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SUSTAINABILTIY OF SMME’s
Khalid Abdulla
CEO: Sekunjalo Investments Ltd
What is “sustainability”?
Two meanings:
– the financial viability (usual long term) of an activity
– environmental sustainability and 'green' issues
Focus of this conference: The financial viability of small, medium and
micro enterprises
“Living and working in ways that do not jeopardize our current
and future social, environmental and economic resources”
Utilize “alternative energy” to sustain our planet
Going “green” should be part of any business plan: Corporate,
Big, Medium, Small and Micro
Business's view of sustainability
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CASHFLOW - Cash is king.
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INNOVATION – Think “out of the box” even back to basics
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CONFIDENCE TO SUCCEED (You know how)
What is a “SMME”?
Micro, small and medium-sized enterprises are defined
according to:
A medium-sized - < 250 persons
- turnover < R50 million.
A small enterprise - < 50 persons
- turnover < R 10 million.
A micro-enterprise - < 10 persons
- turnover of upto R 2 million.
SMME Act (South Africa) cont.
• Small enterprise
- Formal and registered with fixed business premises.
- Mostly Owner managed
• Medium enterprise
- Also mainly owner managed
- Decentralized management structure.
Note:
Women represent approximately 56 percent
A journey into the world of business
• Are you doing what you are best at?
• Can you make the best decisions on a consistent basis?
Business is a field of opportunities
• But … you must work hard
• Be able to relate and work with others:
-One of the most important of all
Business is a major challenge.
- In order to succeed it takes unique thinking,
- hard work, and great people skills
- It’s an adventure
SA is an economy focused on Jobs
We need to focus on ways in which we can assist the the poor
We need Structural changes in the economy
• To create a world without poverty
• create a developmental economy
• Creating jobs:
Apply the basic’s
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Know your product / service
Know your market
Stick to your business plan
Employ people with the same energy / passion
Be a leader by example
Learn from the mistakes of the big guys
Think “out of the box”- INNOVATE
You know how - CONFIDENCE
Key Aspects for sustainable SMME’s
• Alignment with government policies
• Create jobs and the role of the DTI and IDC
• Work in partnership with:
- Government (especially local government)
- Private sector through Corporate enterprise development
• Improving access to finance
• Focus on poverty alleviation initiatives
• ‘new economy’ high growth sectors: Production, Tourism
(2010),IT, Basic service businesses
Key pillars of SMME’s
• Create motivated entrepreneurs
– learnerships for the youth
– special programmes to support women entrepreneurs
– promotion of entrepreneurial role models
• Unlock economic opportunities
– Public sector procurement programmes
– Support business linkage programmes with larger business enterprises
– Encouraging and supporting franchising
• Build capacity of entrepreneurs
– Improving access to technology
– Improving access to information: new media initiatives
– Improving access to finance
The building blocks
Why do we need SMME’s?
• South Africa Population growth / Youth
• Population (2010): Approx. 50 million
– Approx 30 to 40 percent are YOUTH
– Africa- An opportunity Awaiting
– 1 billion people 2010
- 14% of the world's population
Africa: Continent of Opportunities
• The African expected economic growth rate is at about 5.0%
for 2010 and 5.5% in 2011
• SA is the greatest contributor to Africa’s GDP
• SMME’s key to delivery
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2 billion people in 40 years (2050)– Opportunities for
SMME’s unlimited
• Approx. 600 million youth in the system
Out of my box …
• Success stories Amongst Other:
– Sekunjalo
– Capitec
From SMME to JSE
Sekunjalo in 1996
- Started very small
In 1998
- Raised only R250 K (from activists/friends/family/associates)
Fourteen years later …2010
The Sekunjalo Investment Group is a JSE listed , black owned, Controlled our
operations in fishing, healthcare, pharmaceuticals, information technology and
is a global strategic investments
The company now currently employs about 2 000 people
The Sekunjalo Story
Sekunjalo: Top Empowerment Company:
What makes us different?
- Sekunjalo positioned itself during the 1990’s for open partnership
- facilitated growth and success of first wave of BEE
Working together to achieve full potential
- Aligned itself to government policies and private sector (Partnerships)
- Enterprise Development Programmes
- Assisted SMME’s
- Skills transfer to create new SMME’s
- Direct Ownership
We always acknowledge our staff
“the success of Sekunjalo would not have been possible without the support of our
staff, key management and shareholders ..”
Sekunjalo: Giving back
The Art of Giving …
Socially Responsible since day 1 in 1996
• Bursaries for medical students (Raised R1,5 million), first time sponsor of black
artists (BASA award)
• Be “Green” as possible – The legacy
The Golden Rules …
Ethical and Moral Behaviour
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Transparent
Maintain high standard of business conduct
Fairness and honesty
Don’t tolerate corruption
Nelson Mandela paved the road to success
Madiba …
Inspiration
South Africa: The Success Story
The start of South Africa unlimited …
Sustainable business South Africa
Sustainable Stock Exchange:
• Biggest stock exchange in Africa
• Market capitalization - R5 to 6 trillion
• 20th largest in the world
Sustainable companies
• 400 listed companies
Large and successful Financial Sector: 20% of GDP
• Domestic banks: 35 (6 foreign owned, 15 branches of foreign banks)
• Reasonably Well developed micro finance and growing
Wisdom from Warren Buffet
• “I learned that the only way you are going to get anywhere in
life is to work hard at it. Whether you're a musician, a writer,
an athlete or a businessman, there is no getting around it. If
you do, you'll win - if you don't, you won't,” said Warren
Buffett.
• Another significant quality of a successful businessman is to
be able to see things that others cannot. “Businessmen are
simply those who understand that there is little difference
between obstacle and opportunity and are able to turn both
to their advantage”
World Cup 2010: We did it!
Thanks to SMME’s who “played” their part
The End
“Be not afraid of growing slowly,
be afraid only of standing still”
Chinese Proverb