The Unintended Consequences of the World Cup

  -  by Allon Raiz, May 2010

Every week – to judge by the emails I receive - I am both the luckiest and the unluckiest man alive. Every week I am notified that I have won tens of millions of dollars from lotteries all over the world, while other people trust me so much they want to give me 10% of their ill-gotten monies if I assist them to transfer these monies to my account. All I have to do is give them my account details. On the counter side, there was a vicious rumour being spread about me that I needed a penis extension. Email after email sends me details of how to go about ensuring a more pronounced manhood.

Since I installed my spam filter, I no longer get these emails. I sometimes even test my filters by sending an email to myself with the heading, “You have won the lottery”. It never arrives in my Inbox. My spam filters send it straight to the Junk Mail Folder.

I still sift through my Junk Mail before I delete it because I invariably find an innocent -and often important - email that has been regarded as spam by the filters. I nearly lost a big deal because of a misallocated email and so now I scan the junk mail for real emails.

The unintended consequence of spam filters is the occasional lost email. Sometimes these lost emails are innocuous; sometimes they are life-changing. Everything has unintended consequences. Sifting through my Junk Mail, and finding a significant mail, got me thinking about the notion of unintended consequences. What, I wonder, will be the unintended consequences of the World Cup?

I don’t want to be a party pooper and I certainly cannot deny that the World Cup will have a tremendously positive effect on business in South Africa. However, I cannot help but caution that the event may very well have unintended consequences on small business in South Africa.

Just this morning I heard a caller on radio suggest that Friday, 11 June be declared a public holiday. I get the excitement and I too love the display of pride and patriotism that seems evident on the roads at the moment. But everything has unintended consequences. I spend so much time watching how entrepreneurs struggle to keep it together during ‘ordinary’ times, that I feel duty-bound to at least highlight the possible unintended consequences of the upcoming tournament.

I predict that many small businesses, particularly those that are marginal, or in an early stage of growth will close down because of this event. These businesses will not be able to absorb the loss of productivity and income that will result from employees that are absent, hung-over or uninterested in work. Orders will not be signed, meetings will be cancelled and deadlines will pass because clients, too, will be absent, hung-over or uninterested.

The butterfly effect is an eloquent metaphor, used in Chaos Theory, to explain the interdependence of conditions. According to the theory, the butterfly flapping its wings, in Johannesburg, could cause an earthquake in China. A volcano in Iceland effectively shut down air traffic in Europe. The after-effects are still being felt, weeks after the event. The “unintended consequence” of a volcano in Iceland, some 1,800 km from London, will have an effect on the British jet fuel industry, the hotel industry and countless others, some for the better but mostly for the worse.

So what can small businesses do to ensure that we do not land up as a casualty? Build up appropriate reserves of stock, leave time and cash. If you are dependent on suppliers, make sure that they are on track to deliver to you. If you have orders to fulfill, make sure your staff are on board. In this regard, communication is key: ensure that your team understand the rules during this time. Create fair policies that work for everyone but that do not put your business in jeopardy. Incorporate the event: Use games as team building exercises. Finally, despite all the hype and euphoria, plan for the worst: find alternatives and build backup plans now.

On the 15th of May 2004, the butterfly flapped its wings in Zurich: Sepp Blatter announced to the world that South Africa would host the 2010 World Cup. Small businesses must plan well to ensure that the unintended consequence does not include filing for bankruptcy.

Allon Raiz is the founder and CEO of Raizcorp, the only privately-held, unfunded, profitable business incubator on the African continent, supporting in excess of 200 businesses. Allon is a World Economic Forum Young Global Leader and sits on the board of the NEF (National Empowerment Fund).

Raizcorp
Tel:  +27 11 566 2000
www.raizcorp.co.za
Nedbank Talks Procurement


What is Nedbank's view on Enterprise Development and what it means for the South African economy?

Nedbank remains committed to supporting entrepreneurs and enterprises. We understand that as the people of South Africa are diverse and expand across different cultures, so too is the business environment diverse and different in the make-up and the needs. We also understand that through Enterprise Development, entrepreneurs and enterprises can be nurtured to become key contributors to the economy.

What are some of the various Enterprise Development projects that Nedbank are involved in?

Nedbank has a multi-faceted approach to Enterprise Development support that entails access to finance and non-financial support such as mentorship, specialist advisory and assistance with business tools. This may be facilitated through job creation initiatives, Incubators and specific Enterprise Development programmes.


Why did Nedbank choose the Raizcorp programme as part of their Enterprise Development?

The range of services and support offered by Raizcorp empowers the entrepreneur with vital acumen and skills.

Having met your Raizcorp beneficiaries, what is your take on them?

We keenly track their growth and development every month and have great aspirations to seeing them become big players in the economy.

What are you hoping the outcome will be from this programme?

To have 12 profitable businesses, managed by entrepreneurs that are well-versed with business savvy and techniques to grow from strength to strength.

What has your experience with Raizcorp been like thus far?

Raizcorp has a fantastic vibe and the spirit of entrepreneurship is tangible and alive with possibility!


How does Nedbank see their role in assisting entrepreneurs in South Africa?

The challenges facing enterprises and entrepreneurs are many. It is therefore crucial for all key stakeholders and role-players to provide that enabling platform for entrepreneurial growth. Nedbank has demonstrated this through our differentiated Enterprise Development offering.

What do you feel has been some of Nedbank's biggest successes in terms of Enterprise Development?

Critical to all Nedbank’s Enterprise Development interventions is the ability to maintain ongoing sustainability. The assistance extended to businesses are sensibly structured, well thought through and designed to enable growth. This has been used as the basis for Enterprise Development interventions extending to job creation initiatives, incubators, programmes as well as to supporting industry specific businesses.

Interview:  Zanele Matome from Basadi Development Agency

Ntombizanele Matome is a Raizcorp Enterprise Development beneficiary.  She has completed the Pre-Prosperator programme and has just begun her first year on the Comprehensive Enterprise Development Programme.  She is on the programme thanks to the wonderful support of Shaft Sinkers, who have chosen Raizcorp as a provider for their Enterprise Development needs.  Zanele spoke to us about her journey as the only black, female-owned Shot Crete Company in South Africa.

What service is it exactly that your company is going to be offering?

I am going to be offering underground safety applications to the mines.  I will be doing this in the form of Wet Crete and Thin Skin Liner applications. This is the process of spraying concrete with admixtures in order to stabilise the rocks. These applications help to preserve the lives of miners underground. 

What made you decide that this was what you wanted to do?

I grew up in the mining community in Rustenburg and it has always been my passion to eventually work in the industry.  With mining being a capital intensive industry, I decided that I should focus on the secondary support services because of its low barriers to entry.  I also realised that I could form a niche market since there are no female-owned companies in the country who provide this service.

How did you end up at Raizcorp?

I looked at various mine contracting companies, specifically those who were market leaders.  Shaft Sinkers came up as a worldwide leader.  My vision was to be a sub-contractor to them so that I could learn from the best.  I then secured an appointment with Shaft Sinkers to present my company and my business idea and to ask for sub-contracting opportunites in their underground operations. In the meeting I told them that I was new in the industry and that I was not quite sure where to start or how to begin with my vision.  After many meetings, they decided that they wanted to take me on board and develop my company so that I could be better equipped to become a service provider to them.  They then decided to sponsor me on the Raizcorp Enterprise Development programme. Here I would learn all the aspects of running a profitable and sustainable enterprise.  I started on the programme in October 2009 and have learnt a great deal about business process and compliance.  The skills which I am learning from Raizcorp will equip me to write a Business Plan (or ‘business Think as Raizcorp calls it), a marketing plan and to understand the financial aspects of running a company.  The Raizcorp programme also gives me the confidence I need to venture out on my own and continue with my vision.  Raizcorp has helped me to “raiz” my bar.  I have just completed the Pre-Propserator programme, which I did as I am a start up business as opposed to an existing business.  Now that I have graduated, I will move on to the full 1st year of the CED programme thanks to the continued support and sponsorship of Shaft Sinkers.

What are you finding most difficult about your chosen industry?

The industry is currently male-dominated, so potential clients find it difficult to trust a women -owned company with a contract.  I find that people initially don’t take me seriously, however, once I start talking and they realise that I do know what I am talking about, their perceptions do start to change. 

Besides the sponsorship on the Raizcorp Enterprise Development Programme, how else has Shaft Sinkers been of assistance?

They have assisted by linking me up with industry experts in order to gain more info on the industry and also by inviting me to join them in one of their underground operations where I was able to witness the entire production process from start to finish.  They are also playing an active mentorship role and are genuinely interested in my progress.  I value the fact that they are not just a money sponsor but an active sponsor.  It helps when the companies involved in ED do more than just pay lip service to BEE.  And the great thing about Shaft Sinkers is that the involvement and active support actually comes from Senior Management.

What has been the most exciting aspect of starting up this business and what prospects do you have so far in terms of business / projects?

The most exciting part was when I was doing research, visiting equipment suppliers, going onto sight to see the actual production process and also meeting with competitors.  It was exciting because it gave me a broader overview of the industry and it also confirmed for me that I am in the right place.  I have been privileged to be able to gain knowledge from industry experts.  This is the kind of knowledge that you can’t find on Google.  Shaft Sinkers has said that, should the opportunity present itself, they would give me the opportunity to prove myself with 1 sub-contracting project. I am also currently looking at various joint venture opportunities with established companies. 

As a woman in a male dominated industry, and specifically as a start-up business, do you think that you will be able to manage teams underground?  Also, how hands-on would you try and be?

My strategy now is to take my team on training and to also be in this training with them in order to gain knowledge and know-how with regards to the technical side of the business.  On my first project I will ensure that I am underground at least 3 times week and that I am working with them doing everything, from the general worker duties up to the supervisor duties.  The experience which I will be gaining from this will be to my advantage because I will be better equipped to manage people if I have the skill and if I know what I am talking about.  I believe my team will accept me as a boss if I have this know-how.

Final thoughts or comments with regards to your journey so far

My journey has been difficult and exciting at the same time.  The hard part was the lack of funds and transport which I needed in order to do all the running around.  I don’t have a car at the moment and have had to rely on taxis to go to meetings.  I needed a great deal of petty cash for transport.  I used to bake biscuits early in the morning and went to sell them at schools in the morning for money for the transport and airtime.  The road is now starting to clear and there is light at the end of the tunnel.  With the success, that I am sure is heading my way, I would like to give back to my community and inspire other would-be entrepreneurs.  I want people to know that if you want something you need to work hard at it, pray a lot and stay humble.

I want to start a social responsibility initiative based around the education of the African child.  It will start small and as my business grows so will I be able to do more for this initiative.  It is all about providing schools in different areas with what they need in order to learn.


Interview:  Lucia Molefe from Mokgalaka Creations and Projects

Mokgalaka Creations and Projects is a 2nd year Enterprise Development beneficiary company on the Raizcorp Comprehensive Enterprise Development Programme.  Lucia gave us some insight into what the entrepreneurial journey has been like for her.


Born in Limpopo, Lucia was the eldest of five, with four younger brothers.  She initially grew up in Tembisa, but once the time came for her to attend high school, she went back to Limpopo to attend boarding school.  After matriculating in 1988, she went on to complete a BA in Social Work at the University of the North.


Lucia started her career with the Department of Social Development.  She spent 15 years with the Department as a social worker.  She enjoyed her work and loved to help people and deal with social problems.  Her decision to eventually resign in 2008 was based upon the fact that she felt that she had reached a ceiling in terms of her career within the Department.  Another deciding factor was salary.  As a result, she realised that she would need to look at what to do in order to secure a better future for herself.


Just before resigning, Lucia had worked on a project with an NGO where they had to create flowers from icing sugar.  Her interest was immediate and it grew by the day.  She realised that she could create the most wonderful things with her hands.  She started attending evening classes and learnt everything she could about cake decoration.  The first cake which she created was for her parents’ anniversary. People soon started taking an interest and slowly began placing orders.  Once she decided to resign, there was no question as to what business she would venture into.


Lucia has found that a lack of resources has been her biggest stumbling block in trying to build her business.  She does not yet have the correct equipment needed in order to produce large orders with a quick turnaround time.

There are also various marketing avenues which she would like to pursue, but can’t because of a lack of funds.  Her dream is to exhibit at the Wedding Expo as she feels that this would give her access to a ready and willing market.
Lucia is helping to create employment, albeit part-time, for 2 people.  She is in the process of training them in how to create the icing flowers for her creations.




Lucia came to Raizcorp by way of the Soweto Business Guide.  She decided to join the programme because of the learning which was on offer, as she felt that this was more practical than attending 1-day, once-off workshops which try and tell you everything about business in a few hours.  She felt that she would gain more by being on the 1 year programme.


Lucia felt that she needed to understand the language of business.  She says that Raizcorp has helped her tremendously.  Raizcorp offers a personal development course called “Who Am I?” which Lucia says was an absolute eye-opener for her. She grew up in a situation where you were groomed not to stand up for yourself, and where you were not allowed to have an opinion. This course helped her to realise that she needed to take responsibility for herself.




Through her time at Raizcorp she has also realised that she contributed to the fact that people took advantage of her.  She learnt how to say no.  Lucia has also realised that her business, or in fact any business, cannot survive without sales and she is now all about sell, sell, sell and it is making a visible difference.


Lucia has just recently begun with the second year of the Raizcorp Comprehensive Enterprise Development Programme.  She decided that a second year would be beneficial as she feels that she still has a great deal to learn about business, particularly around finance.  She also feels that the introduction of additional guides (Raizcorp mentors) in the second year will help her immensely.  She has already attended her first Marketing guiding session and really enjoyed it.


Lucia would love to see Mokgalaka Creations and Projects grow into a well-known, respected company that provides excellent value for money.  She is in the process of re-branding and feels that this will give her a fresh start as her new image will be aligned to her vision. She feels that this will, in turn, give her that extra bit of confidence.


She says that her biggest difficulty is still the lack of resources and she would love to see more corporates getting involved in helping to develop SMMEs to acquire the actual resources they need, as opposed to just throwing money around to look good.  She feels that there are so many SMMEs who need more than just financial assistance and something as simple as the sponsoring of brochures or business cards would really go a long way.


In closing, Lucia feels that her greatest accomplishment to date was being commissioned to create Madiba’s birthday cake in 2009.  We wish Lucia the best of luck and we believe that she will still have a great many such accomplishments.



Raizcorp Kramerville Update

White Sessions are a key component of the Raizcorp programme. At White Session, entrepreneurs present their businesses, using a prescribed template, to a panel of guides. During White Sessions, entrepreneurs present snapshots of their business performance to date, plans for the future and goals they intend chasing over the next 6 - 12 months. The process is invaluable in getting the entire guiding team on the same page as the entrepreneur, allowing them to best serve the entrepreneur and their company in growing a sustainable, profitable business into the future.

This year both Kramerville and Richards Bay inaugurated their first White Seasons with marathon white sessions taking place over a 3-week period. The prosperator managers and guides are to be complimented on the incredible way in which they pulled together to “co-create” profitable businesses and contributed towards even more Raizcorp magic!


In Kramerville, Eugene Beck was the guest speaker at Viewpoint. What an inspiring man! Those people who did not attend this Viewpoint really missed out on an opportunity to hear a great entrepreneur share his story and his wisdom. Well-known for winning the Sanlam Money Game in 2002, Eugene now runs a company that protects consumers who are involved in road accidents. 



Raizcorp Kramerville is also excited to welcome two new Raizcorpuscles. Michael Herbstein, who will be responsible for special projects and Michal Sysmanski, who will be looking after Partner companies in his role as Account Executive. 



Ten new companies join the Arize programme this quarter, and three companies have graduated to Category E - Mokgalaka Creations and Projects, Brushimages Photography and Safiga Properties. Congratulations to Lucia, Lwazi and Mathe respectively!

Raizcorp Meyerton Update


The Meyerton Prosperator welcomed three new entrepreneurs and held its first marketing event. Arranged by Prosperator Manager, Warren Deerans, in consultation with the Sedibeng LED managers, the event was attended by more than 60 entrepreneurs. 

Many of the attendees expressed interest in the Raizcorp programme and are currently in various stages of Raizcorp Intake Process (Purple Process). We wish them luck!

Raizcorp Richards Bay Update


In Richards Bay, the final three sessions of "Am I an Entrepreneur?" were facilitated by John Roussot, Prosperator Manager and local entrepreneur. The course delivered great results in shifting entrepreneurs' focus and actions from technician mode to entrepreneurial thinking and management of their businesses. 

Norman Nxumalo of BHP Billiton presented his Viewpoint on "A better life for all through SMME-development" and echoed the need for entrepreneurial thinking in our society to help create employment, reduce crime and poverty, and, in so doing, create a sustainable economic future for our country. His insights into government and corporate strategy around enterprise development, revealed many opportunities for the entrepreneurs to grow their businesses, and Norman encouraged them to commit to Raizcorp's Learning and Guiding programs, and together make a significant difference in their communities.
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