South African small business opportunities

The less we talk about 2016 the better.

It’s been a year, that we think in a decade or so from now, the world will look back on with feelings of intense guilt and shameful regret.

The world, according to CNN, Sky News and Zerohedge, seemed to have lost its collective marbles – while locally, every week felt a bit like an erotic dream in the warped mind of a war correspondent. You just could not have made this stuff up.
2017 – the morning after the night before

But 2016 is now over and having done the difficult task of reflecting on what was, it’s time to look forward towards the exciting potential opportunities that are presenting themselves to us in the brand new year ahead.

As you obviously know, it’s just not possible to predict the future – so we won’t be trying to attempt something as futile as that here, but what is possible is to identify certain trends that are happening on the horizon, which could well develop into interesting waves of opportunity for the agile, entrepreneurial, problem-solver.

But before we get into the cut-and-thrust of these specifics, it’s always useful to position our thinking in the broader context of where the country as a whole is most likely heading in 2017:

South Africa 2017

The economy:

After a sluggish 2016, StatsSA is anticipating South African GDP growth, in the formal sector, to tick up to 1% in 2017.

This is a welcome improvement from the pedestrian figures that depressed economists have been taunting each other with this year. This doesn’t mean that everyone can toss away the cheap JC Le Roux and crack open the Crystal instead, but it’s an improvement in the outlook at least.

Inflation is holding steady at around 6.5% and interest rates appear to have now hit their peak in the cycle and could well be set for a slow decline from here. According to reputable sources, the South African Rand is considered to be relatively undervalued when compared to other emerging market currencies – so 2017 could see our currency strengthen from where it is now, which is currently around R14 to the US$ (BTW – that is assuming that our beloved State President doesn’t have another ‘special idea‘ over the Christmas holidays when it comes to the future of our current finance minister).

Up until this point the infamous ‘credit ratings agencies’ have been fairly lenient with their all-important red pens, thanks to some good PR work by Pravin and his band of Treasury workers, however the whole story will be revisited in the new year. So prepare for a repeat of the media nervousness we endured in this regard.

Unemployment figures are still not looking good, now indicating a +25% unemployment rate, however the vibrancy of the undocumented informal economy of South Africa (which provides economic opportunity for many of the people the formal economy considers unemployable) is perhaps the saving grace of this worrying situation. It may well be time for us to expand our rather narrow framing of the term ‘job creation’ when it comes to this economic metric in the local context, to better reflect the true resilience of our economy that doesn’t necessarily conform to measurements thought up in the hallowed, wood-paneled hallways of Harvard Business School.

So, overall (based in this radically over-simplified analysis of the local economy) the outlook for the local economy is looking more positive for 2017.

Politics:

Before you write our crazy political context off as a basket case, perhaps challenge yourself to shift your perspective of what happened in 2016 just a bit.

Yes – the State President is a ‘questionable leader’ and generally it feels like the governing party would rather be hanging out in Vegas than doing any kind of useful work for people other than themselvse, but what is encouraging is the level to which the citizens of South Africa are speaking out publicly about their concerns and actively making an effort to show their displeasure with the current situation. This is an indication at least, that our democracy still works.

And make no mistake – government officials around the world are corrupt and more interested in their own personal gain than making sure that they do their jobs properly – so thankfully we are not alone in our frustration.

The positive news is that pressure is mounting on those in charge from active citizens and ultimately the painful lessons from the 2016 political experience will probably result in a better system in the future. It is however our responsibility to keep up that pressure in 2017.

In conclusion the outlook for 2017 is more of the same. More disruption, more scandal, more capture, more unrest, more…more…more…

Society:

As bad as things may seem – the fact is that progress is still happening and things are actually getting better.

More people in South Africa have access to electricity and clean water than ever before and that trend is set to continue. More children have access to and are enrolled in school than ever before – and that encouraging statistic is improving year after year. Yes – our education system has profound challenges and will require a complete systemic overhaul to get right, but we need to recognise some positive signs within the mess.

Government’s roll out of its HIV / AIDS prevention and treatment campaign is working and as a result of these improvements the country continues to improve its ranking on the Global Competitiveness list.

screen-shot-2016-12-24-at-1-35-53-pmTelecommunication costs continue to fall and the roll out of affordable, high-speed, broadband Internet access is ongoing. Our financial institutions are still regarded as some of the best in the world, we have a robust and effect constitution; and despite the general doom and gloom – South Africans themselves are a positive and resilient bunch.

Regardless of what the media would have you believe, the vast majority of South Africans of all races do not hate each other. In fact in a recently released report by the South African Institute for Race Relations – only 4.7% of all respondents indicated that racism was a concern for them in South Africa. BTW – the most pressing problem was unemployment.

These improvements will continue in 2017.

The environment:

The drought was a big issue in 2016 and with Level 3 water restrictions in Cape Town this summer, it’s an issue which will continue to be a rising concern next year.

Climate change has had – and will continue to have – a dramatic effect on the country and the demand for scarce resources like water will only escalate further from here as South Africa continues to be the preferred destination for African migration, while at the same time our cities experience increasing levels of internal urbanisation.

Our urban infrastructure is ill-equipped to handle the predicted future increases in human population. Stories like the recent Camps Bay sewage issue are just the beginning of escalating pressure on the environmental system as human populations continue to grow.

The good news is that the high profile nature of these environmental news stories does fire up the inherent ‘problem-solver’ nature in many South Africans.

When Eskom was kindly supplying the country with rolling blackouts and a load-shedding schedule, entrepreneurs did such a good job of supply generators, solar panels and power converters that the levels of electricity demand that existed before the crisis, have now permanently disappeared.

As a nation we are more than capable enough to resolve our issues. All it takes is a good reason to do so.
7 Trends to watch in 2017

So – on that point – what then are some of the opportunities in South Africa 2017 that are worth considering?

online-coursesBack to school – for everyone

Lifelong learning is nothing new, but in 2016 the trend felt like it picked up new urgency.

Perhaps it is the accelerated rate of change that the world is undergoing, or maybe everyone just remembered how much fun learning new things can be, but re-education is going to be a big theme in 2017.

Whether it’s doing a short course through an operation like Getsmarter, learning how to code via an online school like Codecademy, signing up to participate in a global MOOC with thousands of other international learners or finally going back to university to do your masters degree – going back to school as an adult has never been cooler.

The opportunity here is multifaceted. There’s obviously a case for you to pursue your own active learning in 2017, but also an opportunity to share your knowledge with the rest of the world through channels like Medium, vlogging or jumping onto the re-emerging trend of podcasting.

An interesting insight in this regard [considering the general news flow of 2016] is that most of the world’s education has an overwhelming bias towards a western-centric perspective. You’ve heard of the term ‘decolonisation of education’? Well our feeling is that there is a big opportunity to start packaging lessons and theory from a uniquely African and South African perspective. Our way of solving problems and designing business models doesn’t exactly prescribe to the ‘Oxford-way’ of doing things. This kind of unique approach to knowledge is set to become more valuable as the world grapples to understand it’s diversity of cultures.

Of course, not all of this ‘learning’ needs to be done in a structured way. Attending conferences, challenging yourself to read more or simply travelling more consciously are all part of the move towards a world that is more curious about itself.

If there is just one takeaway from 2016 – it should be a realisation of how dangerous a lack of ongoing education (even for yourself) in the modern context really is.

south-africa-exports-of-animal-vegitable-fats-oils-forecast2. Africa to the world

With exchange rates fluctuating as they have been in 2016, many local entrepreneurs have done the maths and realised that keeping your expenses in Rands and earning your income in US Dollars is a lucrative strategy if financial viability is a priority.

Because of the recent weakness in the local currency, South African goods and services around the world have gained a good name for affordable quality – so positive product reputation is on your side as you seek to market your locally produced stuff abroad in 2017.

The big opportunity here is value-added processing and local brand building.

For too long, South African business has just stuck a bulk commodity into a container and shipped it abroad. The lack of confidence in our own ability to sell a finished, processed product to offshore markets has not served us well. 2017 is a good time to stop doing what we always have done and try something new.

So rather than opting for an easy business model of importing cheap furniture from Bali to sell to cash-strapped South African – rather focus your energies on reversing that flow.

There are countless opportunities to supply locally produced goods and services to international customers out there. It just takes a ‘lean startup’ mentality and a bit of imagination. Plus it’s in the interests of the country, as well as your own bottom line.

homesteading3. Off-grid living

As already mentioned – the drought, problems with Eskom, pressures on our infrastructure and questions about our general footprint on the Earth have lead to an increased awareness and desire for off-the-grid living options.

Perhaps you can afford to move to Noordehoek or are flexible enough to work remotely from Yserfontein, but developing and supplying products and services to households looking to reduce their reliance on dodgy, centralised, mainly state-run infrastructure…is growing.

From green building consultants and architects to entrepreneurs who sell greywater systems, recycling services, home farming kits, solar power roof tiles, worm farms and Bokashi kits – 2017 should see an accelerating demand for these existing products, as well as new inventions, that solve problems related to off-grid living.

the-banting-kitchen-014. The growing ‘we’ve-been-lied-to’ movement

The war against the scourge of consumerism will continue with reckless abandon in 2017.

People around the world are starting to realise that they are just debt slaves and that a disproportional amount of marketing is nothing more than industrial propaganda.

From growing movements which promote the non-use of shampoo to an alarming increase of scientific stories that link radically positive health effects with something as simple as improved gut health – it feels like the world is beginning to realise that marketers are incentivised to sell you stuff you probably didn’t really need in the first place.

For example, when Prof Tim Noakes started revving up his crusaded to save the world with the simple Banting diet a few years ago, what also emerged was a complex tale of how commercial interests overshadowed the truth of how poor health is caused and unnecessarily medicated by a variety of companies.

But how far does the rabbit hole really go?

Now there is a growing questioning of where products come from and whether or not they are necessary in the first place. It goes further than authenticity and transparency – this is a question of existence entirely.

Our sense is that these stories and the demand for holistic products that close the loop in the circular economy are going to be in high demand in 2017.

Just to focus on the issue of something like gut health and the opportunities this one movement offers the entrepreneur – kefir, bone marrow broth, probiotics, Kombucha, gluten-free anything, Banting products and the like will be experimented with and actively homemade by people who are cynical of big pharma’s lies and the general deceit of the traditional Western medical industrial complex. Supporting and / or supplying to this growing movement is an exciting 2017 trend.

1573695155. Experiential tourism

As the world slowly starts to realise that doing a job you hate to buy stuff you don’t need is not a very sustainable way to approach life, the desire for real-life adventure tourism will far exceed supply. Linked with the previously mentioned trend, people are now choosing to spend their money on experiences rather than accumulating more stuff.

As the world’s most beautiful country – South Africa is very well placed to offer even more experiential tourism options in 2017.

The ABSA Cape Epic, the Comrades Marathon, the Two Oceans Marathon, the Otter Trail, the newly created Table Mountain mountain bike trails and numerous other adventure options are just the beginning of a enticing array of big and small experiential tourism options that can be offered here to international visitors. Clearly we’ve only begun to scratch the surface here and are miles behind places like New Zealand in this regard.

The opportunities here are endless and many of them involve the development of collaborative strategies to cross sell experiences. Examples of these kinds of approaches would be Route 66 in the US [which is essentially just a suggested route on a map] or Taiwan’s growing multi-day cycling adventures.

Our personal opinion is that the country as a whole can do a lot more to market these experiential products to a global audience curious about an African-flavoured adventure – as well as collaboratively package them better so that we retain even more spend per visitor. Obviously this is also a far more sustainable way of exploiting the country’s natural resources than digging a huge hole in the ground and effectively scaring the Earth for all eternity as a result.

news_30062013_thumbs_up_youth6. Youth quake

One of our biggest assets, is our youth. South Africa (along with the rest of Sub-Saharan Africa) is home to one of the most youthful populations on the planet. Unlike much of the western world, who have a bitter, angry, fearful, ageing population – we have a relatively young demographic, who are eager to earn money and get stuck into the opportunities that await them.

The problem is that we haven’t necessarily thought deeply enough about how we, as a country, are going to harness that opportunity. Our current education system is clearly failing the youth in a big way, but what this does mean is that something can be done about it by civil society.

What is needed is collective new thinking and new options for our young population, which will see the youth as something to be excited about, not a terrible problem to solve.

In the late, turbulent 1980’s – we participated in a program called Junior Achievement, which more than anything else, gave us a real appetite for entrepreneurial expression. Now more than ever, this kind of practical business program for young people presents wonderful opportunities for those wanting to make a useful contribution to our future society.

Entrepreneurs who are able to create the conditions under which the youth can put their considerable talents to good use – will be making a valuable contribution to the future of the country and harnessing one of our most valuable natural resources. Clearly the present thinking, leadership, structures and systems are not serving the youth well enough, but all is far from being lost.

action-projects20127. Project-preneurs

Last year, when we headed to Australia to do some work over there, we were stuck with how multidimensional South Africans are compared to their international counterparts. Because of this, we are uniquely positioned to participate in a range of small projects rather than just focussing on one, big, rigid idea at a time.

With the ever increasing capability of technology, like artificial intelligence, to assist with the project management and administration of a host of business functions these days – it makes sense that South Africans, in particular, will begin to create and operate a bouquet of projects at any one time, rather than hedge their bets just on one thing.

For too long the mantra has been focus, focus, focus. But we disagree. Our sense is that you need to focus on building a value platform..or a system if you like, which you can then plug your various project ideas into.

There has never been a better time to be a project-preneur than in 2017.

The recipe here is to…actively seek collaboration with others, stay open to opportunity, experiment with lots of ideas and reflect on what you have learnt from each one of the projects that you do.

Change is happening at an ever increasing rate – developing a agile, project-based mindset is a very good way to roll with it in 2017.

With the over-supply of far more specific trend reports for 2017 abound – we’ve purposely opted for a far more ‘general direction’ outlook for 2017 here. But our feeling is that these broad movements in the fabric of society do provide more than enough of a canvas for imaginative planning and ponder for the year ahead.

But just don’t ponder from too long.

Ideas are meaningless without the ‘doing’ that gets them going. Don’t worry about having the perfect approach. Fast prototype it, test it and refine it as you go along.