Entrepreneurs mostly always begin with just an idea. It’s normally a concept of something that largely has not been done before. Entrepreneurs spend an ample amount of time refining the conception of their businesses. This is all good and well however it is important that when they come up for air, they are able link the intellectual, conceptual aspects to what will happen after they penetrate the market and have been operating for say, 2 years.
It is for this reason that Steven Covey, author of The seven habits of highly effective people, says begin with the end in mind. Long term sustainability includes considering how you will deal with an economic recession, understanding trends in your industry so you can proactively respond to them thus keeping you ahead.
A day ago I had the privilege of meeting with a senior strategic planner at an enterprise funding agency. He relayed to me the need to understand the sector in which one is involved. An example he made was that of the general dealer, a key player especially in the Township economy. The industry was regulated till about the late eighties, meaning that you previously were required to have a trading license to be general dealer and these stores were our version of Pick ‘n Pay in that time. Deregulation brought about lower barriers to entry which is what birthed the Spaza Shop. A smaller convenient store, these sprung up on every street and suddenly one could bypass the general dealer and opt for the Spaza Shop.
Another thing that Spaza’s got right at that time was service, they opened very early in the morning so if you were going to catch a tax at 5am and had no change (small denominations of the note you have) they helped change that for you. And what was a universal problem in all households was that it took Monday morning for them to realise they had no bread for breakfast and kid’s lunch.
The Spaza was always open; in fact in our home in Pimville, it was the bread truck that woke me up at 5 am each morning. The Spaza also closed much later than the stores. This saved a lot of us that always remembered in the late evening that we needed certain things before we got home.
The Spaza is the only place that sold 1 single egg instead of a box of 6 or a dozen. It remains the only place that sells one cube of beef stock where we buy it in a box of 12 in the store.
I think I have made my point of how useful it was during its time. Now fast forward to post 1994 South Africa where Spaza Shops in the Townships are under threat. The entrance of competition in the form of Somali-run Spaza Shops. These guys run an efficient supply chain providing real savings for their customers added to that they have a real sense of the old maxim the customer is king.
Further to this competition, is the development of Townships with malls and shopping centres being erected. The Spaza Shop’s clients want to become part of the progress that is Pick ‘n Pay and Woolworth’s, organic food, loyalty points, use of speed point at pay points and of course feeling they are a part of the modern world.
The long-term view of things requires that you are aware of the changes and trends. Imagine what the vigilant Spaza owner would have done seeing the changes? Perhaps begin with being part of the Somali buying syndicates to also tap into the lower prices which can be passed onto his customers.
Or even more than this, they could have looked at changing the form of the Spaza Shop, perhaps no longer being a mini general dealer. But looking at specific items such as cold drinks, personal care items and yes, selling one egg instead of a box, which I believe could be cheaper than the convenience stores.
In the 21st century we are finding that competition is coming from areas that weren’t your traditional competitors to begin with. Innovation and technology are enabling this not forgetting legislation.
If you are an entrepreneur reading this, consider this as a challenge to innovate and come up with a new you, show up differently to your clients and be surprised at the positive response.
The trick is to continue to solve a problem through your services; if you’re not solving a problem then you’re creating waste.
A parting thought is that night clubs particularly in the upmarket areas understand that in order to stay in business they need to rebrand and even change venues. What can you do?