South African business mogul and global speaker, Vusi Thembekwayo is on a mission to incubate and launch 300 black-owned businesses by 2030.
South Africa's Vusi Thembekwayo in drive to incubate more black-owned businesses
Through his My Growth Fund, an enterprise development initiative, Thembekwayo has invested 5 million rand to try and fill a gap in entrepreneurship where he says black people are disadvantaged.
The end of apartheid in 1994 came with promises of better housing, health and education for millions of blacks shut out during decades of repressive white minority rule, but two decades later, poverty persists.
South Africa’s unemployment rate is 26.7 percent. Among black South Africans, the majority population, unemployment is made worse by racial inequalities and stands at 32 percent.
In most parts of the continent, Africans become entrepreneurs just as a means of survival, rather than because they have identified specific opportunities to exploit.
Thembekwayo wants to help develop high-growth potential businesses that can add more value to the entrepreneurship space.
“We have designed a program, every single year we have an intake of businesses and we know the intake of businesses, type of businesses, size, scale, opportunity and we also know the businesses that make it and those that don’t. So, we now know, if a business averages 4 million rands or more, it will last over our program and the reason that it will last over our program is because it has enough depth, it has enough complexity and it has enough analytics for us to help the entrepreneur make intelligent decisions,” said Thembekwayo.
Former bankers, Papa and Hetty Boachie-Yiadom joined the My Growth Fund entrepreneurship programme to help find an opportunity to expand their fashion business.
Coming from a corporate sector, the couple admits it was tough to adjust their strategy for success especially as the country faced an economic crisis. They needed to differentiate themselves from an already crowded fashion retail space.
Two years in, their P&H boutique has become well-known for quality Africa-inspired clothing and has grown from three to five stores across the country.
“African print clothing has always been in the market place. But typically, what we find is that it normally exists within the informal sector and so our biggest point of difference is that we’ve actually formalized the business aspect of the African print fashion industry. We have put them in award-winning malls, in convenience areas so that people don’t have to venture outside of their normal shopping radius,” said Hetty.
“Since we partnered up with My Growth Fund’ we have opened up in Polokwane, we have a shop there as well as here in Cresta which is our newest mall. So that’s also just helped for us to understand you know, where our market is, you know how to grow, as well as you know – just staying in our lane and not looking to grow too fast. So, we can service our clientele in a manner which they deserve,” said Papa.
My Growth Fund promises to grow start-ups 10-fold in five years through strategic planning, education, funding and incubation. The idea is to turn a medium-sized businesses into companies with a high turnover.
The business amplifier program costs 12,000 rand – more than 800 US dollars a month.
For start-ups, the programme offers a free entrepreneurship funding masterclass.
Thembekwayo says black entrepreneurs face a greater challenge to access funding, exposure, freedom of time and room to fail.
“Black entrepreneurs are not… black people are not without ideas, we are not without the ability to see it. We see it. What we don’t have is, once you see it, where do you go? So market access is a huge problem and to understand market access you have to understand the South African economy, the South African economy by its nature, locks out small players,” said Thembekwayo.
Thembekwayo emphasises on funding by training black business people how to secure investment and by acting as a venture capitalist.
“So, what do we get out of it? A good kick – a great kick of watching entrepreneurs build businesses. If you look at our initial batch of top 40, we now have some entrepreneurs where we have taken equity stakes in their businesses. So strategically, the reason we want to help these entrepreneurs build businesses is because if they build businesses and we take an equity position, then we grow in wealth,” said Thembekwayo.
Experts say entrepreneurs are central to bridging Africa’s widening inequality gap but most governments on the continent are not doing enough to help them.