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Small firms weather the strike storm

Cape Town – Rustenburg resembled a ghost town during the extraordinary platinum strike that lasted five months this year. Yet, a group of entrepreneurs found innovative ways to survive.

Rustenburg's economy was completely reliant on the mines in the area and when money stopped coming in, many businesses weren’t able to keep their doors open. Platinum Weekly reported that the economy experienced a 0.6% decline in the first quarter of the year as a result of this crippling strike.

The group of die-hard businesses were not alone in their attempt at survival. They were being mentored in an incubator model run by Raizcorp's Arize programme, which provides full service enterprise and supplier development programmes that guide entrepreneurs to profitability.

“We trade in hope,” Raizcorp chairperson Alfie Naidoo told Fin24 in a telephonic interview.

Mentorship and support

Arize is a programme for entrepreneurs who, in line with BEE requirements, own a small or medium-sized black-owned business. Corporate companies in South Africa sponsor successful applicants to attend the programmes.

“All of the businesses went through a torrid time,” he said. “We were unsure how we would support these businesses.”

He said credit had to go to Peter Kypri, Raizcorp’s prosperator manager and strategy guide. “He said we needed to show real empathy and care at a genuine level.”

As a result in their shift of thinking, none of the 19 businesses on their programme in Rustenburg had to close down and some even managed to increase their growth, explained Kypri.

Never rely on one client for income

“When the strike commenced the entrepreneurs knew they had to change their game plan to keep operating,” said Kypri. “They quickly realigned their strategies and set sail for a new destination – survival. Realistically, they knew they wouldn’t be able to grow while the strike was on because there was hardly, if any, business coming in.”

Raizcorp acted as a “beacon” during the storm and guided them. “The entrepreneurs on the programme put in all the hard work and actively went out to secure new opportunities, even venturing outside of Rustenburg,” he said. “They secured new products and services and cut costs where they could by restructuring their businesses.

"A valuable lesson learnt was that businesses should never rely solely on one client for all of their income.”

Raizcorp's Arize Programme

Raizcorp has identified the essential quality that stands out in every successful entrepreneur, and this quality is Blue Heart®. Entrepreneurs with Blue

“I didn’t have any income during the strike because my business is 100% reliant on work from Impala Platinum, so as a result of this I had to restructure my business,” said Chris Mokgethi of Chrismo Logistics.

Stronger than before

“Now that the strike has ended I am once again able to follow up on outstanding orders and submit invoices. Without the support of Raizcorp and the Arize programme, I would not have survived the last few months. The guides at Raizcorp kept me motivated when I was struggling, and assisted me with a new strategy. I am hopeful that business is going to improve again now that the strike is over.”
 
Mpho Tshukudi, a registered dietician, agreed: “My business took a slight knock during those five months because the mine referred fewer clients to us during the strike, and when clients did come see us they weren’t able to pay because they had depleted their medical savings and didn’t have any income. Nevertheless, I didn’t let this tough situation get me down. I kept pushing ahead and my company has even experienced some growth.”

What they learnt

The core lessons they learnt were to be able to operate:
- Outside their geography    
- Outside their sector
- Outside their product set

Kypri said that during the strike the entrepreneurs all realised their full potential, learnt a lot about crisis management, and risked failure in order to be successful. “They are all confident that their businesses will weather any storm that comes their way in future.”

“We got them together for group sharing,” said Naidoo. “They learnt at a business practice level from others and shared the same struggle. They formed a sense of community and it gave them the extra spirit. The books say that being an entrepreneur is a lonely journey: here a common journey brought them together.

“They are now more equipped to deal with issues in the future, than if they were going through good times,” he said. “The experience was the most rewarding aspect.”

Zanele Matome explains the Raizcorp magic:



Naidoo said Raizcorp has only reached 1% of its potential. "The JSE Top 40 companies have to spend 3% of their capital on enterprise development, so there is still a lot of growth for us."

Follow Matthew on Twitter.

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