Thursday 4 December 2014

Starting a business: Advice from the NYDA

A while back, there was a request for a business advice post. So I went hunting for people in the know, bumped into Linda who is a communications specialist & Unathi who is an Investment analyst at the NYDA. This is what they had to say in response to my questions, I hope it has covered most of the FAQ's in the house.

The NYDA offers different financial and non-financial services under "Economic Development division". (Please follow the links at the end of this article for more information on each division.)*

I asked Linda what the first thing they would advise young people wanting to go into business would be, her response was that one need to know what they want before even considering starting a business. It is not up to the NYDA to decide what business path would be suitable for an entrepreneur, but for said entrepreneur to approach them already with a business idea & plan at hand.

The most common mistakes that potential entrepreneur make is copying already existing ideas. It is always advised that one tries very hard to come up with new ideas, the NYDA encourages this. Linda used an example of people opening a spaza shop that is the same as an already existing one in the same street, selling the same products at the same price as the already existing to compete for the same customers. This can lead to failure of an enterprise as the new comer offers nothing new to a market that might already be saturated. She advised; instead; to rather come up with better, improved or even newer ways of conducting business instead of going with "what has always worked" approach. Another common mistake young entrepreneurs tend to make is not separating a business entity from the physical person running or even owning the enterprise. This is the main reason that most small businesses never grow beyond this point. As soon as a small business starts making money, you will find that the owner uses the money for personal use such as buying flashy cars instead of using it for business growth. This can also lead to business failure as funds then become misused and the business becomes unsustainable.

In a case where an entrepreneur does not qualify for funding, the NYDA does not turn the applicants away, but instead refers them to one the different programmes on offer to help them either come up with a better idea of their proposal or even mentor and assist with business sustainability researches.

On non-profit organisations, one blogger wanted to know if all 5 signatories should be involded in the day to day running of the business and the response was yes. These are founding members therefore have to be involved on a full-time basis.

*Business Consultancy Services (voucher) Proggramme: http://www.nyda.gov.za/Business-Consultancy-Services-Programme/Pages/default.aspx
*Business Opportunity Support Services: http://www.nyda.gov.za/Business-Opportunities/Pages/default.aspx



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