What The Budget Speech Means for South African Businesses

Lisa Illingworth, founder, and CEO of FutureProof SA
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“We all know that launching a business is tough. Growing great businesses is even tougher. One thing most entrepreneurs agree on is that a bit more government assistance would be appreciated – less red tape, more support in getting paid on time… the list goes on” says Lisa Illingworth, founder, and CEO of FutureProof SA

FutureProof teaches children as young as 8 years old the art of entrepreneurship. Their innovative program forms part of various school curriculums but can also be undertaken outside the classroom. “At Futureproof SA, we believe that South Africa is in an educational crisis. In medical terms, we can either go towards a solution or towards death. Our education system is becoming more and more irrelevant, and our students need a skill set that will help them create a space for themselves, instead of going towards and finding diminishing spaces in this economic environment”.

But how does this relate to South Africa’s macro and microeconomic environment? We can’t ignore the realities of where we all find ourselves. That said, we also need to look beyond current circumstances for our solution.

“Our goal is to reach 6 000 kids across South Africa in the next 18 months, and through that to launch 240 businesses. This requires 80% of the people in our programmes to show behavioral change and start sustainable businesses,” explains Illingworth.

We can’t do that without an expansive mindset. “Winning – especially in an economy that is only predicted to grow by 0.9% this year, and an average of 1% for the next three years – will only be realized if the need for achievement is strong enough in our budding entrepreneurs”.  

Setting entrepreneurs up to win

The 2020 Budget Speech supports the idea that start-ups will ignite the economy. The tax system supports these businesses in a number of ways, including the preferential small business tax regime, the VAT registration threshold, and the turnover tax. “According to Minister of Finance, Tito Mboweni, these will be reviewed to improve their effectiveness, while at the same time reducing the scope for fraud and abuse,” she explains.

Recognising the role of start-ups and small businesses in growing South Africa’s economy is important – but it’s also not enough.

“Consider the fact that Mr. Mboweni also gave us these stats: 8.2 million young people between the ages of 15 and 34 are not in education, employment or training. This means that raising skills and improving the matching of young people and jobs is an important focus of the Presidential Youth Employment Intervention. All fine and well, but as we’ve seen, our education system isn’t providing our youth with the skills they need for a brave new world”.

We would argue that the right mindset is even more important than the right skills (or ideally, a pairing of both).

As a nation, we need to focus on building mindsets that set entrepreneurs up to win. The ‘need to achieve’ is one of the core characteristics shared by successful entrepreneurs around the world, not just in South Africa.

The difference is that we are experiencing a slow growth rate, as well as severe social and economic challenges that we simply cannot wait for government to solve for us. We need to take control of our own futures. We need to build a winning mindset.

4 ways to build a winning mindset
1. Build your grit

“Talent will only take you so far. Grit allows you to push through insurmountable challenges, and come out the other side having learned valuable lessons that you can implement in both life and your business” says Illingworth.

Angela Duckworth, the author of the bestselling book, Grit: The Power of Passion and Perseverance, defines grit as the combination of passion and perseverance for a unique, long-term goal. Grit is measurable and can be improved – we can work at it. Anyone can embrace it. And when we do, we achieve the impossible.

2. Take small steps to reach big goals

We know that Rome wasn’t built in a day. Great businesses are the same. We don’t reach big goals with giant leaps. We reach them with small, consistent steps. Break each big goal up into smaller, achievable goals. “Give yourself credit for the small wins. Celebrate them. And watch how they build momentum towards achieving your big, hairy, audacious goals”.

3. Take action

Building a business is a strange mix of patience and action. You can’t wait for someone to solve a problem for you or seize that opportunity. You need to make decisions and run with them. Inaction can kill a business. At the same time, you need to give your ideas and your business the space to grow. Lay the right foundations, keep upskilling yourself and your team, embrace a growth mindset, but don’t rush. Most overnight successes were ten years in the making and built on very solid foundations, systems, and processes.

4. Develop your winning mindset

“Most of us aren’t born with a winning mindset. We develop them. We work on them. We grow the skills we need to be able to see our vision through. Failure, self-doubt and negative opinions are normal. But they can be overcome. This takes confidence and positivity, which means what you read, watch and fill your mind with matters. If you want to have a positive outlook on life, you need to feed your mind with positive and successful thoughts. You need to be willing to go the extra mile. Winners don’t quit when something doesn’t work. They try something else. They learn from their mistakes. Most importantly, they don’t wait for someone else to solve their problems”.

Let’s make a change, together

It’s positive that government is recognizing that small businesses need more support in South Africa. For example, BIZPortal is being launched to provide a streamlined way to register a new business with the CIPC, SARS, the UIF and the Compensation Fund in one day.

In addition, the Competition Amendment Act came into force in July 2019, strengthening the Competition Commission’s powers. The Commission has conducted inquiries into a number of sectors to strengthen competition, which should benefit smaller businesses against larger enterprises.

“Ultimately, however, it’s up to us. We can’t wait for the economy to improve, or education to be fixed. We can’t wait for millions of jobs to be created for us. We need to act. We need to embrace what we are capable of, creating the future we deserve. A future where our youth can flourish”.