Why effective communication is important for SMEs

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Communication is an important part of marketing – how you communicate your message in terms of what your business offers and your value add is crucial.

Is there consistency to your messaging, which helps in building a good solid brand; whether it is on your website, your sales brochure or when you speak directly to your clients, and is it clear and easy to understand?

Communication is important in building strong customer/client relationships and retention.  All SMEs want to keep their existing clients as well as grow their client base.

Your clients will be more forgiving if for example, you are late on a delivery but you communicate this beforehand rather than just not saying anything. Don’t cause your suppliers, customers and staff frustration by not communicating timeously. Your customers will lose trust in you and you will lose them to your competitors in no time.

It is also important to get your communication foundation right from when you are small, because otherwise when you grow as a business, your communication issues and challenges will grow with you.

Practical tips for small business owners to become better communicators

  1. Create a communication- friendly environment. If you as the owner, value good communication, you will set the tone and encourage others to follow you.
  2. Hold useful weekly meetings with staff (time is money, so get to the point and don’t waste time talking about irrelevant items)
  3. Listen (news flash: you may not have all the answers) and if you don’t understand something, then ask for clarity and seek to understand.
  4. Ask for feedback. Yes- I this might be very uncomfortable for some of you, but you have to do this. This opens communication with customers and staff and will build trust and loyalty in your business.
  5. In the event of a crisis or conflict – Respond quickly; acknowledge what is going on and that you are attending to the issue. Don’t ignore the feedback or be in denial.
  6. Read objectively through all of your marketing material and customer communication – is it concise, clear and consistent? If not, review and make changes. You may need some help with this.
  7. Stop assuming everyone knows what is going on in your head. As small business owners, you are often having to run around performing many of the roles in the business, so you may be too busy to notice that not everyone is up to speed with what you are busy with, important information or challenges you are facing. No one is a mind reader. 
  8. Combine a few communication methods or different channels to best suit your clients & prospective clients. Not everyone loves email newsletters, but perhaps your clients prefer short mobile communication.
  9. Be aware of your body language (this speaks to non-verbal communication).  Actions speak MUCH louder than words, so make sure you are aware of what your body language is communicating, as it might be negative. Be professional at all times.

I do believe that as a small business owner, you need to be very honest with yourself– do a communication check, and what I mean by this is, how do you rate yourself as a communicator and communication levels in YOUR business? How do staff rate you, what are your customers saying? What do you need to improve, to help your business grow?

The good news is that every small business owner can improve on this. And you will improve in your personal life too. After all – we all want to be better communicators at home, with our kids, our spouses, our partners, family and friends.

Remember, the way you communicate will either enhance or inhibit your success and growth as a business. Paul J Meyer said “COMMUNICATION- The human connection – is the key to personal and career success. We couldn’t agree more! Jessica Cilliers is head of Marketing and Communication for SAICA Enterprise Development. Our vision is to play an active role in economic transformation in South Africa through advancing the sustainable growth of entrepreneurial Black businesses

Is your SME credit worth?

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At some point, every small business will require some form of credit which will be instrumental in enabling it to grow to the next level.

Valentine Jingura, Head of Pricing at FNB Business, said that without knowing and understanding the different forms of loans or funding mechanisms available, SMEs won’t be able to fully leverage credit to scale-up their businesses.

“Certain loans are suited for specific uses depending on the nature of the business and its requirements,” said Jingura, as he unpacks different forms of loans:

Alternate funding options 

Entrepreneurs often mistakenly assume that credit from banks is suitable for all their needs. In some instances your own equity, loans from private investors, family and friends, government funding and grants from Corporate Enterprise and Supplier Development Programmes (ESD) may be more suitable for early stage funding. 


Businesses are required to provide some form of collateral which financial institutions can use as security for the loan amount being provided. Security can be physical assets like property or financial instruments such as a savings account or share portfolio. 


This form of loan requires no collateral. The loan is granted based on the business’ financial standing and ability to repay the loan in the future. For example, short-term credit for an emergency or unforeseen event.  

Credit facility 

Allows the business the flexibility to withdraw, repay and re-use credit at its convenience. i.e. a business credit card or overdraft.

Commercial property finance 

This type of loan is used to finance the building or premises where the business will operate. i.e. a small office or large warehouse.

Asset finance

Is used to finance business equipment, vehicles and machinery.

When applying for credit it is essential for entrepreneurs to understand what lenders lookout for when reviewing a credit application. 

This can be practically achieved by answering these four questions:

1. How much money is needed and what for?

2. Does the business have a good credit standing or collateral if required?

3. Does the business understand its current vs future cashflow – and has the affordability of the loan instalments been stress tested?

4. How quickly will the loan be paid back?

“Before deciding on the type of loan you need to do your research and speak to your banker or expert to ensure you are utilising the best form of credit for your business,” concluded Jingura.

SMMEs to explore with Wi-fi

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Wi-fi has become one of the most used facility to connect wirelessly to the internet, using whether a smartphone, or other devices and Small, Medium and Micro-Enterprises (SMMEs) can also use it to connect.

“Connectedness is vital for the survival of SMMEs, said Alex Granger, a global speaker at the fourth industrial revolution business breakfast dialogue that was recently hosted by Ithala in Durban.

He added: “Wi-fi should be a human right. There should not be this password protection. It should be free. We must be able to get into a bus and Wi-fi must work, walk in the streets of Durban and Wi-fi must work. That connectedness is critical, but it means that government leaders have to be forward thinking, discern what is coming and be willing to take the risk”.

Khwebo Online did an online research to find out how SMMEs can use Wi-fi to their advantage. Part of the benefits of having Wi-fi in your business is that it is viewed by customers as a necessity, especially if you are in the hospitality industry, customers can use Wi-fi while they are booking a hotel or looking for a place to go visit, they can use it while they wait (for businesses like auto mechanics, salons, doctor’s office and legal practices). It keeps customers busy while they are waiting and therefore makes time shorter.

Wi-Fi creates opportunities for customers to talk about their experience to their social networks. As a business owner, you get free promotion for your business across various social media platforms and social proof that can influence potential customer’s future decision-making.

Wi-Fi can also be used to increase productivity. Cloud-based apps (a software programme that relies on remote servers for processing logic that is accessed through a web browser with a continual internet connection) make it possible to get work done from just about anywhere and connect with partners around the world. The cloud enables you to back up your data securely so you can still access it from anywhere, no matter what happens.

Although it has disadvantages like not having full security. It is difficult achieve full security due to Wi-fi connection being wireless in nature. It requires proper security authentication protocols and configurations.

Wi-Fi devices operate in full functionality and without any interruptions when they are within the range of access point (AP) and receiving good signal strength. Wi-Fi access is limited to about 30 to 100 meters. The other thing is that in case the Wi-fi connection does not work, minimal troubleshootings are needed. This requires one to understand basics of Wi-fi device from user manual provided by the manufacturer.

Prices for a Wi-fi router starts from R200 and they go up to R7000 depending on the type of brand you buy and how many metres does the access point reach. The Economic Development, Tourism and Environmental Affairs MEC of KwaZulu Natal, Sihle Zikalala once said at the World Economic Forum’s 2018 outlook for jobs: “It is vital that businesses should pay attention to re-skilling and up-skilling their workforces for the fourth industrial revolution because it will bring success and reduce conflict such as that already witnessed between meter taxis and Uber, and it was crucial to prepare SMMEs to embrace technology.”

Election butterflies for SMEs

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South African small business owners are unsure about how stable the market is going to be in the upcoming elections.

In Business Partners survey it show that 25% of small, medium enterprises (SMEs) believe there is going to be a negative impact in the market, 35% are uncertain and 40% believe there is going to be a positive impact.

The business owners expect to face cash flow challenges for the next coming six months. “This challenge is negatively impacted by an incapable environment with fluctuating operating costs.” This was added by the small business owners in the survey.

The chief financial officer at Business Partners, Siphethe Dumeko says: “There is typically a slowdown in business activity prior to an election. This is reflected in the survey results. Local SME business owners indicated that they are cautiously adopting a “wait and see” stance.”

Dumeko added: “SME business owners should take note that in recent times great strides have been made through the Presidency in mobilising foreign investment, which will hopefully start to bear fruit post the elections.”

“This will be important to stimulating SME activity and business confidence. It remains important for SMEs to weather the storm by remaining positive that conditions will improve.” Said Dumeko.

Factors which impact SMEs confidence like reliable electricity supply, a better-quality operating environment, removing corruption and ease of doing business were found in the survey.

“Ultimately, the overall wish of local SME business owners is for a more stable environment with economic conditions that will improve their access to business finance,” says Dumeko.

He also said: “Both the public and private sector partners should work together to improve conditions for SMEs and to provide support to them where possible.”

Skills for SMEs to improve township economy

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Gauteng Department of Economic Development and Coca-Cola Beverages South Africa is giving small, medium enterprises (SMEs) a chance to learn a few things about how to run their businesses.

The Grow My Business Workshop happens every year in all the municipals that are in Gauteng and this year it will be taking from April 2 to 42019. On April 2 the workshop will be in Reiger Park community hall in Boksburg, on April 3 it will be at Rabasotho hall in Tembisa and on April 4 it will be at Chief Mogale community hall in Kagiso.

The General Assistant at Gauteng Department of Education Lulamile Sibanda who is also part of this workshop said: “Any small business owner who wants to ensure that their business is profitable can come and attend this event”. He added “This is also part of growing the township economy”.

Sibanda said: “Attendees of the event must also be able to sell Coca-Cola product in their businesses that is why in the invitation we’re focused on tuck shop owners and hawkers.” SMEs who want to register for can collect their form from Councillor Crawfowd at the venue of the event and Councillor Makhadi at Tembisa civic centre.

Sibanda said: “All small business people who are going to come to training they must make sure to bring their ID books or driver’s license”.

Co-op banks are the best bet for SMEs

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Co-operative financial institutions (CFIs) can help remove the hurdles that township-based small, medium-sized enterprises (SMEs) and co-operatives face when they seek access to finance, says Moyasi Mvelase is chief director: inclusive economy at Gauteng Department of Economic Development.

In an article published in Business Day, Mvelase argued that CFIs were one of the vehicles the province needs to address financial exclusion in all its manifestations.

CFIs refer to member-based, deposit-taking financial co-operatives; these institutions are owned and controlled by the members who share a common bond.

A CFI is a voluntary and democratic institution, meaning that members are its main driver. The Gauteng department of economic development will continue to lend a helping hand to ensure that collective community initiatives are successful.

CFIs offer the same financial services provided by mainstream banks while providing a safe, convenient environment for members to deposit or save money and obtain loans and other financial services at a low cost.

The enterprises in the townships have the potential to reduce unemployment and boost economic growth, bringing the country closer to realising the goals set out in the National Development Plan.

Both communities and enterprises stand to gain a lot if they can join forces and form CFIs.

It applies the philosophy of high interest rates on savings and low interest rates on loans. Interest rate on loans set by the organisation must be sufficient to cover operation costs, pay interests on savings and improve services.

The CFI model is building on the tradition of self-financing, self-helping and self-sustaining organisations that manifest through community-initiated schemes such as burial societies and stokvels, which reduces dependency on state funding for enterprise development. In other countries, CFIs are also known as credit unions, savings and credit co-operatives (Saccos) or financial service co-operatives (FSCs).

The CFI model has done well around the world. Statistics from the World Council of Credit Unions reveal that the movement is growing at a faster rate: total assets have shot up from $1.2-trillion to $1.8-trillion between 2007 and 2015, while membership surged from 177m to 223m.

This is partly attributed to the fact that people realised during the global financial crisis that CFIs performed better than the private banks. This has also changed the perspective of policy-makers around the world.

South Africa has not bucked the global trend, either, as the National Treasury has an agency dedicated to supporting and developing CFIs, known as the Cooperative Banks Development Agency (CBDA).

The CBDA aims to grow the sector to at least 150,000 members and increase its savings base to R500m by 2020. Currently, the sector has 30,000 members who command R236m in savings. According to CBDA projections, about 100,000 potential members should have joined the sector between 2016 and 2018. If the present performance of the sector is anything to go by, Gauteng will clearly contribute significantly to the national targets. Existing and future CFIs hold this potential.

Stokvels to become co-operatives

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 A Tzaneen businessman has taken to the road to encourage stokvels convert themselves into co-operatives so they can access government grants.

Through the Stokvel Talk Roadshow, Eric Phiri encourages stokvels to become co-operatives to be eligible to receive grants provided by the government to help them start their own businesses. The latest roadshow was held in Diepkloof, Soweto this week.

A co-operative is a business undertaken by a group of maximum 20 people, who work together to achieve their aims. Each member contributes a fair capital amount and shares in the control of business and is governed by its members.

The promotion of co-operatives is a flagship project of the Department of Trade and Industry (the dti) to assist co-operatives operating in the mainly informal, marginalised and unskilled economy through the dti’s Co-operative Incentive Scheme (CIS) – a direct cash grant of R350 000, for each entrepreneur, to start their own businesses.

Phiri, who is CEO of Stokvel Media Hub tells Khwebo Online that the Stokvel Talk Roadshow targets SMEs mainly in the township and rural areas.

“The purpose of the roadshow is to provide a platform to empower stokvel’s and help people who want to create their own business and are not waiting for the government. The government cannot do it alone”, Phiri says.

“We want to convince more stokvel’s to form co-operatives and start businesses in their own townships. They shouldn’t just operate as Stokvel’s but must go beyond and grow their business.”

The Gauteng Enterprise Propeller (GEP), which promotes, fosters and develops small enterprises in Gauteng attended the Diepkloof event.

The GEP assisted Stokvels to register their businesses with the Gauteng Provincial Government and provided them with information on various platforms that provide funding and information on how to grow their business, as well as the skills needed to sustain their business.

“We want to assist government in creating much needed jobs in communities, and grow township business and in-turn these businesses will employ other people”, Phiri adds.

The next Stokvel Talk Roadshow will take place in Tzaneen, Limpopo, during October 2019. Now that they have assisted Stokvel’s in becoming co-operatives, t

The Stokvel Roadshow’s next project is to get Stokvels to register their business on the Stokvel Media Hub database, which will assist them to apply for funding for their business ideas. Thus far, 800 Stokvel’s have registered on their database.