80% of SA start-ups fail in first year

ALTHOUGH small businesses are seen as a catalyst for growth and development of South Africa’s economy, an estimated 80 percent of start-ups fail in the first year. This is according to Yolande Steyn, newly appointed head of FNB Innovation.

Steyn was speaking at a business breakfast in the CBD on Friday.

She said South African entrepreneurs required enabling platforms that would help them get going faster, grow quicker and operate more efficiently.

“Besides enabling simpler banking solutions for our customers, we also assist and ensure that entrepreneurs are well looked after.”

She said the bank had a number of unique business innovations available such as Business Directory, Instant Accounting, Instant Cash Flow and Instant Invoicing to help ease the administrative burden and maximise the success for entrepreneurs.

“Its all about helping entrepreneurs get started, save costs and ultimately help them grow. FNB’s customers are at the heart of why we innovate, and our innovation strategy is focused on creating meaningful innovative products and services for all our customers.”

Steyn said one way that the bank enabled innovation was through its innovators programme that had rewarded staff with over R42 million in prizes since its inception in 2004.

“Our involvement in the various programmes provides us with the opportunity to give entrepreneurs a head start in their business journey. Staying resilient through these economic times should be a key focus for all entrepreneurs and business owners. By encouraging and adapting to new technologies we can all make a difference.”

Kobus Engelbrecht, spokesman for the Entrepreneur of the Year competition sponsored by Sanlam and Business Partners, said entrepreneurial intentions among South Africans has dropped by almost 30 percent last year, compared to 2013 and almost halved when compared to 2010.

This is according to the Global Entrepreneurship Monitor South African Report 2015/16.

The report showed that the perception about entrepreneurship in South Africa had increased since 2009, with 40.9 percent of South African adults last year perceiving good entrepreneurial opportunities while those who believed they had the necessary skills knowledge and experience to start a business also increased to 45.4 percent, up from 42.7 percent in 2013 and 35.5 percent in 2009.

Engelbrecht said despite these positive indicators, the figures hadn’t translated into higher entrepreneurial intention figures which declined from 19.6 percent in 2010 to 10.9 percent last year.

“This ultimately means that 1 in 10 South African adults currently have entrepreneurial intentions.”