Want a job? Cre­ate your own

The IDC has com­mit­ted it­self to in­vest­ing bil­lions of rands into qual­ity youth busi­nesses across all sec­tors in the coun­try

CityPress - - News - S’THEM­BILE CELE sthem­bile.cele@city­press.co.za

It’s one of the coun­try’s big­gest crises: about 63% of the 20 mil­lion South Africans aged be­tween 15 and 25 are un­em­ployed. Even those who have man­aged to study to­wards a de­gree have landed in the un­em­ploy­ment queue. But for those young peo­ple who have taken the leap of faith and dared to start their own busi­nesses, the re­wards are great. They are able to do more than just pro­vide for their own fam­i­lies and sup­ply goods and ser­vices to their neigh­bour­hoods – they have also been able to pro­vide much-needed jobs for oth­ers like them.

To­gether with the Na­tional Youth De­vel­op­ment Agency (NYDA) and the Small En­ter­prise Fi­nance Agency (Sefa), the In­dus­trial De­vel­op­ment Cor­po­ra­tion (IDC) has made a R2.7 bil­lion com­mit­ment over five years to in­vest in qual­ity youth busi­nesses across all sec­tors, in­clud­ing man­u­fac­tur­ing, agri­cul­ture, me­tals and min­ing, and in­dus­trial in­fra­struc­ture.

IDC of­fi­cials say that while many young peo­ple have good busi­ness ideas, they fall short in their ex­e­cu­tion be­cause of a lack of fi­nan­cial back­ing and busi­ness skills.

“A chal­lenge that young peo­ple who want to start busi­nesses have is that they have never been em­ployed any­where. They don’t have any ex­po­sure to work­ing life and the skills that can be ac­quired in those en­vi­ron­ments,” said Stu­art Bartlett, the IDC’s head of de­vel­op­ment im­pact sup­port.

“It is im­per­a­tive for us as a de­vel­op­ment fi­nance in­sti­tu­tion to con­trib­ute to ad­dress­ing the youth un­em­ploy­ment cri­sis.”

The first hur­dle for young en­trepreneurs is of­ten a lack of cap­i­tal. Those turned down by banks of­ten be­lieve they are out of op­tions, when in fact there are other av­enues that could pro­vide them with cheaper loans and as­sist them with their busi­ness de­vel­op­ment.

Daniel van Vu­uren, se­nior youth en­ter­prise spe­cial­ist at the IDC, stressed the im­por­tance of sup­port struc­tures, es­pe­cially in the early days of a busi­ness.

“In our bid to curb youth un­em­ploy­ment, we have made a se­ries of com­mit­ments that we will be fo­cus­ing on over the next two and a half years. Th­ese in­clude the for­ma­tion of an part­ner­ship made up of the NYDA and Sefa, which will see a R2.7 bil­lion com­mit­ment to sup­port­ing youth-em­pow­ered en­trepreneur­ship, as well as other sup­port ser­vices in­clud­ing men­tor­ing,” he said. The IDC has also com­mit­ted it­self to pro­vid­ing R4.5 bil­lion to youth em­pow­ered busi­nesses over five years, in­clud­ing R1 bil­lion Gro-e Youth Scheme.

But to ben­e­fit from the pro­gramme, young en­trepreneurs be­tween the ages of 18 and 35 will first be put through their paces, which will start when they sub­mit their busi­ness plans.

“Of­ten the plans need to be worked on. In those in­stances, we re­fer en­trepreneurs to the NYDA or to the rel­e­vant busi­ness unit, where the plan is re­worked. From there, the busi­ness unit will look at the vi­a­bil­ity of the busi­ness,” said NYDA se­nior youth en­ter­prise spe­cial­ist Mzwa­bantu Nt­langeni who, with Van Vu­uren, has been em­ployed by the IDC to specif­i­cally work on de­vel­op­ing youth en­ter­prises.

The IDC also of­fers var­i­ous in­tern­ships and learn­er­ships to young peo­ple.

Bartlett stressed that, un­like banks look­ing to make a profit, as a de­vel­op­men­tal fi­nance in­sti­tu­tion, the IDC was com­mit­ted to grow­ing busi­nesses to stim­u­late the econ­omy. The ben­e­fits of this in­clude a low in­ter­est rate on the loans, and the fact that start-ups need not have as much col­lat­eral or the type of col­lat­eral banks re­quire.

He also touched on a pat­tern of young peo­ple whose hearts were not nec­es­sar­ily into en­trepreneur­ship but who were co­erced into it by their cir­cum­stances. For­tu­nately for them and oth­ers look­ing to run their own busi­nesses, South Africa finds it­self in an en­vi­ron­ment with many gaps in the mar­ket that are wait­ing to be filled.

Van Vu­uren had some tips for those who are think­ing of do­ing their own thing.

“The drought we are bat­tling at the mo­ment has brought about the ques­tion of food se­cu­rity. There is a chance for se­ri­ous in­no­va­tion there in terms of tun­nel farm­ing and sim­i­lar projects,” he said.

“The en­ergy cri­sis has started a con­ver­sa­tion around re­new­able en­ergy, and that will re­main an area that de­mands in­no­va­tion as well. Of course, in terms of re­new­able en­ergy, there are some chal­lenges by way of bar­ri­ers to en­try. En­trepreneurs may have to team up with big­ger firms, but that can be valu­able for both par­ties.”

Van Vu­uren said an im­por­tant thing for bud­ding en­trepreneurs to al­ways re­mem­ber was the prin­ci­ple of sup­ply and de­mand. If you can find a gap in the mar­ket, your idea is likely to be suc­cess­ful.

Nt­langeni high­lighted one of his favourite suc­cess sto­ries funded by the IDC, which shows how spot­ting a gap in the mar­ket can lead to great things. “A young man from the Flagstaff area in the East­ern Cape started a brick-mak­ing com­pany. Be­cause the area is so ru­ral, pre­vi­ously the bricks would have to be pur­chased from as far away as Dur­ban,” he said.

So­lathiso Sot­shon­gaye (28), a pre­vi­ously un­em­ployed grad­u­ate, now sup­plies bricks to hard­ware stores in the area af­ter he was given R1.8 mil­lion in fund­ing from the IDC.

“His busi­ness has just past the three-year mark, which is big be­cause many young start-ups fail to make it that long,” said Nt­langeni.

Van Vu­uren added: “The im­por­tant thing that peo­ple need to know – be­cause pre­vi­ously there was a per­cep­tion that this was not the case – is that the IDC is open for busi­ness, par­tic­u­larly from youth en­ter­prises. The IDC is also com­mit­ted to work­ing with young en­trepreneurs to de­velop their ideas.”

This se­ries is re­ported by City Press and spon­sored by the IDC

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