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Working for a marketing company called Pelele Exhibitions, Kagiso Monnapula has constant dealings with small business. Through his experiences he says business will take the shape of the beer industry where craft breweries are starting to lead the way.
In the same way bigger brewing companies have to deal with this threat so the same will be said for the number of big shopping malls springing up around town.
Kagiso says people will slowly move towards supporting the smaller local players. And this notion will see people going local, which is lekker, a phrase I haven’t heard in a while. Some interesting insight from someone on the ground. – Stuart Lowman
By Kagiso Monnapula
Bogus doctors claiming healing powers for every illness under the sun and unscrupulous employment agents selling jobs that don’t exist, flood the classified section of some of the most circulating newspapers in South Africa like the Sowetan and the Daily Sun.
A day’s placement in the Daily Sun for an advertisement the size of a business card, costs roughly R2 500. In total sales, that contributes millions to the newspaper each month from similar types of advertisements.
I run a small advertising publication in Roodepoort and some of these fake doctors and unscrupulous employment agents are my customers just as they are the Sowetan and Daily Sun’s.
Initially I was caught betwixt and between allowing advertisers who are by definition, fraudsters, a marketing platform when they would probably go on to trick vulnerable people.
Up to now I have advertised close to 100 businesses but have had interaction with many more. They are all small and generally legit. Hair salons make up the most number of businesses in Roodepoort. Their owners are generally ignorant to the fact that the industry they trade in is worth billions and also have a negative perception of the oversupply of salons in the area.
My council to each one of them is that, a saturated market is a much safer bet to launch and operate in because the oversupply offers empirical proof that a customer base already exists and is constantly consuming the products in question.
It is easy to source information about the workings of corporates on the internet and other platforms.
Where small business is concern, you really have to physically interact with operators to fully understand the role that this sector fulfills.
In contemplations about economic growth, I at times wonder if the concept isn’t actually oxymoronic because for example, investment mostly flows in the favour of businesses that are already big but the tragedy is that, the small business cluster employs a much bigger number of workers and leads in creation of new jobs.
As big and influential Facebook is, the company only employs a little over 10 000 people. This tiny group but big in real employment terms, was responsible for $12.47bn of revenue last year. Our very own Shoprite which makes revolutionary sales of over R100bn, employs a much bigger number at 132 942.
In Africa we need more jobs, millions in fact.
The experience Roodepoort affords me is priceless because there is nothing more rewarding than to have a conversation with a business owner about their fears and wishes regarding their business. I literally take on the role of a father-figure to these businesses which in turn provides me with some key insight and lessons.
Three weeks ago I met a lady who runs what she explains to be the biggest day-care center in the West Rand, having 300 children under her care. Her monthly turnover is around R180 000 which is impressive because most of her competitors stagnate at around 20 children under care.
The secrete to her the exponential growth has been the guerilla tactics which once got her momentarily locked up at Westgate shopping mall’s security office. She had cordelled her rascals across the mall, while they sang songs for attention and as their drill instructor audaciously plucked posters on shop windows to advertise her daycare. This arrest came after four warnings for previous transgressions.
I am not a capitalist at heart and equally find communist notions questionable to a degree. What I am fully convinced of though is that, the SMME sector has some real benefits for the economy should it even go by that name in the future.
In my lay understanding, trends will most likely follow the change that is unfolding in the beer brewing industry were consumption is slowly shifting towards independent craft brewers.
Consumers will realize in the future that, it is more rewarding to support locally based businesses than to source their consumables from a Pick n Pay store at a near-by shopping mall.
More and more, it is going to make material sense, to work in the area that you live in and walk to your office premises rather than having to travel through snail-pace traffic to get to Sandton or Rosebank. Entrepreneurs who are going to want to localize and general consumption will drive this change.
In a country like South Africa which has infrastructural backlogs, the continued boom in shopping mall construction when the economy is on a decline probably can be excused for now but in the future a lot of these commercial developments will be vacant in favour of growth that is fueled by localised consumption.
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