It is an uphill battle for young entrepreneurs in South Africa to be taken seriously and given a fair chance. Statistics show a decline in youth-owned businesses, and according to them, they face numerous challenges. June is Youth Month and Vutivi News spoke to some young entrepreneurs who operate in the innovation sector to get their take on their experiences. For these entrepreneurs, access to markets, the abuse of market dominance and being undervalued, are just some of the challenges they must endure.
Phadima Thobejane, who owns Life Key which is an online business that links small businesses to clients in the Tshwane area, told Vutivi News that one of the biggest obstacles he faced as a young person navigating the business world, was not being taken seriously because of his age. “Our ideas are undermined because of being young,” he said.“The impact this has is that when people see a young person starting a business, they are less likely to take risks in investing in our businesses, and as such our businesses won’t grow as they should.”
Thobejane also believes that venture capitalists who invest in small businesses should deploy professionals to help those businesses establish themselves. For Tumi Letsaba, who is the CEO of Progressive App Creations, the lack of access to markets is worsened by the fact that established businesses abuse their market dominance and stifle SMMEs in underserved communities. “Township-based businesses cannot reap the benefits of the township economy’s buying power because the well-established buyers enforce exclusivity clauses on manufacturers,” he said.
Building generational wealth through family businesses
Celebrating Five Years of Empowering SMMEs
An exclusive event for entrepreneurs
by Vutivi Business News
“I also believe that young entrepreneurs are not organised, and we as young entrepreneurs (must) get organised and move away from the mentality of doing things alone or as if we have everything figured out.” According to the Small Enterprise Development Agency’s latest statistics, SMME ownership between the ages of 15 and 34 decreased by 4.31% from the first quarter of 2020 (601,120 SMMEs) to the third quarter of the 2021 financial year (597,432).
SEDA said this drop was caused by the economy contracting, the loss of jobs due to Covid-19, and the July 2021 civil unrest in Gauteng and KwaZulu-Natal. “While 2022 started on solid footing, SMMEs will face renewed headwinds. This means that the focus of small businesses remains on survival (as) the most important challenge this year will come in the form of higher inflation,” it said.
