eBusiness Weekly
Kudzai M. Mubaiwa
A few years ago I wrote some articles on business incubation when it was still an emerging phenomenon and one could count on their fingers the number of such innovation spaces in the capital, never mind the other cities and towns of Harare.
My emphasis then was on the fact that economic development is a product of the quality of enterprises we have and that local innovation spaces could be the best small business support service. I was naturally triggered when I heard business incubation mentioned in the recent State of the Nation Address by the President.
The indication was that government will be rolling out business incubation programs as a form of support for small to medium enterprises.
The challenges of small businesses are many and we have outlined many of them here in past columns. The summary of them is access — emerging enterprises require access to information, funding, workspace, markets, and advisory services/mentoring — what I deem a holistic enterprise development package, that can be availed through a local business incubation centre.
The importance of devolution cannot be overemphasised because for business incubation to kick off and be sustainable, the stakeholders must all be local people.
Every community has unique dynamics informed by the major economic activity, demography and geography. I remain convinced that government is best placed to act as an enabler rather than an enforcer for programmes of this nature, theirs must be to build the capacity of local executors through training, provide seed funding to get them started and thereafter showcase the best stories emerging from around Zimbabwe.
It critical at this point is to further unpack each of these “access” aspects and detail what can be done by way of solid actions in a typical local business incubation space.
Access to Information is the first important thing small business will require. The starting point is information on how to start and grow a proper business is needful, encompassing idea selection, idea generation, business operations, marketing issues, record keeping, production processes and soft skills.
Further, no business can grow until it is formal, information on registering an enterprise will be key, how to open a bank account, registering a new business for tax with ZIMRA and human resource issues with NSSA, branding a new business, setting up a social media presence as well as information on specific industry/sector associations.
Partnerships are inevitable here, because an ordinary government employee really cannot handle all of this alone, their role must be that of a co-ordinator who brings in the right people for the community from business skills, technical skills organizations as well as representatives from banks and other formal organisations that register small enterprises.
Finally, the business incubation programme must host internal competitions and field its’ people in national and international ones to give them necessary exposure.
Access to Funding is what most small business owners think is the panacea to all. Certainly the business incubation centre must be able to link up its’ clients — the local SME’s to different types of funding according to their stages and enterprises.
Care must be taken to separate the funding entities from the incubation space itself because the fund will be at risk of failure due to cannibalisation and emotion rather than objectivity in disbursements.
A thriving centre should be able to avail small grants for the pre-incubation stage that allow a new enterprise to get proof of concept, register perhaps as a Private Business Corporation, do some initial branding, open a bank account, all of which can be done on amounts not more than $250 per new business.
This support would work in the areas where needs are the most dire and options for starting up are limited such as rural centres, but in the urban spaces, owners can raise this by themselves.
More importantly a well-run business incubation centre should be able to source various funding options for the proven businesses, allowing them to scale through funds for better and bigger equipment, wholesale purchases of raw material and oiling through working capital and order finance. The incubator manager must thus have a reasonable level of comfort with numbers.
Access to Workspace is a topical issue for many SMEs and the business incubation program must solve this problem. In the rural setting, it simply takes putting up decent structures at growth points or other service centres, and also leveraging present infrastructure such as vocational training centres to act as co-working spaces for the best projects.
Urban areas such as Harare, Mutare, Bulawayo, Gweru already have some private run co-working spaces and it is heartening to note that some space that had been lying idle is gradually being made available as hot desks where those starting out can have a business address, a desk and chair to use, access to the internet and most importantly, sit amongst like-minded people who will stimulate creativity.
Government must seriously look into utilizing educational and information centres (such as universities, schools, colleges and post offices) as co-working spaces for entrepreneurs and innovators.
Access to Markets, both local and international, matters to business owners. Business is pointless when there are no off-takers for products or services. The business incubation centre must create a local directory of enterprises, ready to be shared with any potential markets. They must periodically and consistently host local events to showcase product and stimulate the local economy, actively search for linkages with larger corporations so that their people can feed into raw material and service requirements across the nation, reach out to international platforms, and help their people achieve scale, depth and reach.
It is expected that each business incubation space would be present on digital platforms and continually showcase the entrepreneurs it houses to the world.
Access to Advisory Services is the last but not least of business support services required from a business incubation program. Mentorship is useful, as the business owners will be in unchartered territory. Those that have gone ahead of them are important contributors and other non-local business people can also help.
Over time, alumni of the program are extremely useful as entrepreneurs-in-residence who can both speak at monthly meet-ups or run office hours alongside the incubator manager.
While this is a noble initiative, we urge caution in the approach, for not all are meant to be entrepreneurs.
Next week therefore, we will suggest a framework for selecting the participants of the business incubation programs and how the initiative can still benefit their wider community that do not make it into the core program.
We will then further look into the tools the incubator manager must use to run a successful and profitable program that has distinct indicators. This is the time for entrepreneurs and innovators to emerge, and they will need all the support they can get!
Feedback: Twitter @kumub, Email [email protected]
