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One of the first questions a journalist is taught to ask an interviewee is whether he still enjoys what he does. The theory goes that if the person responds about industry challenges or he starts waxing lyrical about outside forces, then he’s more nervous than he’s letting on. But if the answer is a short, sharp “I love it” then you know his eye is on the ball. And that was exactly how Raizcorp founder and local entrepreneurship guru Allon Raiz responded when asked.
The interview with Allon Raiz is timeous. With US retail giant Walmart coming into South Africa and gobbling up Massmart there’s been plenty of negative press about the implications of that for South Africa’s small businesses and how it’s one more nail in the coffin for those trying to compete with low-cost overseas imports.
What makes this interesting is that Raizcorp has recently entered into a joint venture with Massmart Holdings [JSE:MSM], whereby smaller entrepreneurs within the Raizcorp programme will be guided into the supply chain and helped to get a foot in the door. The obvious question: Isn’t Walmart and its business practices completely at odds with kindling a spirit of entrepreneurship in SA?
“What people forget is that Walmart’s entrance is a due diligence on this country, including economic and political stability. It’s saying to the world it chooses to be here based on the opportunity the region presents,” says Raiz. Having been involved in many behind the scenes discussions at places such as Davos, Raiz says he knows of at least another six major corporates looking at making investments in SA on the back of Walmart’s entry. “We’re growing up as a country and entering the world markets in a mature way.”
Perhaps. But it still doesn’t answer the question of how entrepreneurship can co-exist with dominant global corporates.
“The reality is the only way big business can stimulate small business is through their supply chains: but there’s also a lot of risk for all involved,” says Raiz. For example, he points out that for entrepreneurs to get their products into a Massmart store there’s an upfront listing fee, they have to comply with a host of international standards, they need to juggle cash flows to fit in with corporate pay schedules and meet minimum order quantities.
“Imagine winning a contract to supply a corporate and then being rejected because you can’t meet the demand requirements. That happens to small businesses,” Raiz says.
A concern for many corporates is when they do engage the small business sector the cost of bringing a new supplier on board is incredibly high, and with high failure rates there are many reasons not to look at potential suppliers.
The Raizcorp partnership model will see 230 small businesses assessed to see whether or not they’re suitable to supply Massmart. Once they make it through the vetting process, they’ll then be mentored to get their businesses up to the required standards and will then be able to supply one or two stores in the Massmart chain and be allowed to grow reputations as quality suppliers. As those reputations grow so do the opportunities.
“One of the things people forget is that with this Walmart deal also comes opportunities to supply into the rest of the international supply chain as well, not just to SA,” says Raiz.
While the jury is still out with regard to Walmart and its entry into SA, there certainly do seem to be some opportunities for entrepreneurs keen to punch above their weight.
The interview with Allon Raiz is timeous. With US retail giant Walmart coming into South Africa and gobbling up Massmart there’s been plenty of negative press about the implications of that for South Africa’s small businesses and how it’s one more nail in the coffin for those trying to compete with low-cost overseas imports.
What makes this interesting is that Raizcorp has recently entered into a joint venture with Massmart Holdings [JSE:MSM], whereby smaller entrepreneurs within the Raizcorp programme will be guided into the supply chain and helped to get a foot in the door. The obvious question: Isn’t Walmart and its business practices completely at odds with kindling a spirit of entrepreneurship in SA?
“What people forget is that Walmart’s entrance is a due diligence on this country, including economic and political stability. It’s saying to the world it chooses to be here based on the opportunity the region presents,” says Raiz. Having been involved in many behind the scenes discussions at places such as Davos, Raiz says he knows of at least another six major corporates looking at making investments in SA on the back of Walmart’s entry. “We’re growing up as a country and entering the world markets in a mature way.”
Perhaps. But it still doesn’t answer the question of how entrepreneurship can co-exist with dominant global corporates.
“The reality is the only way big business can stimulate small business is through their supply chains: but there’s also a lot of risk for all involved,” says Raiz. For example, he points out that for entrepreneurs to get their products into a Massmart store there’s an upfront listing fee, they have to comply with a host of international standards, they need to juggle cash flows to fit in with corporate pay schedules and meet minimum order quantities.
“Imagine winning a contract to supply a corporate and then being rejected because you can’t meet the demand requirements. That happens to small businesses,” Raiz says.
A concern for many corporates is when they do engage the small business sector the cost of bringing a new supplier on board is incredibly high, and with high failure rates there are many reasons not to look at potential suppliers.
The Raizcorp partnership model will see 230 small businesses assessed to see whether or not they’re suitable to supply Massmart. Once they make it through the vetting process, they’ll then be mentored to get their businesses up to the required standards and will then be able to supply one or two stores in the Massmart chain and be allowed to grow reputations as quality suppliers. As those reputations grow so do the opportunities.
“One of the things people forget is that with this Walmart deal also comes opportunities to supply into the rest of the international supply chain as well, not just to SA,” says Raiz.
While the jury is still out with regard to Walmart and its entry into SA, there certainly do seem to be some opportunities for entrepreneurs keen to punch above their weight.
