2010 showed me just why there is a massive unemployment problem in South Africa. Large businesses have hired all they can and the government payroll has swelled to bursting point. The only outlet for employment growth is small business…and…
Small businesses just cant get off the ground and are not hiring anyone!
Here are my top four reasons why:
Red Tape:
I was at melting point a few weeks ago because the SARS rejected my application for an importers license. Why? They were missing “proof of my phone number”. Apparently I had omitted to include a proper copy of my cell phone bill – the one I had submitted had my name on it and not the businesses.
All in all , for this application I submitted:
- CK docs
- Proof of residence
- Certified ID document
- Proof of telephone number
- Proof of tax clearance
- Bank statements
- Customs application form
- Tax certificate
- Company profile
Each of these documents took me at least 1-2 hours each on average to obtain. I spent at least two days over two months gathering them , filling them , trying to find out where to submit the whole heap once I was done and then actually had to go to SARS and wait 1 hour for the person who processes applications to return from lunch.
This is but one application I have sitting on my desk.
This kind of bureaucracy I find hits me at every level of applying for something – be it a bank account , cell phone , Tax payment or whatever. Its impossible , its stupid and its downright silly. What kills me is that SARS have access to all of my details anyway. Why should I have to resubmit all the details yet again? Why can’t processes like this be easy and document free?
Why should I battle tooth and nail to do simple things like this? Over the last year , we have spent at least 3 months employee time on this type of garbage. If i had done some work during this time instead of ridiculous administration , I could have earned enough to hire someone for a full year with the proceeds…
Note to government : Cut out red tape. Cut it ruthlessly. The pace of business will increase 100 fold if you do.
Crime
Last month , a batch of stock I had purchased was stolen when it arrived in Johannesburg from Hong Kong. It got all the way around the world just fine , then got jacked as soon as it got off the plane in SA.
Awesome.
UPS , who was handling the package , did not give a toss. They blamed everyone else they could , including the sender , UPS overseas and customs. They dragged the issue out for over a month. When it was obvious it was their fault they just said “sorry” – we don’t compensate users for “lost” packages. Luckily for us , we had insurance further up the line and were able to claim. But here’s the kicker :
- For one month , for the online store that package was destined for , we didn’t sell a single thing. Not one thing.
It could have crippled a business who had nothing else to keep it alive – and those responsible were totally indifferent.
Note to government: Start getting vicious towards crime. Bheki Cele – You may be a big spender but you have the right attitude.
Education
In August , we took applications for a position we had open. The position didn’t pay much money , but along with the usual mob of helpless cases we were excited to get some applications who seemed like they had some decent training and experience.
However , when we interviewed them we had a shock coming to us. 80% of the applicants we interviewed claimed they could do things which they obviously couldn’t. We are talking here about “office administrators” with experience and diplomas who couldn’t use excel , who couldn’t string an English sentence together when the job required answering the telephone , and who battled to format text in word.
After reading through countless CV’s and interviewing many people , I have come to the conclusion that matric certificates , diplomas and certain degrees are not worth the paper they are written on. They provide absolutely no indication of ability – and what was worse was that neither did experience or previous work apparently. The CV can be rigged , it seems , so that the brilliant or no different from the disastrous on paper . Warping of the truth and plain lies seemed to be the order of the day.
As a business , I’m going to employ people in future based on references and rigorous tests , and nothing else. It seems to be the only way to go.
Note to government: Pay BIG money and take industry experts out of their jobs and into the classroom. It will be worth it.
Funding
It has to be said – South African institutions (cough banks cough) are the most incredibly anally retentive in the world. They want RETURNS , GUARANTEES , BACKUP and SECURITY. Come to them with something even lightly risky , and they’ll slap you in file 13 every time. The problem is , there are very very few places for a small business to get funding where such things are not required. And when you do find one , the red tape makes going to SARS look like a Sunday picnic.
I have talked to several business owners who have been struggling for some time to obtain funding and have simply given up.
It could be that there just isn’t enough money to go around , or that legal burdens placed upon funders is too heavy to warrant supporting the little guys.
However , the problem remains : No one is getting funding and no one is growing and jobs aren’t being created.
Note to government: HAND OUT money to those with great ideas , drive and ambition. Don’t make them wait or demand huge amounts of paperwork. Sure , a few guys will run off and buy a new BMW with their new found loans. Overall though , massive economic growth will result.