SMEs - the problem with development capital in South Africa
SMEs - the problem with development capital in South Africa
Firstly they are slow to respond, with 6 months being the average waiting period to access the funding. As any entrepreneur will advise, too often the opportunity is long gone 6 months later. Entrepreneurship is about responding to market demand when it exists. Very few entrepreneurs are that far ahead of their competitors that time is not if consequence.
Secondly they insist on using traditional banking credit scoring methods to allocate funds. Most of these people will fail any traditional banking scoring system. Unfortunately bankers and accountants are in greater supply than people able to assess business plans, hence the focus on credit scoring.
In my humble opinion, the focus should be on the people and the business plan. Are they matched? Are they suitable for the intended business? Is the business in an appropriate sector? Is it in a growing sector? IS it within the government favoured sectors for future development and growth? Do they display a certain percentage of the indicators of an entrepreneur? Predicting entrepreneurial success is far from an exact science, but is that not the point of development capital? To develop entrepreneurs? To develop assessment skills?
We need to move away from the current stereotypes and find a new way forward, so that many more successful and growing businesses can be developed.
Rob Smorfitt
SMEs the problem with development capital in South Africa - To learn more about this author, visit Dr. Rob Smorfitt's Website.
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While I do not advocate that development capital should be handed out on an ad hoc basis, the current practice is also not working. Without exception, whenever the South African government makes development capital available for SME development, the caretakers of these funds generally fail in two ways.
Firstly they are slow to respond, with 6 months being the average waiting period to access the funding. As any entrepreneur will advise, too often the opportunity is long gone 6 months later. Entrepreneurship is about responding to market demand when it exists. Very few entrepreneurs are that far ahead of their competitors that time is not if consequence.
Secondly they insist on using traditional banking credit scoring methods to allocate funds. Most of these people will fail any traditional banking scoring system. Unfortunately bankers and accountants are in greater supply than people able to assess business plans, hence the focus on credit scoring.
In my humble opinion, the focus should be on the people and the business plan. Are they matched? Are they suitable for the intended business? Is the business in an appropriate sector? Is it in a growing sector? IS it within the government favoured sectors for future development and growth? Do they display a certain percentage of the indicators of an entrepreneur? Predicting entrepreneurial success is far from an exact science, but is that not the point of development capital? To develop entrepreneurs? To develop assessment skills?
We need to move away from the current stereotypes and find a new way forward, so that many more successful and growing businesses can be developed.
Rob Smorfitt
SMEs the problem with development capital in South Africa - To learn more about this author, visit Dr. Rob Smorfitt's Website.
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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