Share

Entrepreneur's growth struggle

Johannesburg - Johannesburg hipster Sifiso Dlamini turned his passion for sneakers into a small business, but like many South African entrepreneurs, he's battling to find financing to expand.

For six years, he's followed his heart's passion in making trendy sneakers that are a hip-hop staple.

"We take our time and make sure that everything is put together," he said in his workshop filled with spools of thread, pots of glue and scraps of leather, the 24-year-old said.

"It's more resistant, lasts longer," he said of his shoes. "I would say its magic."

His clients are largely fashionistas from Soweto, the Johannesburg township that styles itself as the epicentre of South African pop culture.

The shoes from his label Eish Hade - a slang for "Oops, sorry" - cost up to R600, a price that lets a man "feel yourself like a king" and gives women a way to walk "sexy, not in a hurry, but just relaxed", he said.

Orders are coming in, but Dlamini can't keep up. He works hard, but he only has two sewing machines and two assistants who earn R2 000 a month.

He certainly can't afford to open even a small shop in downtown Johannesburg, the stomping ground for the city's creative types.

Last year he tried and failed to get a bank loan for R100 000.

"Obviously I need capital to buy machines. I think people don't want to believe in this business because it is too small. They just want to see if we are making a profit," he said.

"People like Sifiso, there are hundreds of thousands (of them) in South Africa," said Lumkile Mondi, chief economist at the Industrial Development Corporation, which helps businesses with loans of the million-rand scale.

"They don't have capital and it's a problem. So you finance yourself by your family until you make money. So, except if you have an affluent family, it's difficult," he said.

The irony is that South African corporations are sitting on cash reserves of more than R500m, even though interest rates are at 30-year lows, rather than invest in new businesses.

Business leaders blame the uncertain global outlook, and Mondi said South African companies are only willing to take a chance on new ventures in technology or financial services.

Government has tried to step in, creating the new Small Enterprise Finance Agency in April, with R1.4bn in funding to loan to small businesses over the next three years.

"Government has done its part, but people don't know about the institutions" created to help them start up businesses, Mondi said.

And when entrepreneurs approach banks for loans, they often don't know how to speak in the terms that the bankers want to hear - explaining things like market size or commercial plans, Mondi added.

Small businesses employ an estimated 65% of the 13.8 million South Africans who have jobs, and growing small businesses is seen as one way of beating down an unemployment rate mired at around 25%.

South Africa has set out a goal to create five million new jobs by 2020, a goal that neither government nor big business could possibly meet, said Clem Sunter, head of the AngloAmerican Chairman's Fund, the mining giant's charitable arm.

"Our goal for 2020 should be to create one million new businesses rather than five million jobs," he said, warning that South Africa needs to stop sitting on the success of its mining past and start embracing new businesses.

"It is the only way to create that number of jobs," he added.

For now, Dlamini is keeping all his receipts to start formally keeping his books. But he's still selling his shoes by word of mouth or on Facebook. He hasn't hired an accountant or started paying taxes.

 
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.06
-0.8%
Rand - Pound
24.04
-0.6%
Rand - Euro
20.55
-0.4%
Rand - Aus dollar
12.37
-0.2%
Rand - Yen
0.13
-0.8%
Platinum
901.20
+0.5%
Palladium
997.97
-0.4%
Gold
2,200.01
+0.2%
Silver
24.52
-0.5%
Brent Crude
86.09
-0.2%
Top 40
68,001
+0.5%
All Share
74,204
+0.4%
Resource 10
56,476
+1.5%
Industrial 25
103,644
+0.4%
Financial 15
16,491
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders