This blog post is long overdue..Apologies for the delay, but I have literally chained myself to my desk until I got this post out!
Over the past two years I have had my sleeves pulled up and entrenched myself deep within the startup arena here in South Africa. With scarce personal financial resources (like most young entrepreneurs) I went about locating and exhausting all possible entrepreneur support initiatives on offer – the government being an obvious component here.
At first I went through ALL government funding and resource initiatives: There’s loads out there, but, as we all know, dealing with the government is a long, slow and mind-numbering experience..And at the end of each meeting, I got into my car telling myself that there is a minor chance that the person I spoke to will actually follow up on my application. (This assumption turned out to be fairly accurate!).
- Get the direct contact (usually only e-mail) of the consultant/individual that you are dealing with and liaise directly with them – try minimize the chance of the paperwork being misplaced!
- Find out what work ‘they’ need to do for the application process, and do as much of it as possible
- Inflate their egos, they’re working for government with minimal incentives and job stimulation – any form of affirmation goes a long way
Without harping on the negative…There is one particular funding initiative that I would like to talk about: Umsobomvu Youth Fund, and more importantly, it’s voucher program.
Unfortunately, while I was going through their program (successfully), they had to stop the issuance of vouchers due to mismanagement and fraud.They ran out of money.
What I would like to elaborate on is how the voucher program worked and why I think it was a great idea, so here it is:
- Submit business idea and information on yourself and your business partner.
- If they deem you have the capability and drive to make the venture a success you are awarded your first voucher (which has to be a feasibility study). You can only go through the program once, and make use of four of the available vouches, including the feasibility study. These vouchers range in value, from R2 000 to R15 000, but they all only cost you (the entrepreneur) R200..The rest is subsidized by the government. So already, you are getting financial leverage!
- You then get a list of several service providers, who you interview/check out before awarding them the voucher to use their services (remembering that you only paid R200 but they are getting paid the full value of the voucher). And yes, they are B and C grade service providers, however, and this is what I found most useful – you can work this as though you were employing them. For instance, if you have a general idea of your market you can tell them what information you require and they will use their resources and time to get the relevant information.
- Repeat this process with your remaining vouchers – at the end of this, you should have more concise businessplan as well as structures in place to operate a more professional business.
So what made this a good initiative?
It was designed for the masses, underprivileged youth who have limited financial resources and education. But you could still extract value from the service providers at a highly subsidized fee and make use of the financial and time leverage it offered you whilst still getting good work done, especially if you guide the service providers along the way!