This month we focus on the opportunities offered by 2014 and discuss how the new year may brings signs of a economic turnaround. In our success stories me meet Jimmy Hanekom, of Livewell Suites, and Reg Amos, of CTC Sports.
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January 2014   |   Volume 6.1

Clear signs of a dawn after five years of gloom

For an owner-manager hunkered down in survival mode on his shop floor after five harrowing years of economic gloom, the signs of a turnaround may not be all that apparent, but Nazeem Martin, CEO of the leading small-business finance house Business Partners, says the evidence is compelling.

The US economy is expected to grow at 2.5%, a sturdy rate for the biggest economy of the world; Europe's expected growth of 1% is a decent swing around from a similar size contraction a year before, China is still pumping at 7,5% growth and African economies at 5% per year.

These are not just figures on paper, says Martin. On his recent travels to global development finance conferences, the new life in the world economy was tangible. The number of active cranes on city skylines was striking, and “everywhere the talk is positive”. “I am certainly more optimistic now than I was a year ago,” he says.

Success story:
Local entrepreneur builds world's best retirement home

Jimmy Hanekom talks about the home for dementia sufferers that he started two years ago with a slightly raised voice. Not because he is passionate about it. He clearly is, but the reason he is speaking loudly is that he has to compete with a raucous drumming session under way across the beautifully kept garden on the stoep of the Livewell Suites in Somerset West.

Wild applause and whoops of joy follow a particularly fast rendition of Kumbaya, before the group of residents and their carers launch into My bonny lies over the ocean.

“Research shows three things really help dementia sufferers: music, children and animals,” explains Jimmy. The drum session leader is a regular visitor to Livewell, one of many service providers who keep the residents and day-care visitors occupied with exercise, arts, gardening, baking, croquet, bowling, movies, trips to the beach, woodwork, games, and needle work, among other things.

Success story:
Batting for local manufacturing

You wouldn't guess that the small CTC Sports factory in industrial Maitland, Cape Town, is one of the few places in the world – and only one of two in South Africa – where cricket balls are made.

The unassuming facade of the three-storey building also hides an amazing success story of manufacturing growth in an era of importation and decline. 57-year-old sportswear and equipment manufacturer Reg Amos started his business from his lounge seventeen years ago while the first flood of cheap Eastern imports were decimating the local clothing industry and later the sports equipment industry.

Today, he employs 39 people in his factory and outsources regular work for a dozen other small workshops around Cape Town. Niche manufacturing, says Reg, is the key ingredient of his success. “I have done well in the clothing industry because I don't target making a T-shirt. I make a T-shirt that is niche, where someone wants a T-shirt with one blue sleeve and one red sleeve. You cannot buy that in a shop.”

Time to start looking at income growth again

2014 looks like the year in which business owners will be shaking themselves out of the mindset of survival through cost cutting to one of expansion through income growth, says Anton Roelofse, regional general manager of Business Partners.

His own gut feeling as an experienced SME financier is backed by surveys which suggest improving confidence among business owners. The latest results from the Business Partners Limited SME Index shows a five percentage point increase in the average confidence levels from 49% to 54% late last year. This is echoed in other surveys that show steady earnings in established small and medium businesses.

Roelofse urges businesses to join the changing tide. “You cannot build a business in the long term by cost cutting alone. It is time to start looking at income growth again.”
Poll results Do you feel your business will grow in 2014?
  • I'm optimistic
  • I'm cautious
  • Nothing will change
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