4Di Capital, a firm that has invested in start-ups such as Snapt, Aerobotics, Lumkani, and LifeQ; Silvertree Holdings, and Kingston Capital, all firms that have invested in a number of successful start-ups in South Africa.

Venture capitalists are more likely to invest funds once the business is established, providing greater profits in return for shares in the business.  Sometimes venture capitalists play a role in the company, usually at the board level. After a period of three to seven years, the venture capitalists sells their shares, either to the original owner, or to another investor.

Angel Investors

Angel investors are involved in a business at the beginning phase of development, often providing seed capital in the form of smaller funds for a business to operate and grow. There are a number of angel investors in the country that fund small businesses. Often angel investors are entrepreneurs who have a better understanding of the level of risk involved in investing with a business, and so they hardly require most start ups to go through too much paperwork as with a typical business loan. An angel investor also offers capital in exchange for an ownership stake, and this means that you won’t have to repay the investment. Some of the well known angel investors include Ernst Hertzog, Brett Mason, Avi Eyal, Joel Gascoigne, Brett Dawson, Michael Leeman and Lawrence T Levine to name a few.

Business Partners Limited

Another company that provides funding to small businesses is the Business Partners Limited company. This firm is an investment company for small and medium enterprises in South Africa. The company invests between R250 000 and R15 million in small businesses across all sectors, except for farming, on-lending and non-profit organisations. Investment financing is offered for businesses at all stages of development, such as start-ups, expansions, outright purchases, management buy-outs, management buy-ins, franchises, tenders as well as contracts. Business Partners Limited company also manages a number of specialist funds, that provide investment financing for defined-profile entrepreneurs. The firm also has a range of support services for all kind of entrepreneurs. This includes property management consultants, mentors who are allocated according to the company’s needs and access to other expertise required to ensure the success of the small business.

Takealot Business Model

Takealot is an online shopping platform, or online market place designed to provide a wide range of consumer products. The company’s business model is built on an online marketplace  that offers a variety of products such as games, music, accessories books and items in lifestyle categories to name a few. Founded in 2010, with about 2000 employees Takealot is South Africa’s largest online retailer.

Ownership And Investment Strategy

In 2010, the former CEO of MWEB Kim Reid and a US-based investment firm Tiger Global Management acquired Take2, an existing ecommerce business in South Africa and renamed it takealot.com. Thereafter, Takealot.com was launched to the public in June 2011. The company has had a significant investment capital of about US$100 million in funding from the investment firm Tiger Global in 2014, and a cumulative investment of R4.5bn by Naspers. Overtime Naspers has slowly grown their share in the company to almost 96% share ownership. Whilst part of the growth in Takealot’s market share has been slow and steady, Takealot’s business model has greatly benefited from mergers. Some of the company’s mergers include acquisitions such as the merger with Naspers-owned Kalahari.com, where about R1.2 billion was paid by Naspers to Takealot.  Kalahari.com was once one of the leading ecommerce giants in South Africa.

Takealot business model rests on these mergers including the merger between Superbalist and  Spree, also owned by Naspers group. The company has grown into related businesses and markets by purchasing the food and courier company Mr D. Takealot is also part of an umbrella group of tech companies such as PayU, the payment system, the data research company ,Similarweb as well as the classified website OLX ,since all are part of Naspers group of companies. In addition, Takealot’s business model focuses on long term growth thus, the company’s return on investment is only realised in the long term and not in the short or medium term.

How Takealot Generates Revenue

Takealot’s business model like many other online platforms in South Africa provides the infrastructure for the company and other sellers to sell their goods. It is an online marketplace that offers a variety of products and allows other third parties to sell their items on the online marketplace. Apart from its own retail line, Takealot has a thriving marketplace for third party retailers that can use the online platform for sales, returns as well as its warehousing and fulfilment capabilities. The online retailer charges a subscription fee for the third parties that sell their products on their platform and also earns a commission from the products the company sells itself on the online marketplace in addition to advertisements.

Some of the percentage commissions charged on selected goods on the marketplace include

• Cameras have a 4% commission.
• Electronic Devices, Gadgets and wearable tech, Computer Components, Gaming Consoles, TV and Audio Equipment, Liquor and Soft drinks have a 7% commission
• Academic and trade books have a 10% commission
• Baby Products, Camping &Outdoor Equipment have a 15% commission

For third party retailers Takealot;

• There is a monthly subscription for a seller account which is R300 per month
• Storage fees that are charged based on the size of the product the third party want to sell as well as the number of days the item remains in stock. These charges can range from zero rands to R1800.
• The company also charges fulfilment fees for items shipped from the Takealot warehouse

Takeolot’s Business Model on Technology

Aside from investing in its warehousing and logistics capability Takealot has also invested in its technological capabilities. The company hires artificial intelligence experts who work on features such as algorithms in order to create personalization (such as recommendations based on a user’s browsing history). The company has employed 1200 employees, half of them work in the supply chain and 200 are in the call-centre department. There are also 1000 drivers that work with Mr Delivery Courier providing delivery services.

Logistics

The success of Takelot’s business model also rests on the company’s strategy when it comes to logistics. In January 2013, takealot.com acquired a controlling stake in Mr Delivery in order to build out its own in-house logistics expertise under its own delivery Team. Currently, the ecommerce company contracts over 4 000 delivery drivers and completes over 1.6 million deliveries every month. The company has distribution centres 75 000m² in total, in the Western Cape, Kwa-Zulu Natal and Gauteng. The distribution centre in Johannesburg can store almost 4 million products at any time and about 10 000 parcels are dispatched per hour.  Takealot has three large warehouses, in Cape Town, KwaZulu-Natal and Johannesburg, and also several branches throughout the country, that handle orders for Takealot.com and its sister company Superbalist.com.

In April 2019, the online retailer opened its first series of collection points, branded Takealot Pickup Points. An innovative alternative option to delivery.  This way customers can collect and return orders any day of the week.  So far more than 50 Takealot Pickup Points are available in all the 9 provinces to enable the company to serve its 1.8 million customers all over the country.

Customers make orders on Takealot.com website, the products are then shipped and received at the distribution centre’s receiving depot. Takealot’s business model ensures that on average 80% of the orders are already in stock in the warehouse. A smooth process takes place between the delivery centre’s receiving depot, all the way to the storage of goods on shelves, boxing, and packaging, as well as classifying each order according to its delivery destination. The online retailor makes use of conveyor belts to systematically track the goods and for the correct classification of items before the collection trucks arrive. Takealot trucks then collect orders and distribute them to the local branches. Thereafter, the items are either taken to the collection points or delivered direct to the customer.

Takealot’s Products

Customers are able to buy products of their own choice and securely because of the online retailer’s own efficient logistics services. Some industry insiders estimate that the annual revenue made by Takealot is R5 billion, or around R417 million a month. Some of the products that can be found on the online platform include;

• Personal Products
• Recreational Goods
• Electronics (B2C)
• Home Appliances
• Fashion
• Health and hygiene
• Groceries and household
• Sports and training
• Gaming
• Computer electronics

Technology Companies In South Africa

South Africa’s technology industry is diverse. It covers areas such as broadcasting, local content, electronic media, postal services, telecommunications, and IT. Also, the country’s information and technology sector’s growth rate is above the world’s average. The established and sophisticated ICT industry has more than 3 000 companies. In addition South Africa is ranked as one of the top countries when it comes to worldwide IT spending. Below are some of the top technology companies in the country.

Naspers

The first company on our list of technology companies is Napsers. Naspers is one the leading companies in the internet and entertainment space in South Africa. It has invested huge amounts in a lot of technology companies all over the world. Founded in 1915, as the Afrikaner Nasionale Pers, Naspers has grown into a modern technology giant. The company was founded as a publishing house but its operations are now mainly in Internet companies. Some of the companies owned by Naspers include, OLX, Takealot, PayU, Multichoice, Supersport, and media 24 to name a few.

Afrihost

One of South Africa’s leading technology company, Afrihost was founded in 2000 by Visser, Armstrong, Meintjes. The company was developed to fill a gap in the internet service business since the cost of domains and web hosting was high. The company provides a wide range of products and services including ADSL broadband, fibre, fixed wireless, mobile services in addition to web hosting. It has grown from a small hosting provider run from home, to one of South Africa’s largest internet service providers employing about 250 people. The Johannesburg based technology firm also offers web design and internet marketing services.

CyberSmart

Founded by Laurie Fialkov Shaun Courtney, Zaid Bester and Dave Johnstone Cybersmart, was first an Internet café with no outside funders. Cybersmart has also grown to be one of the country’s internet service providers. Their products and services include ADSL broadband and web hosting services plus a wide range of connectivity products and they employ around 70 people.

Psybergate

Psybergate is another top technology company that was established in 1999 by software engineers.  The organisation works closely with some of the major universities in South Africa. The tech giant also provides software services to big companies such as SAQA, Absa, Foundation for Human Rights, Nedbank, RMB, Supergroup, FNB, JSE, Momentum Metropolitan, to name a few. The leading software solutions provider designs, builds, implements, maintains, supports, and hosts custom software solutions on both web and mobile platforms. They also provide consulting and management consulting services to their clients.

ASG

ASG is another leading IT company that has been operating for over 30 years as an outsourced IT support company. It has its headquarters in Johannesburg, Gauteng. ASG provides maintenance, outsourced IT services, technology, and software solutions, as well as IT support. The company has offices in Sandton, Midrand, Centurion, Durban, and Cape Town. The firm offers a wide range of IT services that a company may need to run its IT infrastructure optimally.

IT Evolution

IT Evolution, also part of the top IT companies in South Africa was established in 2007 and specializes in Ad-Hoc IT support, managed IT services, and computer networking. The firm partners with some of the global leader in technology such Microsoft, Mimecast, Solarwinds, MSP, Bitco, Intel, Afrihost, HP, Palladium to ensure that clients get the best services. Some of the services offered by  IT Evolution include online support, cyber security consulting, networking, cloud services and software and hardware sales.

Innovate IT

Formerly known as CompuSerge, the company was re-launched in 2006 and changed its name to Innovate IT. The company is a middle-market IT managed services firm with headquarters in Bellville. Also, the company has been operating for 11 years and offers cabling, and internet Services, business IT support, cloud services, as well as business IT consulting. It is also considered as one of the top technology companies in the western cape. Innovate IT’s mainly specialises in End-to-End managed services, meaning that they offer support and maintenance from the computer cabling through to connectivity.

Complete IT

Complete IT is also among the top software companies in Cape Town. The company has over 15 years of experience in the industry. The company provides IT support, connectivity solutions, communication solutions, and security solutions to name a few of their products and services. Since the year 2002 the company has been a leading ICT vendor in the country, offering competitive IT services and cutting edge technology to clients across South Africa. The firm has also partnered with other IT service companies and remote technology firms. Their products and services  range from ICT architecture, hardware procurement, implementation to maintenance and technical support.

Westech

Westech, also on our list of the top technology companies in South Africa offers IT support services to various companies in South Africa. Westech is based in Johannesburg and the firm has been operating for a long time since 1994. The firm also has offices in Cape Town, Durban, or Gauteng. Westech works in partnership with well known global tech companies such as Microsoft Silver and Dell EMC and it is a  well known and preferred IT support and services partner. The company provides services to businesses in all sectors.

Wired IT

Also an IT service provider located in Johannesburg, Wired IT offers managed IT services, Microsoft Office 365, cloud services, networking, malware protection, firewalls, and other software needs. The company mainly focuses on providing ICT solutions to small and medium enterprises.

Strategic IT

Strategic IT Group provides support services to various companies in Johannesburg, and surrounding regions. They also offer other services including computer and IT support, hardware and software services, Microsoft Office 365 solutions, cybersecurity services, Voice over Internet Protocol, web and graphic design, to name a few.

Datacentrix

Also one of the leading tech companies in South Africa Datacentrix , provides integrated ICT solutions and serves a large market covering Africa and Middle East. Some of their services include digital business solutions, technology solutions, managed services, cybersecurity, as well as other internet services.

Types of Business Ownership In South Africa

As a business owner or entrepreneur it is essential that you decide the type of business structure for your business. Below are some of the common types of business ownership structures in South Africa along with their advantages and disadvantages to choose from.

Sole Trader

The simplest business ownership structure in South Africa is a sole proprietorship or a sole trader. As   a sole trader you can operate your business on your own, control all the business operations and enjoy all the profits. However, as a sole trader you are personally liable for all the debts and taxes your business may incur. A sole trader can still employ other people to assist but you still maintain control of how your business operates. Some examples of sole traders include Spaza shop owners, general dealers and hairdressers. Normally sole traders are normally small operations that do not cash in a lot of income.

Some of the Advantages of Operating as a sole trader are;

• This type of business ownership is fairly easy to set up and run
• You have complete control of your assets and how your business runs
• A sole trader has fewer reporting requirements compared to other business structures
• The losses you may incur can be offset by other income such as your investments or wages
• Changing the legal structure of your business is easy

Some of the drawbacks of a Sole trader are;

• A sole trader has unlimited liability, that is all your personal assets can be taken away to pay off debts
• Raising capital for a sole proprietorship can be difficult when you are alone

Partnership

Another type of business ownership in South Africa is a partnership. A partnership is the coming together of two to twenty people who contractually agree to form a profit generating enterprise. Based on the partnership terms and conditions each partner can be given certain responsibilities and shares within the business. Also, the profit and loss sharing are agreed upon inception. It is important to note that each partner shares debt that the business may occur based on their profit-sharing ratios. Some of the advantages of setting up this types of business ownership in South Africa are;

• It is relatively cheap to set up and operate
• Raising funds for a partnership is not that difficult since all the partners can contribute towards the capital
• If more than one person is involved in running the business they can each bring their unique skills and experience to the business
• The reporting requirements for a partnership are not that difficult compared to other business structures
• The sharing of management and staffing responsibilities helps run the partnership efficiently.

Some of the disadvantages of partnerships are;

• The possibility of disputes
• Changing the ownership of a partnership can be difficult and requires a new partnership to be formed

Private Company (Pty) Ltd

A private limited company is the third types of business ownership in South Africa. This type of business ownership exists and operates as a separate legal entity. A private limited company is separate from its shareholders and this means that it is responsible in its own rights.  The finances of a private company are separate from the director’s personal finances. That is, any profit obtained from the company belongs to the company. Also, this type of business needs to be registered at the Companies and Intellectual Property Commission (CIPC). A private company can be a complex business structure with high set up costs and administrative costs due to its additional reporting requirements. Some of the advantages of a Private Company are;

• The owners/directors can enjoy limited liability.
• Since a partnership can have more than 20 people. Raising capita for the business is not that difficult
• Selling and passing ownership is easy
• You can access loans and credit facilities easily with a partnership and are eligible to qualify for tenders

Some of the drawbacks of a partnership are;

• Setting up a private limited company can be costly
• The owners/directors of the company have limited control of the company affairs
• This type of business ownership structure requires complex reporting requirements
• The company cannot distribute its losses to shareholders

Public Company

Also one of the many types of business ownerships structures in South Africa is the a public company. This types of business can issue shares on the security’s/stock exchange to raise capital. Public companies are called public because anyone can buy their shares and own a stake of the company. At inception a public company issues securities through an Initial public offering (IPO). Afterwards the stocks of the public company can be traded on at least one stock exchange. Also, the daily trading of the public company’s stock determine the company’s value.  Some of the advantages of Public companies are;

• Raising capital is very easy
• Fund managers, traders and anyone interested can monitor a public company because they are listed on the stock exchange
• The risk of the public company is spread among its various shareholders
• Anyone can easily sell their shares to the public

Some of the drawbacks of public companies include;

• The costs associated with setting up and running a public company are high than most types of business ownership
• Decision making tends to be longer since there are more shareholders and directors
• There is limited privacy when it comes to public companies since a public company is required to publish its financial performance for the public

Franchise

The last type of business ownership on our list is a Franchise. A franchise is an already established company that has a successful track record that allows other companies to operate under its brand name. In return the company gets a certain royalty or payment for the use of its brand. There are many franchises operating in South Africa and some of them include fast food outlets such as KFC, McDonald’s and Nando’s.  Franchises offer training to anyone interested in using their brand in order to maintain the image and quality of the brands products or services.

Some of the advantages of a franchise business are;

• Ongoing training and support to optimise your business operations
• A reputable and established brand that is already accepted by the market
• Ongoing operational support

Some of the drawbacks of a franchise business include;

• Lack of freedom to run your business since you have to follow strict procedures and regulations
• High set up costs
• Paying royalties for the use of the franchise name.

How To Register A Small Business In South Africa

Most small businesses can register to be sole proprietors, private companies or closed corporations. However, the Companies and Intellectual Property Commission CIPC no longer accepts the registration of closed corporations. A small busines can be registered by the lodging of a notice of Incorporation document (CoR 14.1) and a Memorandum of Incorporation document (CoR 15.1 A-E). All the relevant forms are available in the CIPC website.

A Sole Trader

Registering as a sole trader with the Companies and Intellectual Property Commission (CIPC) is not necessary however you need to be registered with the South African Revenue Services and will be liable for tax if your income exceeds a certain threshold. Any unregistered informal small business is regarded a sole proprietor.

A Private Company

According to the CIPC, a private company can be registered with either a standard Memorandum of Incorporation (MOI) or a customised MOI. The Memorandum of Association sets out the rules for the management and maintenance of the company that the shareholders agree upon.  The standard Memorandum of Association is provided for by law and it is integrated into the company registration process. A customised memorandum of incorporation allows shareholders to put in place certain conditions or remove certain requirements. A customised MOI may need the assistance of a legally qualified person and companies with customised MOI’s can only be registered manually.

Registering A small business with the Standard MOI

• You first register as a customer through the CIPC website or through a collaborating bank. From there you can get your customer code and password
• The second step is making the payment. To register a company without a name reservation you pay a fee of R125 into the CIPC’s bank account and to register a company with a name reservation you pay a fee of R175. Ensure to use your customer code as reference when making the deposit.
• If you want to register a company with a name reservation you then reserve a name. There are three options for name reservation when it comes to registering a company with a standard MOI which are;

1. Applying for a name

• You can select this option if you want to apply for a name as part of the process.
• Your company will only be added to the company registration queue only after your chosen name has been approved.
• However, if the chosen name is not approved the company will be registered under the company’s enterprise number as the company name.
• If this happens you will need to apply for another name and follow a company name change process if your chosen name has been approved.

2. Reserving a name first then registering the company

• Your company will be added to the company registration queue if you have made the payment for registration

3. Registering the company using an enterprise number as a company name

• Your company will be added to the registration queue if you have already made the payment for registration
• You can later add a name through a name amendment
• A name amendment needs an approved name reservation, as well as special resolution to effect the change in the MOI.
• The registration process can be done online on the CIPC website and all the supporting documents can be uploaded such as the identity documents of all the directors.

Registering A small business with a customised MOI

Take note that registering a private company with a customised MOI can only be done manually.

• You first register as a customer on the CIPC website and obtain your customer code and password
• Make a deposit into the CIPC bank account, a deposit of R425 without a name reservation is required
• Reserve a company name
• A company can be registered with or without a name, if a name reservation is not included a company will be registered with its enterprise number
• The next step would be to register your company with a customised MOI manually by printing and completing the CoR 14.1, and CoR 14.1A form where you fill in information about the directors details.
• The service turn around time is approximately 25 working days

Documentation

Co14.1 Notice of Incorporation is lodged together with the Memorandum of Incorporation and contains the following information;

• The type of company
• The date of Incorporation
• The financial year
• The registered office of the business
• The number of directors
• The company name
• Whether or not the company name will be the registration number
• The reserved name and the reservation number
• A list of names to be checked by the commission

Cor15.1 Memorandum of Incorporation. This document contains the following Information;

• Details of the Incorporators
• The number of directors and/or alternate directors
• The share capital issued.

Registering A company using a 3^rd party

There are a number of reputable consulting companies that can assist you with registering your small business for a fee. These consulting firms can assist with starting a business in South Africa, company registrations, accounting and tax. Some even go as far as assisting with regulatory license and government grants as well as recruitment. Company registration consultants are knowledgeable and experienced consultants that can offer you with the right business solutions for newly formed or established companies.

Why you should register your small business

It is important for small businesses to register their companies with the CIPC because it will protect the business owners in case there are any lawsuits. Your assets and properties can be protected. Also, registering your company will increase your customers trust in you and your business. Suppliers, clients, and other business stakeholders prefer to deal with companies and not individuals. Thus, registering your company can broaden your client and supplier base. Registering a company signifies that you take your business seriously. In addition, securing funding and tenders is much easier when your company is registered. Banks and investors will not fund companies that are not registered. If your company is registered other people cannot claim your business or idea as theirs. Thus, the importance of registering your small business cannot be overstated.

Tips for improving customer service for your business

How important is customer service? When the question of what factors contribute to the success of a business arises, customer service is rarely left out. Providing excellent service and making it your priority to keep your customers happy is one of the ways which you can set yourself apart from your competitors. If you continue to work on improving your customer service, you increase your chances of success. Bad customer service can inconvenience the client, costing them their time and money. As a result, some customers are even willing to spend more money for better service and convenience.

Reviewing the quality of the service you offer your customers allows you to continuously look for ways to improve it. This article will give three tips that will help you improve the customer service in your business.

Knowledgeable staff

Not all staff members come in direct contact with customers. Whatever roles the various staff members occupy, it all boils down to one thing – the clients. Assisting, servicing and resolving customer issues is one of the most important parts of the business. If not the most important!

Testing how well your staff members know the product and the business will allow you to gauge the information gap that still needs to be filled. Training sessions can be structured around areas that need to be improved, opposed to touching on information that the staff members are already well acquainted with.

When new systems are implemented in the business, ensure that staff members are informed about those changes or have them go for training if necessary. This is especially important when the changes directly impact the customers. In some instances, staff members who don’t fully understand the product or the business still manage to be fully operational, carrying out their daily duties successfully. The issues only arise when they have to answer questions and resolve issues. A discerning customer will quickly pick up that the staff member doesn’t know what they are talking about. Staff members might look like they know what they doing, but it’s always good to run training programmes that include tests to make sure that they fully understand the business.

Efficiency

Efficiency means different things for different businesses. It can mean delivering goods to the client on time, reducing the waiting period, resolving queries speedily, etc. Whatever efficiency means to a business – improving it, improves the customer experience.

Depending on the nature of the business, efficiency can be improved by making some changes i.e. increasing the number of staff or using more efficient systems in the business. If there are no feasible structural changes you can make in order to improve the efficiency, looking into the technology space could be the answer. Getting new systems and training the staff costs time and money. A small business has a much smaller pocket when compared to more established businesses. Conducting a loss and gains review by comparing the money you will spend on new systems and training, with the long-term rewards you will reap with a more efficient system could prove that the investment is be worthwhile. If the money spent on improving the technology can be recovered, it’s a risk worth taking.

Soft skills

It’s important for staff members who come in contact with customers to possess soft skills. Trained staff members know how to communicate with the clients in a way that will not irritate them, this is especially important when resolving misunderstandings, solving problems or giving the client unfortunate news.

Not everyone is naturally empathic or able to express empathy well. Training will help staff members improve their use of language in showing empathy and other soft skills. Soft skills or good interpersonal skills also touch on other aspects of human interaction such as having a good work ethic and being a good team player. A good work ethic gives staff members the will and desire to help the customers. They understand that it’s not just about doing the job for the sake of doing it, it’s about going the extra mile to ensure that the client is happy and satisfied.

Recording phone conversations between staff members and customers is a good way to promote accountability. Having listening sessions with the staff members allows them to listen to themselves and see areas where they can improve. Practise makes perfect, when it’s part of the organisations culture to be courteous, and staff members are encouraged to communicate respectfully with each other. It will be much easier  to continue with this trend when communicating with customers.

Challenges of starting a business

According to smallbiztrends, “one-third of business owners admitted that running a company is harder than they initially thought”. It would be unreasonable to think that challenges faced by small business owners only surface once the business is up and running. From inception, entrepreneurs are faced with challenges, of which some they did not anticipate.

Is it harder to start a business today than it was 10 years ago? Possibly, new technology and other advancements contribute to the convenience we enjoy today but it also adds a new set of challenges. These challenges are totally new and unique to this high technology era, but some challenges are common and totally unrelated to the advancing technology.

Unforeseen circumstances

When trying to develop an idea into a business, it’s only natural to think about risks and the challenges you may encounter. Forecasting these potential challenges helps you prepare better for them. However, good preparation doesn’t make you immune to unexpected challenges that may interfere with the plans you have for the business. This does not mean that a prospective business owner should not put in effort and take time to plan. Yes, unforeseen circumstances will most likely come up but having a plan will help you see how far you have deviated from it.

Giving up might seem to be the only way out when starting a business is a lot harder than you expected.

Unforeseen circumstances can come in the form of extra costs.  Raising the capital can take up a lot of time and effort, when you have finally raised enough money to get your business started, the last thing you want to hear is that there are extra costs that need to be covered. These sort of challenges require a level of mental strength.

Hiring staff

Hiring talented individuals to be part of your staff can fast track the success of your business. On the other end, hiring staff members that still need to be trained over a certain period of time before they are ready can be time consuming – or it might not be a problem, depending on your personal timeline for the business.

The process of getting staff members on board is hardly ever easy. Small companies may struggle to compete with big companies in terms of salary packages. Staff retention can become an issue. When skilled staff members gain the skills they need, they may leave their work at small companies to work for more established companies that will pay them more money.

Comparing candidates and having to choose the “best one” is a bit tricky. Having to choose between someone that’s highly qualified but doesn’t have a personality that matches the organisations culture, and someone that’s fairly qualified but has the right personally to match the culture of the organization, can be challenging. You don’t want to make the mistake of choosing incorrectly and having to live with the consequences. There are laws in place to protect employees, you can’t simply get rid of someone when you no longer want to work with them, certain procedures need to be followed.

Self-doubt

Your first attempt at opening a business is usually nerve-wrecking. It only becomes less daunting when you are a more experienced entrepreneur – after having pursued other ventures. It’s your first shot at it, you might not believe that you have what it takes to run a successful business. You have left your stable job with a stable salary to become an entrepreneur. As if your own anxieties are not enough, people in your life keep reminding you about all the financial responsibilities you have to meet. In a moment of panic and anxiety self-doubt might start creeping in.

In order for investors, sponsors or clients to take your business seriously you need to be confident. If you don’t believe in your own idea it becomes hard for them to believe you, no matter how brilliant the idea is. A great idea needs a strong minded person to get it off the ground.

New entrepreneurs should guard against coming across as arrogant in an attempt shield their insecurities. It’s difficult to work with arrogant people but apart from that, arrogance comes across as over-selling and over-compensation. When you pitch for your business in an arrogant tone it sounds like you are over exaggerating the facts, you become less authentic and believable. When you are starting a business you need to find a balance and think carefully about how you present yourself.

Effective sales strategies to close deals faster

Passively waiting for sales to pick up without formulating a strategy to aid the process is like expecting a crowd of eager concert goers to sing along to a complicated song that they have never heard of. It might be a really good song as much as you might have a really good product. You trust the product, and you are certain that it is sure to fly off the shelves. No matter how great the product is, you do still need to formulate a sales strategy in order to create awareness. Sales will always remain a focus point because a business that’s not making money is sure to fail.

The rate at which a business closes it’s deals also counts. If the business takes too long to take off, it might crash before it gets off the ground. Having a sales strategy is good, but being able to close deals faster is even better. This article explores the sales strategies that will help you close the deal faster.

Clarity

Reluctant buyers are usually unsure due to the lack of clarity. When prospects are not sure about the product or the business, they may ask a series of follow up questions in order to get more clarity. It can be a good sign when customers ask questions, it shows a level of interest. However, there are customers who are immediately turned off when they don’t readily understand the business or the product. Grey areas and ambiguity should be avoided at all costs – some clients lose interest and it can take much longer to close deals.

Keeping the sales pitch as brief as possible to avoid overwhelming your prospects is a good approach, but it’s also important to carefully think about the questions they might have about the business or the product – before and after drawing up the pitch. In your sales pitch, make sure that all the important questions are covered. The more transparent and forthcoming you are, the higher the chances of closing the deal quickly.

Listen

Walking away from rejection without a lesson is more disappointing than the actual rejection. In order to find a lesson, try to take time out to listen to the reasons why your prospects are not signing up for your products or services. You might realise that the rejection follows a similar trend or realise that you need to make certain changes to your sales strategies.

Feedback that’s not coming from your target audience can be distort, focus more on what your target audience has to say.

When doing sales calls, communication is instantaneous. It’s a more intimate way of speaking to your prospects. A sales consultant can make the mistake of focusing too much on their sales pitch and what they have to say opposed to listening to what the prospect is saying. A robotic emotionless tone should be avoided at all costs. The conversation becomes one sided. The prospect might not feel comfortable enough to respond back or ask question because on their end it feels like they are talking to a machine.

Follow up, but don’t annoy

You do want a definite answer from your prospects so that you can decide whether you should continue to pursue them or not. In order to get a definite answer you might have to do some follow-ups with the people that you have spoken to. Follow-ups are important but they tend to borderline annoying. Some believe that you need to annoy the prospects if you have to until you get the answer you want. You can only use this approach if you are 100% sure that it won’t turn the potential prospects off. You can use different approaches for different kinds of people.

Why is annoying a potential or business associate a bad thing? Simply put, they might never want to talk to you again. As long as the communication line is still open there is always a chance that you will be able to sway them. If they block you from communicating with them, the chances become slim.

What would typically annoy clients? Calling them profusely and/or frequently sending them e-mails and SMS’s. Prospects might specify the times they are available to talk, when these times are not respected it might annoy them and make them feel like their space is being invaded. A condescending tone when talking to customers in an attempt to show them that you know what you are talking about and they can trust you, does more damage than good.

Reasons why most South African businesses do not survive beyond a generation

On May 14, 2019 Stats SA released South Africa’s unemployment rate figures. The official number of South Africans who are unemployed is 6.2 million, out of this figure, 55.2% comprises of young people. The high unemployment rate in South Africa and the gap between the rich and poor, combined with other factors affect how South Africans do business. Many South Africans are living pay-cheque to pay-cheque due to increasing financial pressure. Losing their job or a sudden change in their finances leaves them broke and struggling to make ends meet.

Survival

The state of the economy puts pressure on those who are trying to earn a living through opening their own businesses, it forces them to be highly depended on their businesses to survive. This limits the amount they are able to invest back into the business. Money invested back into the business can be used to expand the business or can be used to explore other opportunities. A business that’s not growing is likely to start receding with time. Building a legacy involves building structures that will survive through generations. Building such structures to solidify the business might need the business owner to pull as little money as possible from the business. Depending on the business for basics such as food, clothing and shelter limits the amount you are able to invest back into the business. The cycle of poverty in South Africa, for most South Africans, means you are not only taking care of your own needs but you also end up having to support other immediate or even extended family members.

Competition

Not being able to invest back to the business due to financial constraints can reduce the growth rate of the business. It gets even more difficult to compete with bigger companies that have access to more resources. Yes, approaching investors can leverage the gap between small businesses and bigger companies. However, if the competition is too stiff the investors become reluctant to put money into the business. When small businesses are not diversified it stiffens the competition. When the competition is too stiff and the market too saturated, the chances of the business surviving past a generation become slim.

Cheap imports are a tough competition for South African businesses. “Support local businesses” campaigns are not enough to keep customers from going for cheaper options.

Failing to dream

It’s possible for a business to grow past what was initially envisioned. However, if you don’t dream big, you limit your own growth prospects. Smaller goals are steps towards realising bigger dreams. A good example is formulating a succession plan for your business – anything can happen at any given moment. If you want to pursue other interests and wish to be less hands on, there should be equally skilled people who are well trained and ready to continue running the business. Some businesses are forced to shut down due to the sudden death of the founder of the business. A succession plan will ensure that such doesn’t happen.

Some South Africans put a limit to what they think they can achieve. They don’t believe they are capable of building empires. An empire doesn’t just feed you today and provide you with security today, it feeds generations to come whether you decide to keep it in the family or not. This is greatly influenced by their own realities. They might have had to start from scratch without the help of generational wealth or an inheritance. This might lead them to being less concerned with building a brand that will continue to survive even after they die. Some might feel that because they have had to work so hard, they don’t want to share their wealth, they don’t mind dying with it. As crazy as it sounds such a mentality exists among some South Africans.

Benefits of business networking

If you are looking to improve or grow your business, one way you can do that is through business networking. What is business networking? Simply put, networking is a social activity where you get to interact with others, with the aim of building relationships. Through networking you can build relationships with other entrepreneurs, potential clients, potential partners, investors, suppliers or any persons who have the skill sets you are looking for.

Continuing to sharpen your social skills in order to network better is sure to yield positive results. Having good social skills comes in handy when you are looking to form relationships.

Networking is more effective when the business relationship is mutually beneficial. Always looking for selfish gain puts off potential partners. When they stand to gain nothing from the relationship, they don’t see the point of forming a partnership.

It’s not just about forming new relationships it is also about maintaining them and taking care of them. Why invest so much in business networking? What are the benefits?

Expand knowledge

Not all is lost if you have not yet been able to form lasting relationships through networking, you can still use it as an opportunity to get as much information as you can. This does not have to be limited to talking to people that have more experience than you in the industry. The new game players could expose you to new technologies that you can also implement in your business. Through mentorship and networking, entrepreneurs get all the support they need to make better decisions and get answers to questions they may have. Networking also helps them take more calculated risks. In order to develop a wider perspective, entrepreneurs speak to other entrepreneurs and clients. To benefit more from the exchange of information, you need to be willing to share information as well for the benefit of others. Sharing helpful information could earn you a good reputation. In turn, you can use your reputation to form more business relationships.

Business opportunities

Leaning towards viewing other businesses as competition at all times, blinds entrepreneurs to the opportunity of teaming up with other entrepreneurs in order to generate more income for both businesses. One way this can be done is through recommendations and referrals.

Networking with other business owners can help the businesses find a gap that can only be filled through a mutually beneficial business relationship between the two businesses. Networking can also expose you to new business opportunities, not just for the purpose of expanding but also opening an entirely new business. Through interacting with other businesses and customers you  might discover untouched ground in the market. A business opportunity can also come in the form of getting new suppliers or getting a new sponsor for your business.

Confidence

When big players that you look up to in the industry know whomst you are, and are impressed with the work that you do, it’s an instant confidence boost. Receiving that nod of approval from influential people feeds your passion and your drive, you feel motivated to achieve even more. The new found energy and self-belief helps you dream bigger and thrive to achieve bigger.

The imposter syndrome can have a negative effect on even the most successful entrepreneurs. It causes them to lack the confidence that’s needed to pitch their ideas or sell their business in a way that’s appealing. It’s hard to be creative and come up with new ideas when you are battling with self-doubt. Believing in your own idea is important especially when others don’t readily get it but it takes a special kind of person to continue to push through without external votes of approval. Networking gives you the opportunity to speak to your clients in order for them to give you some feedback. The feedback adds to your confidence because you know exactly what your clients want and you know what you need to do to meet their needs.

In business, confidence is important. Without confidence you won’t be able to execute policies, deal with clients and create new strategies. Some business owners go as far as hiring coaches to help them work on their confidence. The cheapest, and probably the most effective way to boost your confidence is through networking. Learning different skills that help you look and sound more confident can be very helpful. But through networking, you can work on being genuinely confident and you will soon start exuding the confidence externally. There will not be a need to be coached through it.