A British entrepreneur???s view of doing business in South Africa

About Jonathan Lea

Jonathan is a specialist corporate and commercial solicitor who has over 11 years of experience at both large international City firms and smaller practices. For the last two years he has worked on a self-employed basis with a network of other freelance lawyers focused on entrepreneur-led businesses. If you'd like a competitive quote for any legal work please send an email to the address on the home page. You can also follow him on Twitter @jonathanlea

The following in italics represents the frank views of a client of mine who after selling his interest in a company he founded relocated to South Africa a while ago to try his luck in starting businesses there.  We caught up in an email exchange the other day in which he detailed some of the frustrations he finds in operating in South Africa.  Many of his annoyances seem to echo a lot of what seems to be wrong with the UK and indeed many other countries!  In any case, I thought it would be interesting to air these thoughts and see if there is anyone out there who has any other supporting or alternative views of working in the country to add to this post.

“What we would consider seed capital seems to be considered VC money here and the market is very thin on the ground with people taking chances.

The way that business works here is totally different to what I am used to:

  • Firstly the racism – I could never get anything from government because I am both foreign and white.

  • Secondly the business rules – It’s much more about who you know and impress rather than how good your product is.

  • Thirdly the speed – Everything is soooooo sloooooow… mostly due to leaders/managers not being hired for their experience, education and ability.

I am adapting well to this slowly but surely, however, it does make for interesting times when we have to decide which race of our team has to go to which meeting based on the prejudice and working styles. Then how to write a presentation/specification document for a company/government as they will want to use it as their RFI/tender spec… because your business connections have already agreed you have won the contract in advance. However, nobody in the whole decision chain really knows what they want and you have to tell them that too.

Sometimes it surprises me that things ever get done here with this business ethic, however, it seems to be working and those that can adapt to the very strange methods can do very well indeed.

I also didn’t mention the blinkered and outdated corporate side of the country that also seems to be a small percentage of elites earning excessive amounts, even in comparison to their international counterparts. Chatting with quite a few of them, they have outdated business model acumen from 10-20 years ago and are scared shitless that international businesses are going to come over here and show them how it’s done.

Wallmart have been trying to properly get in here for 4 years now and behind the scenes even the businessmen are fighting them, as well as the government. They think it will be the start of their demise and they realise that they are living on borrowed time… although I think that Vodafone (Vodacom) recently appointing a Spanish CEO is the start of the slippery slope of acknowledged failure of the business systems here.

Change is coming, just that everyone is fighting it tooth and nail.  Mix it with the badly run, racist and corrupt government and you do have quite a barrier to entry. Although once you’re in then everything gets a lot easier.

It took me 9 months and 3 interviews to get my visa here and a hell of a lot of hassle. Whereas lots of the people I met and befriended in the 4 hours queues at Home Affairs had no education, money, experience or hope. It took them just 30 days and not one of them were asked why they want to come here.”

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