False Bay TVET college - Centre for Entrepreneurship

Yesterday I visited one of the three Centres for Entrepreneurship that have opened their doors since the DTI conceived of them a couple of years ago, before the formation of the Department of Small Business Development. This is one of the better ideas the DTI has had, among the raft of programmes devised in the past twenty years aimed at stimulating entrepreneurship in South Africa.

My visit confirmed for me there is no substitute to seeing something face to face, and speaking to the people involved, if you want to get a true picture of what is going on. In Parliamentary speak, I was conducting an "oversight visit."

Minister Lindiwe Zulu opened the centre in March and invited the Portfolio Committee but I could not attend. I met the Manager of the Centre, Steve Reid, at the Forging Enterprise conference in Cape Town a few weeks ago and he agreed to host me on a visit when I had the time. Yesterday was my first opportunity and it was a real eye-opener.

Before he joined the Centre Steve managed the Raizcorp business incubator in Uitenhage focusing mainly on the motor sector. He is well acquainted with the world of entrepreneurial development and relished the challenge of setting up the Centre from scratch.

The DTI put out a call for proposals in 2013, inviting the 50 or so Further Education and Training (FET) Colleges (which are now called Technical Educational Vocational Training, TVET, Colleges) to submit business plans. False Bay College is the third to open its doors, after Springs and Ermelo. The aim was to have 30 of these centres running eventually, and the DSBD wants 10 by the end of this year.

False Bay College is a multi-campus college dating back to the mid-1950s and was fully accredited in 1981, offering the following 8 core courses: Business Studies, Engineering (which includes trades such as plumbing and motor mechanics), Hospitality and Tourism, IT, Education, Yacht and boat building, Security and safety, and 2-D animation. 

Around 12 000 students pass through its doors per year and it prides itself on its high graduation and job-placement rates. The Westlake Campus, where the Centre is housed, has around 1 000 students.

The college entered into a 5-year contract with the DSBD, receiving funding of R3 million per year to operate the Centre. Steve showed me a proof copy of the SA Business Incubator Handbook which the Department is hoping will become the guideline for the Centre and others of its kind. He will begin offering services in volume from 2016 and aims to have 120 businesses up and running by the time the contract is up.

The Centre has three main target audiences - students, the college more broadly, and surrounding communities.

For the first time, students will be exposed to the possibility of starting their own business in addition to the traditional options of pursuing further studies or entering the labour market. Steve hopes the Centre will stimulate interest in the entrepreneurial option among its mostly technical students by inculcating a culture of entrepreneurship throughout the college.

His first foray into the local community is through a joint venture, put together by the DSBD and the Wholesale and Retail SETA, to train informal business owners in the townships. Last week they trained 30 meat and braai (shisa nyama) traders in Khayelitsha on day one of a 10-day basic business course.

I asked him what was the expected outcome of this training, and whether it could be rolled out on a large enough scale to have a meaningful impact. He was honest enough to say he did not know the answer. But this goes to the core of the policy dilemma of the DSBD - how to juggle limited resources between competing demands, from the survivalist township and rural businesses such as these to those with potential to grow and create jobs at scale.

The DSBD must urgently devise metrics to answer these questions, and have answers for people who ask whether there is a primarily social or economic impact to be measured here, or are they intertwined? What is the growth path for an informal township business? How can a meat and braai trader grow beyond a one or two man business and compete with the franchised fast food chains? This is where the training should be taking these business owners.

Before I left Steve introduced me to four students who briefly told me their stories and business ideas.

Lavinia and Brian want to start a construction and maintenance business in the townships, for residents who do face brick extensions to their shacks or want to build from scratch, but currently use casual labour and don't get any City approvals or professional certifications.

Both of them have completed the Solar Photo-Voltaic Technician's course, with the aim of selling, installing and servicing Solar PV systems in the residential and light industrial sectors. Lavinia is about to complete her articles so will be very well qualified to take on her two business ideas. Her father started out selling shoes and clothes from the side of the road and she caught the entrepreneurial bug at an early age, asking her parents to send her to the Gardens Commercial High School so she could get the business basics drummed into her. Before doing articles she got a BA Accounting from Unisa, and comes across as a very capable and determined young lady.

Tenzwil Solomons wants to run a plumbing business. His father is a plumber but has no qualifications, and Denzil dropped out of college a few years ago before realising he was on a road to nowhere so signed up at False Bay College. He already does odd plumbing jobs and is determined to make a success of it. He said from the age of 17 he knew he wanted to run his own business.

Then the very soft-spoken Matthew surprised me with his two off-the-wall ideas: starting an "organoceutical" business using marijuana as the main ingredient for a health-product range; and a business making semi-conductors for the electronics industry. He is studying mechatronics and believes this will give him an advantage in getting these businesses off the ground. I wonder!

All of them said having Steve around enabled them to take those first difficult steps towards commercialising an idea. Steve's strategy is to focus on the supply chain, market access opportunity in the Cape Town business community, opening doors for these budding entrepreneurs that would probably be closed to them otherwise. The emphasis on enterprise-supplier development in the new BBBEE codes of good practice gives stimulus to this strategy.

But firms are notoriously wedded to existing suppliers and breaking into supply chains is exceedingly difficult for outsiders, especially start-ups. This will be one of the biggest challenges for the Centres and time will tell if the strategy works. I will visit some of the others over the coming months to see if they are adopting a similar strategy.

The Centres' main contribution to our entrepreneurial ecosystem is, I believe, their potential to stimulate the start-up and early stage business pipeline by sourcing entrepreneurs with sound technical skills and bolting on vital business skills through high-touch support and mentorship.