Bad Entrepreneur

With all the focus on the various technology platforms which have been rolled out in the last few weeks I’m keen to do a bit of market research on South African entrepreneurs and consumers.

If any of our blog readers have any thoughts on the questions below I’d be keen to hear what they have to say.

1. Did you switch accounts to First National Bank to take advantage of the PayPal product being launched here?

2.   Do you presently make use of any of the following technologies as a business owner or consumer? PayPal, M-Pesa, MiMoney, Instant Money, Mowaly or MoneyBookers?

3. Are you planning to make use of any of these technologies / gear your business up to accommodate for these technologies in the coming months?

4. In the South African context specifically, do you buy into the concept of a largely cashless society in the next five to ten years? (Assuming you and your main target market are a middle class, educated society with access to an internet enabled cellphone).

5. Are you planning to buy an iPad when it arrives in South Africa?

I can’t promise you any prizes for the best comments or something but will definately see what we can rustle up!

The sun has set on a pretty historic day in South Africa with PayPal officially breaking cover today. On top of that the  governor of the Reserve Bank had on one of her more stylish “tents” today and kindly granted us a 50bps rate cut which will have been some welcome relief for anybody with any debt hanging over them.

I thought I was going to let some of the dust settle before I posted my thoughts on the PayPal thing and now that all the usual suspects have put their thoughts out there I thought I’d share some of the feedback from my one on one interviews withthe execs from First National Bank (FNB) and some thoughts on the day in general.

1. For the naysayers who are complaining that this is not the PayPal that they really want, just take it in context. Over the last 10 days broadband prices have been cut, it’s cheaper to lend money and we now have a form of PayPal that was not there 24 hours ago…. progress is being made!

2. I think FNB have erred by bumping heads with Silicon Cape, but I’ll let that one play itself out. I’ve raised the issue  with Michael Jordaan (FNB CEO) and he has indicated that he really does want to engage the Silicon Cape people. So while there have been some issues this week, hopefully they will sort themselves out.

3. Something which I haven’t seen reported anywhere else – I asked Michael Jordaan what the South African Reserve Bank had  said when they brought them the idea of bringing PayPal to South Africa. Their answer to FNB – “What has taken you guys solong to come and ask?”.

We criticise government but there are parts that work really well and despite all our misgivings, they are trying to create an enabling environment for small business.

4. I pointed out to Jordaan that there are a lot more smiles around the bank, compared to the interviews we did in late 2009. His comment to me was that FNB had adopted the motto: “Don’t waste a good crisis” – this stuck with me as being really pertinent considering all the negativity floating around. While everyone else was being super negative FNB was pouring money into tech investments and they’ve emerged with some clear advantages over their competitors.

5. I asked both Jordaan and Iris Dempsey (head of FNB’s commercial banking unit) about the recent trading environment. Both commented that the last quarter had been one of the best in the last 18 months. While the media sells the idea that there is a lot of negativity around, the bank is apparently seeing a very noticeable improvement in business volumes which bodes well for the broader economy.

6. If you have never done or been to an event at the Turbine Hall in Newtown, then I sincerely suggest you check it out. Super venue! No more of this kak of fighting traffic to get into bloody Sandton anymore – Joburg as a city worked beautifully today and this is a great venue for events like the PayPal launch.

7. I don’t totally know what it says about society but I found it weird to watch people doing live tweeting while the presentation was going on. It’s a funny society where we need to keep people updated with every minute of our lives. Having said that Jordaan impressed me as somebody who was really enthusiastic about technology and spent a part of our interview explaining all the things he was able to do with his mobile phone (in terms of financial services products). When somebody of his stature and enthusiasm for innovation is spearheading one of our big banks then you get excited that the best quality products and services are going to be rolled out to you as clients.

On that note I am signing off for tonight with the words of Michael Jordaan – “Don’t waste a good crisis”.

Instead of seeing what isn’t there, rather envisage what could be there and then make it happen.

Whoop whoop – another historic day for the mighty mighty South Africa comes to a close!

I get to read quite a lot of negative commentary about SA banks – specifically the big four (Nedbank, Absa, Standard and FNB) – and the way that they deal with small and micro enterprises (SMMEs).

The main comment that is made is that big banks “don’t understand” small business but this seems like a really generic comment and doesn’t help them improve what they are doing.

If I sum up the comments and try and take some of the emotion out of it these seem to be the main criticisms which are levelled against these institutions:

• They don’t lend to small businesses
• If they do offer to lend, they require high levels of collateral and don’t take risks with entreprreneurs
• It’s too expensive for small businesses to borrow from banks
• Banks hound entrepreneurs when they don’t make their repayment commitments

I am not going to try and influence this debate yet but I am going to make some observations and then maybe let the blogosphere and contributors to this blog give their input about what they expect a bank to do to better support small businesses.

• FNB has brought a number of innovative technology solutions including Instant Accounting and potentially PayPal
• Standard Bank is putting a lot of effort into initiatives in the franchising sector and small business networking
• Nedbank is supposed to be bringing a technology driven solution along to compete with PayPal (not totally sure how that is going to work)
• Absa has been throwing money at a couple of grassroots initiatives but don’t really seem to have a “small business identity”
• Sasfin is supposed to be “the bank for entrepreneurs” but you never really see them doing much visible in the sector

So my question to you is:

1. In your opinion which SA bank is doing the most to supoprt small business?
2. What are they doing well?
3. Which products have the most benefit to you as a small business?
4. What could they do to better improve their offering to you as an SME owner?

We’ll rustle up a bottle of something nice for the blogger with the best comments so go wild.

Remember – this is not a bank bashing exercise, this is an attempt to come up with constructive criticism to support the sector. Let me know.

I hate to gush about a product – especially when its from a bank (cold shiver) – but FNB’s Instant Accounting package is simply awesome and will (in my humble and probably worthless) opinion be one of the most revolutionary products for the small business environment in 2010.

I’ve mumbled about it in a couple of previous articles but today I got to try it out firsthand. Suffice to say that I may not be a huge fan of FNB but I’m but I’m opening an account with them to get my grubby little paws on this tool.

If you are one of those SME owners who hates doing their admin and tends to collect all their paperwork in a shoebox somewhere then this program will change the way you work completely – and its not even complicated to use!

Plus it’s FREE which makes it frikkin awesome.

In a nutshell it is a rules based book-keeping package which runs off of your bank statement. According to the guys over at FNB 98% of the transactions that you will need to capture into your book-keeping package will be on your bank statement anyway so all the system needs to be told is where to allocate the income and expenses.

I’m just a lowly journalist but I couldn’t find any faults with it – the system does anything that I would need as an SME owner and a few more things than I expected it to be able to do.

And it’s not just aimed at small and micro businesses. The guys over at Cash Converters use it to track and do reporting on their other various stores and helps management pull up reports to compare different operating units.

Apart from the usual book-keeping up to trial balance functionality there is some nice reporting features on it including:

- Budgeting and budgeting variance
- Financial performance against previous financial year
- Cash-flow forecasts
- VAT reporting

The product is also very flexible. I had expected a “rules based” product to be very much an ‘out the box’ offering which could not adapt to different industries. The demonstration I saw included the services industry and a retail company. By FNB’s own admission it’s not ideal for manufacturing type businesses but for the rest you can configure this thing to your hearts content.

Nice product, I tip my hat to FNB and its developers – I’m sold on it.