Young entrepreneurs must be realistic | Fin24
 
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Young entrepreneurs must be realistic

Jun 11 2014 05:00
Fin24
Cape Town - It is crucial that South Africa bridges the gap between the youth’s entrepreneurial aspirations and the reality of establishing a business, according to Christo Botes, spokesperson for the 2014 Sanlam/Business Partners Entrepreneur of Year competition.

While many young people can testify that having a qualification opens doors, it is ultimately up to the individual to perform, work hard, possess a strong work ethic and rise above the rest when competing for a job opportunity, said Botes.

South Africa’s youth unemployment remains a concerning issue and the rising level of unqualified youth only increases the number of those looking for meaningful employment, warned Botes.

It is necessary to equip the youth with the right tools and knowledge to embark on an entrepreneurial venture.

The Youth National and Provincial Labour Market report released by Stats SA last week revealed that for those between the ages of 24 and 34 years, 21.9% held skilled jobs in 2014, compared to 21.2% held in 1994.

“There are 5.4 million young people between, and including, the ages of 20 and 24, and of those, only 17.5% are working towards obtaining a tertiary qualification," said Botes.

"Statistics show that 60% of these students will drop out and eventually, after many years, only 8.75% will obtain a qualification."

Ambition and commitment from an individual are crucial in order to successfully carve out a better future, according to Botes.

He said it is the same ambition and commitment that are driving characteristics of a successful entrepreneur.

“The only way to counteract our country’s alarming youth unemployment numbers is to promote entrepreneurship as a desirable career choice among the youth, which, when compared to other emerging economies, remains at a low level in South Africa,” he said.

The recently released Global Entrepreneurship Monitor (GEM) 2013 revealed that only a quarter of South Africa’s youth are potential entrepreneurs, while only 13% possess an intention to start a business in the next three years.

For young people intending to start a business within the next three years it is key to decide on the type of business, followed by determining the capital required to start the business and the experience needed to build the business.

“It is also important that the youth have a realistic understanding of the amount of work required to start a business," said Botes.

He said it is important for young entrepreneurs to think beyond the retail industry and instead consider industries such as manufacturing.

“Half of youth businesses are in the retail, hotels and restaurant sector as it offers low barriers to entry with respect to start-up capital and the level of business skills," said Botes.

"The industry is overtraded as a result and can encounter low growth possibilities due to competitors continually entering the sector."

While barriers to entry may be higher in manufacturing - if the business is planned correctly during the three intentional years - these barriers to entry will be easier to achieve.

The report also revealed that 65% of youth-started businesses offered employment to more than one employee, and 7% offered jobs to 6 - 19 employees.

“This illustrates the substance of young individuals starting their businesses," said Botes.

"If we can change the perception of entrepreneurship among the youth, as well as provide adequate knowledge and guidance, the number of young entrepreneurs will increase and in turn."

Then SA will begin to curb the high levels of youth unemployment, as well as overall unemployment figures.

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