Through a recent study conducted on business success, it became clear that South Africans are highly enterprising and can find innovative ways of making a living. What has also become clear, however, is that only about 3% of entrepreneurs become employers, thus affording employment to somebody else.

Most entrepreneurs remain lifestyle entrepreneurs creating work and an income for themselves, but not interested or able to grow the business. These entrepreneurs have to be commended. They earn an honest living, they are not dependent on anybody else and they provide a valuable service or product to the market.

The problem comes in when the entrepreneur cannot work any longer. There is no value created. No separate legal entity which can carry on regardless of the involvement in the lead entrepreneur’s input and, therefore, no retirement plan or legacy left for the next generation. Through the research it has become clear that some entrepreneurs want to grow their businesses, but are either risk averse or they do not have the necessary skill.

It is therefore necessary to commend those entrepreneurs who do grow their businesses, eventually providing employment to hundreds of people while turning millions of rands and creating wealth for all stake holders. Through intensive literary research it became evident that most scholars measure business success according to nett profit and growth in turnover and employees. Another factor is client satisfaction. But how is this achieved? Through doing things right. The problem is to find out what the right thing to do is.

Mr. Rob Clarke, group managing director of Puregas(Pty) Ltd, contends that the success of the company was due to a narrow focus and choosing a product that is in demand. Puregas was started in 1971 and is an award winning company today, recognised as Southern Africa's leading supplier of purified and blended gaseous hydrocarbon propellant, foam blowing products and supplier of high quality speciality gases and gas equipment, providing employment to approximately forty employees.

To have grown the company by 11% during a recession is no mean feat. Being a good strategist and having financial training and leadership qualities that showed at a young age all contribute to the ability to navigate and grow a company in difficult times, but the main ingredients to business success are a cohesive team, retaining staff and suppliers, an absolute focus on service and safety and having good mentorship and support.

“Of course our focus on quality throughout the company is a major contributing factor,” says Clarke. “Our suppliers are chosen according to their quality standards and maintaining our ISO 9001 certification brings about a carefully worked out quality programme, forming a circle of excellence which is documented in a value policy. An employee of the month is chosen according to excellence in conduct”.

A further component of the business success achieved is the marketing activity, a good brand, regular contact with customers and knowing the market will contribute towards successful growth in a business.

“Ultimately, it is having a purpose, discipline and surrounding yourself with the correct skill that will bring about business success. That includes building a good team, each having a defined role, a good reward and recognition system and continuously doing employee development and skills training”, continues Clarke.

All these ingredients of business success will contribute towards growing a business, but only when the original idea was viable. The Gem report of 2006 shows that of the 97% of entrepreneurs that do not grow their businesses, only 17% make a good living. So why do 80% of business that are opened up fail completely and cease to exist? It seems as if entrepreneurs in South Africa fail to do the necessary research to ascertain whether the idea is actually an opportunity.

There are three filters through which a business idea should be put before capital and often life savings is invested into the idea. The first filter is to ascertain whether the idea is operationally possible. Can it be done? Secondly is there a market? In other words, is there a portion of the population that actually needs the product or service? Sometimes the need can be created, as was the case with the cell phone.

Twenty years ago nobody “needed” a cell phone. But to change human behaviour is capital intensive and requires a big marketing budget. Once the need is established it is important to find out the parameters of the need and develop the product and service exactly according to such a need. Offer a total solution to a need.

The third filter is to determine whether it is financially possible to deliver the service or product at a market related price while still making a profit. When starting out in a market where there are existing suppliers it is important to understand the financial requirements and to determine whether bigger competitors and the resultant economies of scale will not create a scenario where a smaller supplier will be too expensive. This is a sure failure, unless a very definite unique differentiator can be found, to compel customers to buy at a higher rate.

When considering all these factors, entrepreneurship is not for the faint hearted, but when everything falls into place and the business grows it is hugely rewarding, financially as well as through self-actualisation. The feeling of providing the market with a much needed product such as propellants and speciality gases (which layman do not even know they are using, but without it life will not be the same) is hugely satisfying.

When in the process an entrepreneur can also provide people with employment in a happy, friendly environment, an entrepreneur has to feel as if his or her life has counted on earth. Everybody wants to leave a legacy.

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