To help develop small, medium-sized and microenterprises (SMMEs) in South Africa, project delivery and engineering consultancy WorleyParsons South Africa held its Supplier Grow Conference at its offices in Melrose Arch, Johannesburg, earlier this month.

WorleyParsons South Africa CEO Denver Dreyer highlighted in his opening speech that South Africa was in a state of constant change, which created new opportunities as well as new threats. However, he asserted that it was through dialogue, collaboration and an African sense of community that “we could develop something different for our [suppliers] and for us as a community”.

He said responding to the challenges of South Africa as a community was important, as it fostered a behaviour of collaboration, which enabled South Africans to achieve various outcomes every day. “We do it in our boardrooms, meetings and shift meetings 2 000 m underground; we do it in our off-shore platforms, and on our infrastructure projects. We collaborate within the communities of our teams and it is through that collaboration that you make progress.”

However, Dreyer noted that collaboration was not enough without candid conversations to ensure that SMMEs and larger companies voice their different challenges.

“Through dialogue, collaboration and community, we can find a common way forward, which is the aim of today – to help our suppliers drop the barriers to entry, to become prosperous and to achieve the outcome that our government and out country have set, [namely] inclusiveness in our economy,” he said.

Internationally acclaimed public speaker and private-equity firm Watermark Afrika Fund CEO Vusi Thembekwayo discussed the myriad of challenges facing entrepreneurs in South Africa.

He highlighted that the local economy was in a technical recession, adding that the economy was, “at best”, on a 0.5% growth path for the next three years. Further, Thembekwayo noted that unemployment among South Africa’s youth aged between 16 and 35 had risen to just above 47%.

However, despite the significant challenges, he asserted that South Africa was “easily a 5% growth economy” and that entrepreneurs had a “greater social responsibility” to use their businesses to transform the challenging environment. “As entrepreneurs, we should ask ourselves what role [we] really play in contributing to [our] country and in helping [our] country transform.”

Some of the most significant challenges faced by entrepreneurs were increasing the scale and growth of their operations, which Thembekwayo said could be mitigated by collaborating with partners who had different competences and expertise.

He pointed out that entrepreneurs often performed all the business functions when first starting out, which could constrain the scale of the business. It was, therefore, important for entrepreneurs to professionalise the business and employ other people to perform certain business functions.

Further, Thembekwayo said that “entrepreneurs are almost always tax-noncompliant”, not because of any incompetence but because their primary focus was to keep the business financially afloat. This often resulted in small businesses missing out on lucrative business opportunities with large companies that had strict compliance requirements.

He highlighted that current tax regimes inhibited the growth of small business and suggested that a different regime be developed for businesses with a turnover of less than R50-million, which would significantly improve the cash flow of small business.

Thembekwayo added that the small business sector was not growing because capital was being used inefficiently to “service . . . State obligations” rather than for productive assets that would help generate greater profit margins.

“The only way we can fix this is if entrepreneurs come together and speak [with] a single voice,” he asserted.

Thembekwayo suggested that entrepreneurs focus on collaborating and working with partners to scale and grow their businesses; this would extend not only their capacity –accelerating business growth – but also their learning.

“Having a capacity partner changes the game. It not only increases capacity but also enables entrepreneurs to play at a completely different level [to] the people . . . they are traditionally competing with.”

Thembekwayo also advised that entrepreneurs take care when they develop a business culture. “The very first and most important part of building that culture is realising that it is not something you write down but something that you live every day.”