A dismal future for youth or an empowered alternative: Lessons from South Africa’s young entrepreneurs.

“Young, fiery, skilled and passionate aspiring entrepreneurs are choosing to leave the corporate and government jobs to start something more meaningful. “

Reshaping the Future

After more than 30 years as an entrepreneur and owner of multiple businesses, I can safely say that starting and owning a successful small business takes courage, resilience and skill. As the daughter of an entrepreneur with post-graduate training in business, all the cards have been in my favour and even so, the journey has not been an easy or straightforward one.

In South Africa, there is a desperate hope that small businesses will solve the ills of a struggling economy and magically create millions of youth jobs. Yet South Africa’s ease of doing business rating is 84 out of 190 countries, behind African leaders Mauritius, Kenya and Rwanda, and far behind leaders New Zealand, Singapore and Denmark. The fingers of organized corruption also reach deeply into the SOEs and many municipalities cutting off opportunities for all but the sly tenderpreneur.

This is not an easy environment for honest, hardworking entrepreneurs to start and grow businesses and yet there are hundreds of them building businesses in every corner of the country and across every sector. Young, fiery, skilled and passionate aspiring entrepreneurs are choosing to leave the corporate and government jobs to start something more meaningful. Intelligent, ambitious youth are jumping off the employment queue and seeking self-empowerment through business startups.

Given the challenges, how realistic are these dreams of success, one has to ask? Traditionally less than one in ten startups reach the ten-year mark, yet across South Africa, with the support of networks, coaches, corporate ESD funding and strength of character, success stories are springing up everywhere.

Take the case of 30-year-old former nurse, Benedicter Mhlongo, who began by growing vegetables at home and has leveraged his knowledge of sustainable, organic farming to help over 50 local producers set up in their own backyards, creches and care centres. Benica Projects, winner of the South African Climate Adaptation Support Program, is enabling subsistence farmers to scale into commercial ventures through his farming and business mentorship by providing easy-to-grow crops that meet market demand.

He solves their access to market challenges and also now provides tertiary training for agriculture students creating commercial revenue and a legacy impact in deep rural Mpumalanga. By seeking support from a professional growth accelerator he has fine-tuned the business model, improved his investment readiness score and is now poised for accelerated growth.

Another person that jumped out of the working world into entrepreneurship is Lethabo Mokoena who returned home after studying his BA Corporate Communications degree to find his friends unemployed, “I was uncomfortable with the fact that because I had graduated and I was working, suddenly people I grew up with, who were my friends, wanted to refer to me as ‘grootman’.”

Returning from work one day, Lethabo saw one of those friends cleaning his shoes – which was the inspiration that led him to launch Walk Fresh, a specialist sneaker-cleaning business. Business ventures require grit and determination – cash flow and access to market being familiar challenges for startups and this was no different. At one stage Lethabo even sold his furniture and jeans to pay salaries.

Luckily for Lethabo, he accessed the dedicated financial and non-financial support of the SAB Foundation Tholoana Programme which helped him to build critical business skills, and with his growth mindset and commitment, at 32, he now has stores from Sandton to Canal Walk.

Degree-holders eager to strike out into entrepreneurship often face resistance from parents who associate financial stability with traditional employment. The instruction to “Just get a job” is a familiar one. In Lethabo’s case, his parents were completely supportive. “The only issue was my mom explaining to her friends in the community why her son who is a graduate and had a job was suddenly cleaning sneakers. Otherwise, me and her were cool, it was her peers who could not understand.”

Others, like Nompumelelo Kubheka, 26, had a different experience. She chose to relocate from her rural environment in Mpumalanga to Cape Town where she could feel more supported – here she joined the FNB Youth Start-up Accelerator (FNBYSA) programme, a partnership with FNB and Fetola, which gave her the groundwork, the support of peers and the self-belief to build her business Unprecedented Green. Nompumelelo is part of a trend as more young South Africans are exploring professional entrepreneurship support as a route to personal empowerment and financial success, and interest in the youth accelerator has more than doubled from 4000 in 2022 to over 10,700 applicants in 2023.

Other participants on the FNBYSA programme speak enthusiastically of the benefits, such as being taken out of their comfort zone, access to a qualified peer network, plus the confidence that comes from a team that believes in them and provides them with the tools and mindset. “Your whole reality changes… embodying every value a businessman needs to remain afloat – to transform an individual into a businessman.” says Njabulo Cossa, an FNBYSA participant.

Research indicates that South Africa has a higher failure rate of SMMEs than elsewhere in the world (70-80% of our small businesses fail within 5 years) which means that whilst entrepreneurship is seen by many as a key lever to tackling poverty and unemployment, hope, willingness and ambition is not enough. Young people aspiring to launch into entrepreneurship need to be aware that this is not an easy path and have a strategy to overcome the high startup failure rate.

Data tracked by Fetola, a business development agency that has worked with over a thousand emerging entrepreneurs, shows that the optimum time for entrepreneurship is not straight out of school, but rather once crucial life experience has been gained. Between 30-35 years of age seems to be the mark where life experience and the courage to try something new align.

One such courageous entrepreneur has linked a clear market need with social impact ambition by capitalising on South Africa’s 70,000 shortage of ICT professionals. Thulisile Dlamini, 30, the founder of Ikusasa Technology Solutions sought out the critical support she needs from the FNB Social Entrepreneurship Impact Lab (SEILTM) in order to boost her business success.  Ikusasa’s focus is upskilling disadvantaged youth in remote areas of Limpopo and the North-West where fewer opportunities exist. Thulisile relates her own personal experiences to their challenges, “I studied in township schools, and had limited access to quality education and career guidance, the challenges I faced inspired me to make it easier for people to access quality education”.

The professional acceleration support of SEILTM has helped to grow the social enterprise from 75 learners in 2016 to 1700 in 2023, whilst her graduates are now more employable, lifting families and communities out of poverty.

The longer-term impact of quality business growth support means that high-potential young South Africans such as this can strengthen their business model, improve their leadership skills and enhance their investment readiness. This enables them to access growth finance and rapidly scale to become a significant, commercially viable force for good! The measure of a good business accelerator is their success after graduation – results that turn the failure statistics on their head and generate businesses that succeed, not fail.

If we reflect on what we know, it is this: South Africa has thousands of young people with the potential to start and grow successful enterprises and we need to do better in identifying those with the courage and resilience to bring these ideas to fruition. Then we need to do better in providing the right non-financial and financial support to help them succeed. So that they can experience the thrill, the empowerment and sense of dignity that successful entrepreneurship delivers.

About the Author:

Catherine Wijnberg is the CEO of Fetola, a leading provider of scalable, world-class entrepreneurial support programmes for African entrepreneurs. Helping people build businesses that last through scalable solutions that deliver social, environmental and economic impact. Fetola means “change” in Sesotho – and they aim to empower people by supporting the growth and development of sustainable, empowered and thriving small and medium enterprises (SMEs) at scale.

Thank you for reading this article. Catherine regularly write about small business development, sustainability and circularity, and has a passion for effecting scalable impact at the ecosystem level. To receive updates, please sign up here.