Innovation needed to fast track SA women entrepreneurs

This article was originally published in the Business Report.

Women play a substantial role in growing the economy and the lagging participation of women in South Africa’s economy is manifesting in less innovation, fewer exports and fewer jobs being created.

Many Enterprise and Supplier Development (ESD) programmes in South Africa favour the development of women and youth and in 2016 we need fast track approaches for women entrepreneurs given the unconscious bias that exists against them.

This bias manifests in the stats. Under 40% of South Africa’s businesses are women-owned. The multi-country GEM survey has shown conclusively that firms owned by women tend to be smaller in both turnover and number of employees than those owned by men. And men in South Africa are up to 1.6 times more likely than women to be involved in early stage entrepreneurial ventures.

Some of the solutions are obvious: more education, more networking and more support and representation on various programmes.

Government has made some effort to include women in the various charters such as a 33% target for black women in the financial sector charter, expanding opportunities for the historically disadvantaged including women in the mining sector charter and the ICT Sector Charter states that black women should form between 40 – 50% of the beneficiaries of all elements of the scorecard.

There are also a couple of women economic empowerment programmes such at the South African Women Entrepreneurs Network, The Isivande Women’s Fund and the B’avumile Skills Development Initiative. Government has these few initiatives but are they visible and impactful enough?

To fast-track women’s development efforts, a more critical look and edgier approaches are needed to give women a distinct advantage. Some practical and innovative solutions have been effectively implemented overseas and would be worth exploring in South Africa.

In India for example, income tax rules provide a higher tax exemption limit for women, which leaves more money in their hands. There are also banks which have special incentives for women entrepreneurs such as a five percent reduction in the interest rate, no processing fee, easy payment options and no penalty for repayment. Hello FNB, Standard Bank, Absa and Nedbank – is there anything specific you can do for women in South Africa? It would be a serious differentiator for you.

In Bangladesh, India’s neighbour, the Bangladesh Women’s Chamber of Commerce and Industry (BWCCI) made 30 recommendations to improve the policy environment for women entrepreneurs. The central bank issued an instruction to commercial banks to increase lending to women-owned businesses, including collateral-free loans, at a reduced interest rate. Imagine the results of an initiative like this if the South African Reserve Bank were to do something similar? It would help to create thousands of new jobs. In Bangladesh, loans for women entrepreneurs increased from 19 percent in 2007 to over 50 percent today.

Additionally, more than 65 percent of Bangladeshi banks have dedicated desks for women borrowers, with specifically trained staff who cater to the needs of women entrepreneurs.

The US has ‘setaside’ programmes for women and minority owned small businesses. An equivalent programme would require tweaking of our broad based economic empowerment initiatives. In the US, work contracts are set aside for diversity suppliers with the goals of boosting diversity and business ownership. Essentially these programmes put women-owned businesses in a stronger position to bid for work for major corporates and government. Women-owned businesses apply to have their businesses certified if at least 51 percent of the business is owned by at least one woman.

While researching my recently released book, Play to win: What women can learn from men in business, I spoke to many women about their experiences in corporate South Africa. In my role as CEO of Seed Academy, which offers fast-track, practical training and mentoring to startups and early phase entrepreneurs, I engage with many female entrepreneurs. It is clear that strong role models are especially powerful. I would therefore encourage successful women to mentor and support other women where they can. Successful women entrepreneurs are both an example of what is possible and a source of funding for other women.

Uplifiting women in the workforce and in their own businesses could have far-reaching impact. In South Africa, women are generally supporting entire families and research has shown that they are more likely to make a social contribution than men. It is a monumental tragedy to keep women on the outskirts of the economy.

Fake it till you are it

This weekend I was reminded of Allon Raiz’s brilliant summary of his term ‘Competency Crisis’ – something many entrepreneurs are familiar with: the doubt you sometimes face when you’re on the verge of growth – and his corresponding prescription to ‘act as if’. If you’ve read my book, Play to Win: What women can learn from men in business, you may recognise this from Lesson #9: Fake it till you are it.

If you are an entrepreneur, I highly recommend Allon’s book. It’s full of wise advice and lessons from case studies, and short enough to finish quickly.

But Allon’s advice isn’t only relevant to entrepreneurs. Most of us have been in situations where we question ourselves and our ability to succeed. Whether this is in response to a significant challenge, promotion or a stretch assignment, we can experience a lapse in confidence.

Here is an excerpt from Allon’s book What to do when you want to give up: Help for entrepreneurs in tough times:

At the risk of sounding sexist, I have always believed that women’s ability to apply make-up gives them a strange advantage over men, in that they are able to use the make-up to portray their features in the best possible way.

They can quite literally put their ‘game face’ on. Make-up enhances what already exists. Start-up entrepreneurs need to apply ‘make-up’ to their businesses. This is the basis of ‘act as if’. History is filled with entrepreneurs who have pretended to be what they not yet are. The entrepreneur’s quality of being able to visualise future scenarios – and to begin acting in a way that is commensurate with these future scenarios – is one of the secrets of success. It is epitomised by entrepreneurs who speak of ‘we’ when actually they have a one-man business (and ‘I’ would have been more accurate).

Kathy Delaney-Smith was the coach of the Harvard women’s basketball team. This description, from a blog by Adam Brotman, so aptly describes the power of the ‘act as if’ philosophy that I have taken the liberty of quoting it here in full:

This is an amazing story of a woman who didn’t have experience coaching basketball, but acted as if she could, and went on to lead her team to one of the biggest upsets in NCAA basketball tournament history. She then went on to harness her own ‘act as if’ philosophy while taking cancer head on. I’ll never think about anything else other than this coach and her amazing story when thinking about the power of acting as if. In a New York Times article from 2009, Melissa Johnson writes about Delaney-Smith’s philosophy:

‘Any decent athlete, salesman or Starbucks barista can put on a good game face.
But her philosophy, “act as if”, goes much deeper than mere swagger or theatrics. It’s a method – a learned skill for convincing your mind that you already are what you want to become. The body follows where the mind leads.‘ [Emphasis mine – DR]

There are those who disagree with this view. They see ‘acting as if’ as deception or, even worse, lying. I am not advocating either of these. The unfortunate reality is that it is a gamble to start a business and it is a gamble for others to support a start-up business. At some point,m a leap of faith is required.

You need to present your business as having reached a level of success that you know it has the potential to reach. There is no doubt in my mind that when you act as if you are successful, you are more likely to be treated as a successful person. It is a virtuous cycle that breeds success. A word of caution: it all falls apart if you don’t have the substance to back it up. Do not say things that you do not mean and do not promise what you cannot deliver.

Lesson #9: Fake it till you are it from my book Play to Win: What women can learn from men in business covers just this crisis in confidence, and at the end of the chapter I give 4 strategies for beating the ‘fake’ feeling. In summary, they are:

  1. Reframe your fear.
  2. Set reasonable expectations.
  3. Make failure your classroom.
  4. Remember that ‘faking it’ is a skill.

The first step to being successful is convincing yourself that you are successful.

You can get your own copy of my book right here.

Image ‘bride with a mirror’ by mahmoud99725 from flickr

Why Marketing Metrics Matter

Whether you are an entrepreneur or marketing manager, if you’re spending any money or time on marketing or advertising, you’ll want to measure if you are getting a real return on your investment.

Marketing metrics help the marketer:

  • Tweak marketing campaigns
  • Decide where to put more focus on (in terms of time and/or money)
  • Decide what’s not working and what to drop

As a marketer, what are some of the metrics you should be focusing on?

1. Conversion

It’s all good and well getting leads into your sales funnel through advertising, content marketing, pay per click and email campaigns, amongst others. But where the rubber meets the road is in the simple question, “How many leads did we convert for our business?”

Conversion metrics are an excellent way to see if the time and money spent on your chosen marketing activities are paying off. The conversion metric will give you and idea of what to what to tweak, what to keep and what to drop.

2. Customer Acquisition Cost

A critical question to ask is “how much does it cost to acquire a customer?” There’s no point in acquiring a customer when the cost is more than the lifetime value of that customer. You want to keep your customers on the books so that they keep coming back and spending money with you.

3. Retention

Many companies spend so much time, effort and money to acquire new customers that they forget about the gold that is already sitting in their database – existing customers. Marketers should be asking themselves how long the customer stays with the company and how much he spends. There’s no point in spending huge amounts of money to acquire new clients when your existing clients are flooding out the back door because of poor customer relationship management strategies. A lot of focus should be given to retaining the customer (especially for entrepreneurs) because it is cheaper and more profitable to service an existing customer than acquiring a new one.

4. Lifetime Value

This is one of the most underrated marketing metrics but one of the most important. Working out the lifetime value of a customer is important for one reason. You’ll want to serve him better and throw more resources at him.

As entrepreneurs it makes sense to go to where the money is. So, if one customer spends R10 000 with your company, and another spends R100 000 with your company. Guess where the attention goes? Naturally, to the one that spends R100 000. Take your top 20 customers and figure out how long, they on average stay with your company, and how much they spend. For example, if your top customer spends R1-million with you per year and stays with your company for on average 10 years, this is a different dynamic, isn’t it. Because, suddenly a R10-million customer is a lot more appealing than a R1-million customer. So, don’t look at a customer’s once-off spend, but look at the lifetime value and psychologically it just wants you to serve him better.

What other marketing metrics do you think would apply to your business as an entrepreneur? We’d love to hear your ideas. Pop us a comment in the comment section below.

© Donna Rachelson. All Rights Reserved.