Recognised by the World Economic Forum as a pioneer in the field of incubation and enterprise development, Raizcorp has a vision to minimise the high failure rate of small businesses. We spoke to Kershni Maharaj, head of selection and efficacy, on how the organisation is turning the tables on this statistic using the “prosperation” business model, a term coined by the organisation in 2005.
What is the name of your incubator and the meaning behind it?
Even before the concept that grew into Raizcorp was developed by our chief executive officer, he attended a networking session.
As he was signing the register at the event, he realised that the event was for entrepreneurs already in business – and he was unlikely to be let in if he only had a business idea.
When the staff at the registration desk pressed him for his company’s name, he took a chance and blurted out, “Raizcorp!” Why that name? Our CEO’s full name is Allon Raiz…
How would you describe your focus?
Raizcorp has a high-touch approach that focuses on developing individual entrepreneurs and providing measurable impacts in terms of business growth and job creation. To do this, Raizcorp has developed a uniquely effective model of business incubation, which we call prosperation.
Where are you based and from which areas do you recruit new incubatees?
With 130 staff members, Raizcorp operates seven prosperators in South Africa and one in Angola.
These prosperators are located in Johannesburg, Uitenhage, eMalahleni, Richards Bay, Durban, Rustenburg, and Cabinda, Angola. A number of other prosperators in various regions are in the pipeline for rollout soon.
Which businesses are best suited to join?
Raizcorp offers a number of programmes for entrepreneurs in a wide range of sectors, such as construction, mining, ICT, travel, healthcare, and others, as well offering more generic support programmes that cater to all.
How do they apply?
The easiest way to apply is to go to our website and complete our online application form, called an Expression of Interest (EoI). Once this is completed and approved, each entrepreneur undergoes a detailed and rigorously documented entrepreneurial assessment and selection process.
How long do businesses stay in your programmes?
From three months to three years, depending on which programme they join and whether the entrepreneurs meet the minimum standards to progress.
What are the two key elements of your support that sets you apart from other incubators?
At the heart of the Raizcorp offering lies Learning and Guiding. Raizcorp Learning provides the content required to increase beneficiaries’ self-awareness and their business knowledge. However, because knowledge in isolation won’t help entrepreneurs to grow, Raizcorp Guiding gives them the opportunity to reflect on their new knowledge, as well as relating it to their own individual circumstances.
How long have you been going?
How many businesses have been incubated with your support?
Since its inception, Raizcorp has worked with more than 1 500 companies in its high-touch, long-term prosperator programmes and over 10 000 in other entrepreneurial programmes.
How many incubatees are simultaneously in your programmes?
Raizcorp’s eight prosperators currently support in excess of 450 businesses in high-touch prosperator programmes, as well as serving as an annual outreach base to over 3 000 other entrepreneurs participating in other programmes.
What are your fees?
Raizcorp’s programmes are paid for in full by corporate sponsors as part of their commitment to the Broad-Based Black Economic Empowerment Codes of Good Practice. Entrepreneurs themselves pay a token commitment fee of between R50 and R500 per month.
What commitments do incubatees make before they enter your programme? And what commitment do you make to them?
Progress is a function of fulfilling the conditions of the programme as well as the growth of the beneficiary business. A beneficiary may fulfil all the conditions of Raizcorp Learning and Guiding, but, unless the business also shows evidence of growth, they will not progress.
What are the average sales of your incubatees over a year in your programme? After two years? After three years?
This is hard to say due to the wide range of businesses, but 86% of all compliant businesses in the incubation programmes grow in excess of 15% annually and 95% demonstrate growth.
Why are you involved in supporting new businesses?
In his book, The E-Myth Revisited, Michael Gerber quotes a terrifying statistic: 96% of all small businesses will fail within ten years of start-up!
The implication – that only four small businesses in 100 will survive beyond 10 years – is Raizcorp’s core reason for being. In other words, Raizcorp’s reason for being is to fundamentally change the survival rate of entrepreneurs in whose communities we work.
What is your biggest wish for improving support to entrepreneurs in South Africa?
Three things top off our wish list: a reduction in the red tape surrounding small business ownership; a much stronger focus on and promotion of entrepreneurship education at schools; and finally, a complete overhaul of the stifling and ineffective labour legislation that is curtailing the growth of small businesses.
- For a comprehensive list of incubators, go to www. SmallBusinessConnect.co.za/lists