Enterprise development programmes can range in scope and shape but should be supported by a significant body of research and agreed to objectives by initiating stakeholders at the minimum, in describing the importance of the strategy formulation phase in brief.
For programmes that are located within township communities, there are several principles that can be considered so that maximum benefit can be achieved through the efficient use of resources to maximise enterprise development benefits.
Improve competitiveness of existing entrepreneurs
Only a small portion of any population is suited towards the demands and pressures of entrepreneurship. While selecting external programme participants to work with from afresh is a viable and oft used option, there is much value to be gained in working with existing business owners who understand the rigours of running an enterprise with profit and loss responsibilities, in their own context.
These entrepreneurs will likely already be accessing available markets to some degree, have existing operations that can be augmented and built upon, and will likely require less training and skill development given they are already responsible for running a business. They will also be able to provide insights on local markets not already expressed by the programme formulation team.
Ensure project sustainability and commercial viability
Home is where the heart is and when considering the best place to start an enterprise, home and adjacent markets are a natural target for where initial focus should be placed. In these home markets, whatever advantages formal competitors may have can be mitigated through improving competitiveness of locally-based enterprises.
This often occurs through relatively simple efficiency interventions, and if the entrepreneur’s strengths can be further enhanced, such as leaning on existing market relationships and other intangible competitive advantages, they can place themselves in a position to compete locally and be commercially viable. Only once this has been achieved and on a sustainable basis should further expansion beyond the home market be considered.
Targeting long-term market linkages
Successful enterprise development is concerned with a long-term horizon. It is important to prioritise sectors and regions where adjacent value chains can create long-term market linkage opportunities and where talent pools can be accessed.
These could include applicable and near-by large, formal value chains, government activity or other advantageous benefits provided by other market actors. Creating significant market linkage opportunities helps to augment and tap a credible skills base that exists in the surrounding community. While accessing this talent base and creating these opportunities is a long-term goal, they are critical for growth and wealth creation potential. The time invested now can be a catalyst for small enterprises to take the next step and beyond in the future.
Collaborate widely to maximise resources and scale
The enterprise development space is a highly active one where, beyond public sector actors, there is broad private sector participation. This participation by the private sector can play a critical role in scaling an enterprise’s impact and guaranteeing a sustainable platform for future growth.
To ensure stakeholder support, it is important to attain top leadership buy-in so the enterprise has the necessary internal stakeholder support – their champions within the private enterprise – and are committed to providing market access opportunity. When interacting with the public sector, the local level is critical because while there is some influence exerted by the national and provincial government, municipal participation is critical for on-the-ground implementation to occur.
Enterprise development programmes are opportunities to make a substantive contribution to economic upliftment in township communities. The principles outlined above offer several points to consider when considering enterprise development and building a programme to support it. These principles are by no means exhaustive, and it important to think deeply and strategically about the who, the what, the where, the why and how.
The answers to those questions will help guide an enterprise development approach that is both impactful, as broad and deep as possible, and long lasting.
To find how more how your organisation can tap into Letsema’s enterprise development expertise, contact our Economic Development team here.