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SME's - the impact of government mindset on entrepreneurship
| Guest post by: Dr. Rob Smorfitt |
Article Overview: Does government mindset impact on SME's?
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Free Download - SMEs – SMEs struggling in South Africa. Why? By Dr. Rob Smorfitt |
SME's - the impact of government mindset on entrepreneurship
If we compare the mindset of the South African government to that of the Botswana government, a very different mindset is evident.
The Botswana mindset is such that the government is keen to assist anyone who wishes to become a business owner, but at the same time they have legislated too far to try and protect the entrepreneur from themselves. As a consequence there is very little real entrepreneurship occurring.
The South African mindset is such that they only show interest in the informal sector. Many of their decisions are racially based, not from the positive perspective of helping black people disadvantaged by apartheid, but rather from the negative perspective of excluding whites from their efforts. Yet despite this both black and white poeple are going all out to become part of the formal sector business sector.
Rob Smorfitt
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About the Author: Dr. Rob Smorfitt RSS for Dr. Rob's articles - Visit Dr. Rob's website Have an MBA and a PhD in entrepreneurship. Three key areas of ongoing research are entrepreneurship and innovation in large business strategy, the impact of legislation on SME development and SME finance. Run my own SME blog at http://sme-smb-smme.blogspot.com as well as an entrepreneurship and innovation for large businesses blog at http://innoveur.blogspot.com I have been self-employed since 1982. I have started or purchased in excess of 50 businesses since then. Most were sold again and a few were shut down because of a lack of profitability. Many were run by staff or family while I worked full time in my bigger businesses. Author of 6 books. Written articles for various magazines, newspapers and websites. Experienced in research within developing countries.
Click here to visit Dr. Rob's website  
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Re: The Top 50 Social Entrepreneur Blogs To Watch In 2009
- Do you think social entrepreneurship is just a trend or will it have a lasting impact on the small business community?
Re: WHAT BRINGS TEARS TO YOUR EYES ????
- Sure has. I sure didn't get successful marketing right away, i took the long hard road and learned everything on my own. There certain things that negatively impact your attitude and mindset which can devastate your business. I have had an experience once that did lead to the demise of a previous business because I made an emotional decision and not an intelligent decision.
Re: Are You Complying with the FTC?
- Hi Jeff,
Here's the problem. It goes beyond "regulation." They're flat-out telling us what we can and can't do with OUR businesses. This is no different than the U.S. government telling banks and private financial institutions that they HAVE to lend money to people that the government knows full well they will never be able to pay that money back. And, they did this because they felt that the banks were discriminating against these people. Are you kidding me??
That's why we're in the mess we're in. You can thank our wonderful government. So, now we have them telling us how to run our online businesses. It's not a big issue, and it's not a huge deal to me. But, once they get a foot in the door, they'll eventually get both feet in. Before you know it they'll have full control over e-commerce and OUR businesses. Don't think it can't happen.
Government already runs the banks and automotive industry. They'll eventually be running the internet.
The government needs to stay out of business and let free enterprise reign. Whatever happens, happens. But, there's no reason for the government to step in and take over when it's not their place to do so, all because they hate to see big companies go under. Hey, it's the companies fault, so why do we need to bail them out of their mess? Oh... because the government caused the mess in the first place and now they need to "fix" it.
Okay, my rant is over. I hope you see now what kind of affect this can lead to in the future. This is just one small stepping stone into a bigger plot.
I also know that the FTC isn't actually tied in to the government, per se, but don't think that doesn't matter.
Re: In-House or Outsource?
- Unfortunately, in the South African context, very few SMEs see outsourcing as an option. They believe it is too expensive, and they are paranoid that someone will "steal their ideas".
I believe that the three main functions that cannot be outsourced are marketing, sales and strategy. These must be done in house I believe. If you do not have the marketing skills then get them. Hire a consultant or attend a course, but get the skills. Even if you use a consultant, you need to understand what marketing is about, as no one knows your market like you do. Marketing is made to seem difficult and complex, but everyone who really understands their markets, can easily learn to do their own marketing.
In South Africa, labour legislation is extremely inflexibile, and consequently labour broking is a large industry. This is an ideal starting point for SMEs in South Africa, as it is a legally complex area, whih comes with severe penalties.
I say do it!
Rob Smorfitt
Re: Does birth order influence the desire to start a business?
- Hi Kevin,
I can't really say if birth order has anything to do with having more of a business mindset and taking risks. As for my situation, I have a sister who is three years older than me. I've always wanted to start my own business and work from home ever since I was in high school. My sister on the other hand got a four year degree and now works as a graphic design artist. I've mentioned to her on several occasions about doing freelance work and starting a side business. She just shrugs it off and says she doesn't have time to do something like that. It's a pitty because I know she would excel if she had the type of mindset that I have. She does great at her job and would do great as a freelancer.
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