In collaboration for a report detailing the societal benefits of Artificial Intelligence in South Africa, the Boston Consulting Group, Microsoft South Africa including Wits…
Small businesses in South Africa have the potential to transform the country’s high unemployment rate and revive its economy. However, to unlock this potential, the nation’s aspiring entrepreneurs and youth require a significant increase in mentorship opportunities, according to Mitchan Adams, the founder and CEO of local venture builder Aions Creative Technology and a serial entrepreneur.
Statistics indicate that approximately 70% to 80% of small businesses fail within five years, particularly in disadvantaged communities where job creation and economic development are most needed. One of the leading causes of these failures is a lack of funding and essential business acumen, challenges that could be overcome through effective mentorship during the start-up phase, asserts Adams.
“Many start-ups fail due to a lack of business experience. It’s a recurring issue I observe: individuals aspire to become entrepreneurs but make avoidable mistakes. In the early stages, a start-up cannot survive such errors,” explains Adams.
Having ample funding does not guarantee success; it is crucial to know how to allocate and utilise those resources effectively. Mentorship plays a pivotal role in helping entrepreneurs set appropriate pricing, manage assets, interpret financial statements, and execute successful marketing strategies.
However, mentorship is not only vital for entrepreneurs; it is also crucial for shaping the life skills and decision-making abilities of South Africa’s youth. Research demonstrates that mentoring has a powerful positive impact on young individuals, both personally and professionally. Sadly, many young people miss out on this opportunity.
Adams, a seasoned figure in the world of small business and entrepreneurship, previously co-founded instant EFT and online payments fintech Ozow with Lyle Eckstein and Thomas Pays. Within seven years, Ozow secured a $48 million Series B investment round led by Tencent.
His advice to aspiring entrepreneurs is simple yet powerful: “Identify a problem within your community and develop a solution for it. Take the time to understand the problem, as solutions require effort. It also helps to have a passion for what you’re doing or at least some experience in the field. Then, seek out someone who has started their own business or a local incubator to learn the intricacies of running a business.”
Adams emphasises that the success of small businesses largely hinges on gaining exposure and opportunities. Unfortunately, millions of South Africans and small businesses struggle to access these breakthroughs.
Therefore, there is a pressing need to provide more opportunities, and one effective approach is to involve the public as stakeholders in their success. By doing so, individuals can benefit from the value generated by creating and selling viable businesses.
It is clear that mentorship holds the key to unlocking the potential of South Africa’s youth and small businesses. By fostering mentorship programs and creating a supportive ecosystem, the country can empower its entrepreneurs, reduce unemployment rates, and bolster its economy for the benefit of all.