Cape Town — Being an entrepreneur in South Africa comes with its own challenges, none more so than for Nobesuthu Ndlovu. Ndlovu is the Chief Executive Officer (CEO) of SMEgo, a digital initiative aimed at empowering various Small and Medium-sized Enterprises (SME) with financial guidance to maximise financial output.
African Insider spoke exclusively to Nobesuthu on her career as an entrepreneur and financial advisor.
African Insider (A.I): Where did you grow up and what was your education
Please give me some background on where you grew up? (Include childhood, schooling, family, etc.)
Nobesuthu Ndlovu (NN): I grew up in Soweto (Orlando East), a daughter to an entrepreneur, my introduction to entrepreneurship was experienced through being a sales agent at the corner of bree taxi rank for my dad’s business during school holidays.
My parents were focused on a good education and ensured we went to good schools such as Parktown Girls High (where I matriculated) and I was funded by Desmond Tutu’s Educational Opportunities Council to study at UCT where I completed my B.Com (Information Systems) and later completed my Informatics honours at UJ. Im a mother to two lovely daughters, a life partner to my husband and in my spare time I teach yoga.
A.I: How did you get into the industry and what were some of the biggest challenges you faced?
N.N: I had aspirations of being my own boss and decided to study a post graduate diploma in business administration through GIBS to armour myself with the skills I thought I needed to start my own business.
In 2008, Post completion of this course I quit my job at one of the major banks, I started my own business which was a clothing boutique called Burgundy Fly, starting off with our first store in Soweto Maponya mall, growing to 6 stores in the Gauteng region, culminating to a store within a store partnership with The Foschini Group. The biggest challenges faced were:
· Obtaining funding – specifically the correct quantum at an affordable price.
· Growing my client base whilst maintain my costs – growing to 6 stores meant accessing a wider client base, but this also meant by costs grew 6 fold – my profits did not match this growth, resulting in a balance sheet that made it hard for funders to fund our growth
· Creating efficiencies in my business operations
Taking all of these lessons learnt over 14 years of running my own business, I am now applying everything I learnt in the real world of being an entrepreneur to my job as the Director of the SME business at Old Mutual Corporate – with the aim of being a corporation that truly makes meaningful impact in the growth and profitability of the SME sector.
A.I: What work does SMEgo do and how does it help growing SMEs and entrepreneurs?
N.N: SMEgo is a digital platform developed by Old Mutual available on both Website and Mobile Application channels. SMEgo is designed specifically to help SMEs to achieve business success by addressing their most pressing pain points. Its aim is to enable SMEs to run essential functions within their businesses and grow their profitability through a holistic SME proposition.
The online platform provides access to solutions that helps SMEs with financial decision making, reducing admin time, and getting paid quicker. It also gives SMEs access to other services such as business financing and loans to expand and run their operations.
A.I: What are the common misconceptions about financial freedom for SMEs and entrepreneurs in South Africa?
N.N: There are a few common misconceptions about financial freedom for SMEs and entrepreneurs in South Africa. The first is that entrepreneurship results in faster financial freedom.
A successful business takes a lot of time, sacrifice and dedication and it is not a straight line to success. Entrepreneurship can be rewarding but not without its own set of challenges, setbacks and sometimes prolonged period of no income.
The business’s revenue line item is not an entrepreneurs net worth. Many business owners still treat a business bank account as their personal transactional account. A business is meant to be a separate entity from which a business owner earns income from as part of the business’s operational expense.
The misconception here is that when the business starts making money, the business owner is financially free, or in common terms, “rich”.
The other misconception is that being a successful entrepreneur means the relaxing of financial planning with the assumption that business success means complete personal financial freedom.
Financial planning is imperative for retirement and family expenses and especially for the unknown such as disability, sickness and death. In the same breathe, planning for your business is equally important. Doing budgets, cash flow management and accurate reporting also helps entrepreneurs keep abreast of their businesses financial health.
A.I: What are the best methods for SMEs in South Africa to set and achieve financial freedom?
N.N: The first and most clear method is to set measurable and achievable financial goals for the business and themselves. Working on the business and not for the business allows for the opportunity to take a step back to understand what needs to be put in place to reach a certain level of revenue, and ultimately personal income.
This comes with understanding a business’s cashflow as a start. There are tools such as SMEgo that can assist in understanding cashflow in and cashflow out within a period to assist with financial planning.
Financial freedom comes from growing the business and growing the business usually requires accessing more buying customers while delivering exceptional value to customers. Leveraging a marketplace to penetrate new customers while utilising business automation tools results in more customers and improved customer experience and retention.
SMEgo aims to partner with businesses in this regard by offering automated business management tools and capabilities that expose businesses to more customers.
Financial freedom and growth of businesses requires capital that is put back into the business. Securing the right and suitable kind of funding for a business is key to growth and scale, ultimately resulting in financial breakthrough.
Finding the right funding is no easy task and solutions like SMEgo can assist with matching SMEs to multiple suitable funders through a single application, saving time and frustration.
Lastly the diversification of revenue streams can reduce the dependency of a single product and allow access to new markets thus mitigating risks associated with fluctuations of demand and economic versatility.
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Compiled by Matthew Petersen
