It’s tough out there for entrepreneurs. While small, micro and medium enterprises (SMMEs) make up around a staggering 98.5% of South Africa’s economy, research by the Small Business Institute (SBI) recently confirmed that about 70% of the country’s emerging small businesses fail within two years of starting up. Tsogo Sun is aiming to change that, through the Tsogo Sun Entrepreneurs programme.
‘It’s an entrepreneur development programme, run across the group, to help emerging enterprises to become sustainable,’ says Candy Tothill, Tsogo Sun’s GM of Corporate Affairs. ‘In working over the many years with small businesses, and understanding the challenges they face in the South African environment, we decided that the best thing for us to do was to take a proactive approach. Instead of just giving our business to very large corporates, we wanted to rather work with individuals and help them professionalise their offerings
so that they can eventually become preferred suppliers to Tsogo Sun.’
Those individuals include people such as Hezron Louw, who launched a Gauteng-based gourmet street-food company (complete with a food truck, or ‘bus-taurant’) called Sumting Fresh with partner Andrew Leeuw in 2012. ‘It started when Andrew and I met in a taxi years ago and discovered we shared a passion for food,’ Louw says. ‘We also realised that if we could just get started, we had the drive to make it. We borrowed from friends and family and put in all our savings to get the equipment we needed.’
Louw joined the Tsogo Sun Entrepreneurs programme in 2016 after attending a Supplier Showcase at Gold Reef City. ‘The lessons have been helpful within the business and personally,’ he says. ‘In the past, we were so often reactionary, but we’ve now implemented a strategy and we’re proactively operating with an overall vision in mind. The tools are taking us to the next level of growth, and we are on a good track to sustainable growth.’
The programme is run completely in-house, with an annual intake of 40 businesses. ‘We put them through a one-year development course, which gives them a really good start in taking their business to a competitive level in the marketplace,’ says Tothill. The programme started in 2005, and in 2009 the annual Tsogo Sun Entrepreneur of the Year award competition was introduced for its entrepreneurs and alumni. Sumting Fresh was the winner in 2017, coming out ahead of fellow finalists that year – Devina Dawkinun’s Gemkids daycare centre, Nicole Msibi’s Before Time Indlondlo Events, Noli Mini’s Relax Spas health-spa company, and Fhumulani Nemukula’s Ronem Maintenance Solutions engineering company. ‘It’s a diverse bunch of businesses and people, from very different backgrounds,’ says Tothill – and that’s exactly what Tsogo Sun is looking for.
Other recent winners include Nqobile Nkosi of NQ Jewellers (2016); Visit Vakasha Guest Lodge owner Nomsa Mazibuko (2015); and Carol Sanderson, Guest House of the Year 2014 winner, who runs an accommodation and event conference centre called Casambo Exclusive Guest Lodge. Initially, the programme focused on small businesses operating in the tourism space, but as it grew, it extended to all industries.
The reason for that was simple, says Tothill. ‘We realised that what the Tsogo Sun Entrepreneurs programme was teaching was fundamental business practices, so from a content point of view, there wasn’t all that much that needed to be adjusted. We just took the focus off tourism, and everything else was there already!’
Entrepreneur of the year
Once they have completed the one-year development programme, entrepreneurs can sign up to become alumni. ‘Being an alumnus is not a passive role,’ Tothill says. ‘You remain connected to the programme and have access to various mentorship opportunities. You’re also invited to our annual conference, where you’re encouraged to become a peer mentor to the new people. This gives you an opportunity
to practise the leadership skills you’ve been taught.’
As an alumnus, you’re also eligible for the Entrepreneur of the Year award, which is not limited to the current year’s intake. ‘We ran the first Entrepreneur of the Year awards in 2009, and we’ve had a winner each year with the exception of last year,’ Tothill says. ‘Last year we introduced the Achiever of the Year award, which is only open to people who are currently in the one-year development programme.’ Here, too, there’s a wide diversity of business types: the inaugural Achiever of the Year was Lowe Furniture & Décor owner Velaphi Mpolweni, who designs and manufactures wooden and steel furniture.
While the Tsogo Sun Entrepreneurs programme works with small businesses, Tothill emphasises that it’s not an incubator for start-ups. ‘We’re not in the business of creating businesses,’
she says. ‘We work with businesses that are just about to hit another level. So it’s not your informal microbusiness; it’s a business that’s registered and operating. We then work with the owner of the business to help them crystallise their plans. We give them a financial mentor, a business mentor, a leadership coach, and a social media marketing guide. So they get a whole team of people working with them for an entire year to implement the strategy that we help them put in place in order to take their business to where they say they want to take it.’
The entrepreneurs on the programme also go through a 10-week UCT business management course run by GetSmarter. ‘It covers every aspect of running a business, from identifying new business opportunities to the legal environment, business planning to human resources, and management to growth. We also insist that the entrepreneurs either employ or contract out an accountant to formalise
their financial records, but we have learnt that having an accountant is not very helpful if you can’t understand your financial statements! That’s why they also go through a very useful course called Colour Accounting, which is finance for non-financial managers. We sign them up for membership with Proudly South African as well, which provides them
with various additional benefits and ensures we encourage local procurement.’
Facing the panel
The programme provides an incredible support structure for its entrepreneurs … but, as Tothill explains, you’ll have to work hard to get your foot in the door. Participation is open to all South African businesses with an annual turnover of less than R50 million, and businesses can join through a handful of channels. Some (like Sumting Fresh) come through Tsogo Sun’s provincial Supplier Showcases; others come through membership of the HCI Supplier Club; and others through recommendations from the Department of Tourism and tourism agencies.
‘Applications are open until August, when our panel goes through them all – we can get as many as 1 000 a year
– and we ultimately shortlist about 150 people who we would like to interview,’ she says. ‘We filter that shortlist through various criteria to get it down to 100 or so, and we then arrange interviews with those business owners from October until January. The businesses are situated in all parts of South Africa, so it’s quite a process!’
The interviews can be quite intimidating. ‘We deliberately set them up to put the entrepreneur in the spotlight,’ Tothill says. ‘They are interviewed by a panel of six professionals with proven track records in business, and are evaluated using a scorecard designed to ensure the results are objective and fair – and that we invite the most suitable entrepreneurs with the best fit to join the programme.’
The class of 2019 has 35 businesses participating in the programme, some of which have more than one representative, bringing the total for the year to 41 delegates. Overall, Tothill says, 259 businesses have been through the programme and 183 are currently active participants.
Across the Tsogo Sun Entrepreneurs programme, there’s an unspoken awareness of that scary statistic we mentioned at the start of this article: 70% of South African small businesses fail within the first two years. From a Tsogo Sun point of view, Tothill says that the group keeps a very close eye on the businesses within the programme. ‘Over the years we’ve got a lot better at measuring the impact we’re trying to make. We collect all the necessary statistics from the businesses at the outset, and teach them how to create their own set of management accounts. From there we’re able to track their financial performance on a quarterly basis. We stay very close to their business, and are able to really understand what they need to do to survive and to thrive,’ she says.
Crucially, the programme puts its emphasis on the business owner, and not simply on the business. ‘We focus on the human being,’ says Tothill. ‘That’s why we call it an entrepreneur programme, rather than an enterprise programme. We insist on working with the person who owns – and, preferably, who started – the business. We develop that person’s leadership capabilities and their self-confidence, and we try to help them see themselves as successful, well-rounded role models in society.’
The Entrepreneur of the Year and Achiever of the Year awards are central to that. When the programme participants enter the awards, their entries are evaluated similarly to how programme applicants are: with comprehensive entry criteria, shortlisted finalists and – of course – interviews with a panel of judges. ‘We work with our finalists over a period of about three months to teach them further leadership skills, and how to capture the essence of their business journey so that they can share it in a consistent and powerful way,’ says Tothill. The idea is that those successful entrepreneurs can become ambassadors for the programme, and can also encourage other small businesses not to give up when the going gets tough.
Hezron Louw said it best before picking up the 2017 Tsogo Sun Entrepreneur of the Year award. ‘The feedback, support and guidance from other entrepreneurs made me feel empowered,’ he said, acknowledging the encouragement he’d received from the Tsogo Sun Entrepreneurs community. ‘The coaching, too, has been valuable. When times have become tough, I’ve gone back to the coaching and used the tools for a better outcome.’
‘For many small businesses, their real need is access to market,’ says Tothill. ‘Through our Entrepreneurs programme we have relooked at the way we were conducting our procurement, and we’ve deliberately opened up access to small businesses to become suppliers to Tsogo. The more South Africa responds to this opportunity for people to create their own employment, and to then create employment for others, the more other corporates are going to take what we’re doing as standard practice for good business, and better the prospects for our country.’