So I was sitting having (obviously) a coffee with the phenomenal (and beautiful) Dineo Tsamela (if you are even remotely interested in matters concerning money, managing debt, etc – a visit to her blog is worth gold – http://deeonmoneyza.wordpress.com/) and we were discussing how to promote entrepreneurship in South Africa and Africa and agreed that access to capital is one problem… but we also realised that in actual fact that might not be such a problem. There are literally hundred of thousand venture capitalists out there – and that is just in South Africa. You don’t believe us? If you are currently employed and earning a reasonably good salary all you have to do is look in the mirror.
“But I don’t have millions to invest in start-ups” you may say…. Indeed. But have you considered perhaps starting small? This is our suggestion how you can become a venture capitalist (wouldn’t it look cool on your linkedin profile? 🙂 without having large amounts of available resources.
When she is not writing on this blog or working on her day job, you can find her on Twitter: @DeeOnMoneyZA
How to become a Venture Capitalist
Are you currently employed and earning a comfortable salary? Do you have a bit of disposable income at the end of the month that you’d like to use to make more money but you aren’t sure how?
Well you could become a venture capitalist. To be a venture capitalist doesn’t mean you should have truckloads of money in the bank; it simply means that maybe you can afford R 1,000 to R2,000 a month to invest in a person to subsidise their business start up and introduce them to a network of friends who could use the service you provide.
Entrepreneurship is the new black in the business world. Everyone wants to own their business and fire their boss. We look at the Herman Mashaba’s and Given Mkhari’s and think “I want to build an empire” and these are the associations we’ve built with entrepreneurship. In reality entrepreneurship is first and foremost about making money – and there are many ways to skin this particular cat. People tend to get caught up trying to figure out how to raise funds for their big idea and are discouraged when it doesn’t come together. You could start a business to supplement your income. Indentify a problem, find a way to fix it and make money out of it.
The informal sector accounts for a large percentage of employment in South Africa. In 2013 informal sector jobs were at 2,4 million – small compared to the formal sector (about 19% of the employment sector).
The informal trading/retail market, in particular, is largely undocumented and unaccounted for but this doesn’t mean opportunities do not exist. There are several ways you can tap into the informal sector with minimal risk. You could help someone improve their earning potential and, in effect, their life. Often we face small problems but in our quest to become entrepreneurs we want to create big solutions. There are people today making money out of those tiny inconvenient things we have to do but we’d really rather not, like a personalised grocery shopping service (one would think online shopping has solved this).
Many opportunities are hidden away with the people we interact with on a daily basis.. With the expansion of apartment residences close to commercial spaces starting or funding a cleaning service would be simple. Assist the cleaning lady in the office make extra money by popping into the flats nearby and spending an hour (or 2) doing a quick clean up. You could gather the clients, then sit down and decide how you’re going to split profits.
There’s also a great market for electronic accessories. We live in an age where few things are quite as tragic as having your phone die on you. Being cut off from the emails and the rest of the world sends most of us into mini panic attack mode. We’d probably sell a small portion of our soul for 30% more battery life. This is a business opportunity. Portable cell chargers (we all run out of battery regularly), car chargers and headphones (small talk must be avoided at all costs) could save someone’s soul, and reconnect them to their beloved phone people.
Perhaps you know someone in your canteen who happens to be a brilliant cook. They’re getting paid peanuts for their efforts. With a small injection of capital they would be able to start an in-house cooking service where they charge a fee to prepare a meal in the comfort of your home. The market is vast. There are parents and busy career climbers who can’t afford an in-house chef, but could certainly use a service that is affordable freeing them to put in more work hours work or allows them to spend time with their loved ones. Besides, who doesn’t love a good home cooked meal? Word of mouth works particularly well with this model – simply telling friends and colleagues about your amazing cook could set you up. The internet is an amazing place to expand, should you wish to. Major operating costs would probably be transport (ingredients would be provided by the client).
Security guards can double up as body guards providing services for parents that have adventurous teens who like to party but they want an extra eye kept on them. A school pickup and drop-off service that’s safe and reliable. A mobile car wash, a pop up market (various goods to choose from) and many such simple business ideas could become a healthy supplement to your income.
Most of these opportunities require basic skills and a great (but different and cheap) marketing strategy could set you apart. Discuss payment terms beforehand so that expectations are clear and there are no blurred lines. You don’t even have to worry about revenue forecasts or complicated financial statements either. Micro-enterprise funding is on a global rise and, apart from putting a little extra money in your pocket, is being used as a vehicle to address economic inequalities.