Small businesses in the eye of the strike storm - CNBC Africa

Small businesses in the eye of the strike storm

Southern Africa

by admin 0

Small businesses particularly in mining communities suffered the most from the strike. PHOTO: Getty Images

“The strike had a huge effect on the whole city of Rustenburg, and in particular the small businesses.  What I’m very proud [of] is that when the [strikes] started, we didn’t know how long it would take before it ended, it could’ve been a week, it could’ve been two weeks,” Allon Raiz, CEO of Raizcorp, told CNBC Africa.

“As we started to see that this was going to linger, we sat down and put together a 10 point plan in order to try and prepare ourselves for a long bunker down.”

Raizcorp provides business support programmes to small businesses and entrepreneurs in South Africa through a unique model of business incubation.

Raiz added that the firm then diversified its product offering and clients to make sure that soon after the strikes has begun, that there would be a market for people who were looking to invest outside of the mining industry.

[video]

Since the end of the strike, companies such as [DATA AMS:Anglo American Platinum], [DATA LON:Lonmin] and [DATA KIO:Kumba Iron Ore] have recorded significant losses for the period.

(READ MORE: Strikes put Anglo American Platinum in the red)

“We looked at different geographies in terms of outside of Rustenburg in Gauteng. We looked at cost cutting opportunities. In fact, the portfolio grew. It was so counter intuitive, and I think just based on what we did, these companies now are going to thrive. What’s very important is we’ve taken all that learning and we’ve applied it across the country to all our prosperators,” Raiz explained.

Raiz added that Raizcorp was currently applying the same strategy to its firms within the engineering industry in lieu of the ongoing National Union of Metalworkers strike, which begun soon after the platinum strike had ceased. Raizcorp has over 500 businesses in its network that it provides support for.

(WATCH VIDEO: Impact of the Numsa strike on economy an small businesses)

“We do the job of rescuing businesses. There’s a market failure in terms of [the fact that] small businesses tend to fail early on, and we intervene not based on the business but based on the entrepreneurial flair of the entrepreneurs leading the businesses,” said Raiz.

“My view is that there is more good money chasing business than there are good businesses chasing money. The moment we sober up to the fact that we have a need as entrepreneurs to have a compelling economic right to exist, when we take on that responsibility, money will flow to us.”

Comments