hr01 hr02
"An entrepreneur is someone who assumes the financial risk of beginning and managing a new venture or business"



Print this page

An entrepreneur is someone who assumes the financial risk of beginning and managing a new venture or business. The business can be based on a totally new idea, a new way of doing something, a new location, or attempting something no one else has done before.

Question is, are entrepreneurs born or made?

The debate still rages, but the some consensus say that successful entrepreneurs share a constellation of personality traits. In other words, some people are naturally more entrepreneurial than others. A common misconception about entrepreneurs is that they are wild risk-takers. Entrepreneurs do take risks, but only calculated ones.

Some of the main qualities entrepreneurs have are:

  1. A determination and the undying willingness to make a business venture a success.
  2. Perseverance – tough times never last, but tough people do.
  3. Never leting failure determine their life span.

The rest of the qualities necessary to being a successful entrepreneur you can learn through coaching and mentoring. One can learn how to do market research which is not necessarily a personality trait.

Some facts about the South African entrepreneurial environment

Yes the country needs entrepreneurs.

For instance, Statistics South Africa has revealed that, since 1994, South Africa has been faced with the challenges of re-integration into world markets as a global economy, while at the same time positioning itself to realise the high expectations of its populace regarding a successful transition towards a more democratic order.

To achieve the objectives of economic growth through competitiveness on the one hand, and employment generation and income redistribution as a result of this growth on the other, various strategies have been implemented to stimulate and support both micro, small and large businesses in South Africa. The growth and development of the micro-enterprise and small business sector is acknowledged by most interest groups and policymakers as being of critical importance to South Africa’s ability to address the serious problems of unemployment.

  • Entrepreneur equates to small or medium enterprises which account for 40 – 60 % of the South African Gross Domestic Product (GDP) and this equates to jobs, distribution of wealth, more companies and healthy economic growth.
  • Lack of management skills is the second largest reason for small business failure.
  • Currently small businesses are the fastest growing economic sector in South Africa and the largest job provider world wide.
  • Small business in South Africa operates in an economic environment built for big business thus
    75% of businesses that are incubated are successful.
  • Access to financial resources is the main stumbling block facing entrepreneurs.
  • About 80% of South African small or medium enterprises die or go out of business within the 1st year of operation and the reasons thereof range from lack of management skills, finance, mentoring, coaching, marketing and business development.
  • About 40 to 60% of South African small or medium enterprises will die in the 2nd year of operation with the reasons above still playing a major role.

Sustainabilitywhat keeps entrepreneurs alive is a serious issue for South Africa at the moment.

Support, mentoring, business development skills and training is not always there or is there at a cost.Free services that are available usually equate to bad services and those not free are at a cost that is sometimes too high for entrepreneurs. Government is trying to put some organizations like SEDA in place to help entrepreneurs.

There are some financial backers who sometimes make appalling demands on budding entrepreneurs.

The Idea - Every idea is not a guaranteed business and not all business starting ideas are good.

Having an idea means nothing without armunition.

Once you have a business idea, you need to evaluate whether it is something that can be done, before deciding which way to go. Ideas are usually borne out of a passion to provide a service or product to meet a particular need; having a particular talent, skill and/or interest in a specific field and identifying a gap in the market which you have the experience to fill. Is your idea unique, good to grow and can generate income or strong enough to out-compete current ideas? Think of a traffic light or “robot” as South Africans call it - that was someone else's idea then and still lives to this day. It is important to evaluate your idea …

Questions for evaluating your Idea

  • It is good and well to dream of designing a new airplane or come up with a new type of motor vehicle, but do you have the capacity and finance to build one? If not, do you believe that what you dream to do can be convincing enough for financiers to back you up with money for what you need to do to achieve your dreams. Ask yourself, why would an investor take such a risk in your idea – if it’s convincing enough, someone sure will, questions is how convincing is your idea?
  • Would it fill a need or close an identified gap in the market, is it something people would appreciate having? Think of the arrival of a cellphone and the internet.
  • Can it be done beautifully, can it outshine current or existing ideas, would you love working with or on it and would you love the outcome? I am sure when Bill Gates started Microsoft, he had this in mind and the proof is in the company’s success.
  • Your idea might not be new, if so, can yours be done differently so that it takes away the spotlight from the existing ones – think of how a new competing company that is introduced to the market and swiftly outshines the current market players. A good example is Google – the internet search company - with just a search engine, they have revolutionised how the internet is looked at better than the old America On Line (AOL), Microsoft’s MSN Hotmail and Yahoo combined. Why do you think one vehicle, or computer manufacturer is selling more and performing better than the others?
  • Can your idea receive the stamp of excellence and approval from the authorities? Unfortunately we live in a regulated environment. In your idea evaluation process, one might have to check with authorities like the South African Bureau of Standards (SABS) for its feasibility and acceptability. If one looks at many products in the market, they bear a sign or stamp of the regulatory authority in question. If you build or manufacture something, there are certain standards and rules to adhere to either for environmental, health or safety reasons to keep our world in order.

Tip - Most business people would advise you not to take a giant leap alone/unarmed; do your research, ask questions, dig up more, evaluate the feasibility of your idea and take calculated risks. Above all persevere and try to get away from negative people. Remember, you can only accept constructive criticism and not pessimism at this vulnerable point of life.


Distribution of at least one non-VAT registered business by industry in South Africa.
Source, Statistics SA

These facts suggest that if your idea is feasible, you have a better chance of receiving support, mentorship and requirements for your success. This also proves that, it is important for entrepreneurs to scan the environment where they plan to launch their idea so that one can identify sectors, changes in the economic environment and other factors that enable success of SMMEs in South Africa. The illustrations below shows in which industries do South African SMMEs (entrepreneurs) are operating.


bullet African Economic Research & Analysis
bullet Business in Africa
bullet Opinion & Analysis
bullet ICT Opinion & Analysis
bullet Weekend Sport
bullet Currency converter
bullet BEE in the Know
bullet Personal Financial Times
bullet Weather
bullet Blogs