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IOL News
3 days ago
- Business
- IOL News
Navigating tough times: Huge Group's strategy for sustainable growth
South African investment holding company Huge Group is positioning itself for long-term growth, despite the challenging economic and political landscape, it said in its annual report released on Friday. With assets under management of R1.463 billion for 2024, the company is actively refining its investment strategy, focusing on ecosystems and technology enablement. Its investment portfolio companies comprise: - Huge TNS is a network enabler offering a comprehensive suite of data, voice, and network services, along with ICT hardware solutions for corporate businesses, small and medium enterprises (SMME) and small home offices. - Huge Connect recently embarked on a process of pivoting the business to incorporate a much broader, full-service IoT proposition for enterprise and SMME clients. - Huge Distribution is a customer-centered, channel-only telecoms and renewable energy solutions distributor serving the South African and African market. It is positioning itself as a leading importer and distributor of alternative energy products and solutions, including solar panels, inverters, and lithium batteries - Huge NXTGN. The latest addition to Huge Group's portfolio introduced a highly sophisticated enterprise network enablement capability into the portfolio and served as the inflection point for the evolution of its strategy in addressing the rapidly evolving needs of enterprise and SMME clients. AND provides agile cloud-native, turnkey enterprise enablement capabilities. James Herbst, the CEO, said, "As a South African investment company, we operate in a challenging environment. SA's small-cap sector has suffered from prolonged neglect. High interest rates, global and local political uncertainty, and a profoundly limited institutional appetite have all weighed on market sentiment. It is in this light that the outcomes HugeGroup has achieved are remarkable." He said like many of its peers, Huge Group's market price also trades at a substantial discount to its NAV (net asset value) – a reflection of the current investment environment, small cap sentiment, technical share imbalances (where the supply of small-cap shares exceeds the demand for them), rather than a reflection of the fundamental value of its investment portfolio. "The valuation gap which is currently extant, which is represented by the discount at which our shares trade to their net asset value, will begin to narrow as investors and analysts begin to understand our investment approach," he said. Veran Kathan, the chairman of Huge Group, said the South African operating environment had been much tougher for businesses this year. The Government of National Unity had faced challenges, global and local services inflation had been much stickier than expected (resulting in interest rates falling far slower than expected), and global geopolitical tensions had continued to rise. After Huge reviewed its investment philosophy, approach, models, and style "we realised how well Huge Group and its PICs (portfolio investement companies) are already positioned to innovate, and we realised that we have the ecosystem and technology to connect consumer brands to consumers in a cost-effective way, where convenience is a theme, where all the parties have a great experience, and where value is shared – and so Huge NXTGN was born. In pursuit of this innovation, we deployed considerable capital to Huge NXTGN," he said. On governance, in August 2024, Maria Heraty resigned as Huge Group's chief financial officer and Tamryn van Tonder, Huge Group's chief commercial officer, stepped in to fulfill her role Van Tonder said, as regards investment performance, given general market sentiment and volatility this year, Huge have opted for a more conservative approach tovaluing the investments within its investment portfolio, despite falling interest rates, which ordinarily have a positive impact on valuations. She said the investment performance was also negatively impacted by delays in the deployment of loan capital to its existing PICs. Looking forward, Huge remains resolute in its commitment to continue investing in "our ecosystems, while remaining equally focused on active cash management, the optimising of our investment portfolio's cost base, as well as initiatives focused on unlocking synergies and efficiencies across our investment portfolio," she said. BUSINESS REPORT
Zawya
21-05-2025
- Business
- Zawya
Building a winning brand: How small businesses can stand out in a crowded market?
In a country like South Africa, where approximately 2.6 million small, micro and medium enterprises (SMMEs) are competing for the attention of the same pool of cash-strapped customers, building a memorable brand is critical for success. Without it, you risk blending into the noise and being chosen based on price alone – a race to the bottom that no business can afford. The good news is that building a winning brand isn't necessarily about big budgets or expensive ad campaigns. It's about clarity, consistency and connection. Here's how small businesses can create a standout brand in a crowded and competitive market: 1. Start with what makes you different Every successful brand is built on a clear value proposition – a compelling answer to the question: Why should a customer choose you over someone else? Maybe you offer faster turnaround times, personalised service, or a unique product range. Perhaps you have a deep understanding of your local community, or a founder story that resonates with your audience. Whatever your differentiator is, you need to clearly define it and build your brand around it. Don't try to be everything to everyone. The most powerful brands are focused, specific, and unapologetically clear about who they serve and what they stand for. 2. Be consistent across all touchpoints Your brand isn't just a pretty logo or a catchy slogan, it's the sum of every interaction a customer has with your business. That includes your website, packaging, invoices, signage, social media presence and even how your staff answer the phone. Inconsistent branding sends mixed messages. If your Instagram is slick and polished, but your shopfront is dated and cluttered, customers will question your professionalism. If your messaging changes depending on who you're speaking to, you'll come across as unfocused or unsure of yourself. Create simple brand guidelines covering your tone of voice, colour palette, fonts and messaging. Then stick to them in everything you do. 3. Tell a story that people can connect with People remember stories, not product specs. One of the biggest advantages small businesses have over large corporates is the ability to connect on a personal level, so use that to your benefit. Talk about why you started your business, the challenges you've overcome, and the values that guide your decisions. Show real people behind the brand – whether it's you, your team, or your customers. Authentic storytelling builds emotional connection, and emotional connection builds loyalty. Social media platforms are ideal for this, but so are in-person conversations, newsletters, blogs and community events. The more relatable your brand feels, the more likely customers are to get onboard. 4. Build trust through consistency and credibility Trust is the foundation of any successful brand. If customers can't rely on you to deliver what you promise, your brand won't last. This means doing the basics right: honouring deadlines, communicating clearly, and being transparent about pricing. But it also means collecting and showcasing testimonials, asking for feedback, and addressing criticism professionally. If you're just starting out and don't have a long track record, you can still build credibility by offering guarantees, being visible in your community, or aligning with reputable partners or platforms. Trust takes time to earn, but it's one of the most valuable intangible assets your business can have. 5. Be visible where your customers are You don't need to be on every platform or channel, but you do need to be present where your customers are actually spending their time. For a local services business, that might mean a Google Business profile, local radio ads or community activity sponsorships. For a retail or e-commerce brand, it might mean Instagram, TikTok, or WhatsApp. For a B2B company, it could be LinkedIn and networking events. Pick two or three relevant platforms and show up consistently. Share content that educates, entertains or solves problems. Don't forget to engage with comments and reply to messages – visibility drives familiarity, and familiarity drives preference. In a crowded marketplace, your brand is what sets you apart. And in a tough economy, it's what helps customers remember you, choose you, and recommend you. So don't just focus on selling your products or services – focus on building a brand that people want to buy from.
The Herald
07-05-2025
- Business
- The Herald
Small businesses need more than funding to grow and reach their potential
Small businesses and entrepreneurship are widely viewed, both locally and globally, as a key engine of economic growth and job creation, with their advantages of agility, capacity for innovation and potential for scalability. However, the high failure rate of SMMEs is well-known, and SA ranks higher than the global average. Supporting small business development as a means for inclusive economic growth has long been a central objective in our democratic era economic policy. Yet, after three decades, government itself describes the SMME sector as characterised by low survival rates and growth 'stagnant at best', with ineffective support a key factor holding back its expansion potential (2023 National Integrated Small Enterprise Development framework). In its Q1 2024 SMME update, the Small Enterprise Development Agency reported a significant decline in the number of SMMEs; and, more concerningly, declines in employment and real turnover at 4% each. These lacklustre results are despite government spending an estimated R6bn annually on direct financial support to small enterprises in the form of loans and/or grants, according to calculations by the Centre for Development & Enterprise. Despite the existence of a focused department of small business development and integrated Small Enterprise Development and Finance Agency, government initiatives to support small businesses remain fragmented across multiple departments and entities, with little coordination. Add to this the many private sector initiatives in enterprise and supplier development by individual companies and by foundations, NGOs and so on. The current state then, after 30 years of interventions and initiatives, is that there is a lot of activity and a lot of money being spent, but little in the way of tangible or measurable results. Clearly, something must change. One cannot keep doing the same things and expect different results. Much of the focus in small business development is on funding — either by government or the private sector seeking to offer funding as a solution, or in small enterprises believing that finance is all they need to succeed. There is no shortage of funding, but our experience on the Entrepreneurship Desk at the Business Chamber has shown that money is not the 'silver bullet' for small business success. Government agencies are willing to fund the development of a business plan aimed at enabling a small business to apply to banks or other government agencies for funding. Yet, bankers tell us they regularly find business owners unable to present and engage with a business plan that looks solid on paper. The bank is interested, but the business owner is let down by a plan that was developed without incorporating their practical inputs and realistic commitments. Up to 90% of SMMEs are rejected by government agencies for funding, despite having a business plan that was funded by government. A further challenge is 'training fatigue' — SMMEs often find themselves in a cycle of workshops, seminars, short courses, with generic content and no clear end goal or follow-up to assist them in implementing what they have learnt, and monitoring the results to identify further needs. We recently celebrated the Chamber's Entrepreneurship Desk's third anniversary, having grown to about 350 active member businesses, with about 79% black owned and 54% female owned. A key learning in this time has been that small businesses are held back not so much by lack of funds, but by lacking clarity on how to make a good idea or a special skill work in practice as a business. What small businesses and entrepreneurs need most is to determine their market position and strategy, understand how to make their operations most efficient and cost-effective, manage their cash flow, how to target their marketing, drive sales, and access markets. This needs training, mentoring, networking, access to information on opportunities; things that money to buy equipment or a business loan can't provide. The E-Desk's starting point is a gap analysis to identify the needs of a specific business owner, and to address those through targeted training and practical support, so they can develop a business plan that is actionable and fundable. Often the end result is that funding is not actually the need — by improving strategy and operations, the business performs better and finds they can succeed without the need for loans or grants. We take a value chain approach — identify needs, implement training and capacity development, compile an actionable business plan, facilitate linkages to opportunities and markets. Funding comes last. Seeing and hearing the success stories of E-Desk members at our anniversary event proved the success and impact of this approach. Some spoke of having expanded premises, employed staff or moved from selling their product at markets to supplying major supermarket chains. Others spoke of taking up opportunities to export, having learnt about the necessary documentation and processes; or the benefits of having access to a financial expert, gaining insights into costing and pricing, and how to leverage suppliers. The overall message of growth from these small business owners was that they had gained in confidence and expanded their business visions and horizons. If we can continue expanding practical and tactical actions that actually help small businesses to grow meaningfully, one step or one business at a time, then there is hope. Lunga Mjodo is strategic initiatives ganager at the Nelson Mandela Bay Business Chamber. The Herald
Zawya
10-04-2025
- Business
- Zawya
South Africa: VAT hikes and fuel price cuts, a mixed bag for small businesses
Although the minister emphasised that the budget would continue to prioritise social grant recipients and public-sector workers, small businesses weren't left out. The Department of Small Business Development has set aside R2.1bn over the medium term to support around 120,000 competitive SMEs—especially those owned by women, youth, and people with disabilities in townships and rural areas. Additionally, the government allocated R313.7m to the establishment of SMME hubs to support business expansion, while the R1tn allocated to infrastructure will be a positive for SMEs due to its impact on the infrastructure supply chain and because all businesses will benefit from investment in roads, water management and railways. There was a significant 51% reduction in the cost of a 1.5GB data bundle, which is good news for small businesses and individuals. Let's hope that all these commitments remain intact when the budget finally makes it through the legislative process. Miguel da Silva, group executive: business banking at TymeBank, takes a closer look at what will affect SMEs most in April and beyond. Transformation Fund proposed President Ramaphosa, in his 2025 State of the Nation Address on 6 February, announced the much-discussed R100bn Transformation Fund. The aim: Over the next five years, black-owned small businesses will be able to access financial support through this fund, which is expected to be largely financed by the private sector. The reality: There are significant, valid concerns raised about this proposed fund. There is heavy critique that the fund is mainly focussed on the contributions from big business rather than the desired outcomes, which leads to worries about it being yet another fund ripe for looting. The Minister of Trade, Industry and Competition, Parks Tau, published the Draft Transformation Fund concept document on 19 March, with a deadline for public commentary of 7 May. While fuel prices are down, load-shedding returns and VAT increase looms The latest fuel price decrease is good news for SMEs that rely on vehicles for deliveries and logistics. Effective 2 April, the price of 95 unleaded petrol decreased by 72c/l and 93 unleaded petrol decreased by 58c/l, while diesel prices dropped by between 84c and 86c/l. Unfortunately, after months of no load-shedding, the dreaded power outages have returned. To add insult to injury, as of 1 April, Eskom direct customers are now paying an extra 12.7% – well above the inflation rate – while municipal customers will see prices go up by at least 11.32% from 1 July. The impact of these cost increases on SMEs will be substantial. Businesses may try and absorb them initially but will eventually need to either up their prices or find innovative ways to reduce them. It's clear that exploring energy alternatives is not just a matter of ensuring a stable supply – renewables in particular look more and more appealing from a cost-saving perspective as grid electricity continues to get more expensive. SMEs will take another knock when the 0.5% VAT hike tabled for 1 May 2025 comes into effect. The proposed 2025 increase, which at this stage can only be stopped by a legislative intervention, will take VAT up to 15.5%. Unless an SME is VAT-registered and works only with other businesses that are VAT-registered, it will have to pay more for its supplies. Consumers will have to shoulder the burden of the higher tax, although the government is planning on expanding the basket of zero-VAT-rated food items, among other measures. The SARB firm on the repo rate – for now At least it did not go up! But by holding the repo rate firm at 7.5% on 30 March, the South African Reserve Bank has ensured there will be no relief for those who use credit. This decision makes the prime lending rate 11%. The SARB cited rising inflation risks, global economic uncertainty, and the effect of fiscal policy changes as reasons for its cautious approach. What is certain is that continued high rates will keep the screws on households and SMEs alike. Spaza shops face onerous registration effort According to research by Trade Intelligence, there are approximately 150,000 spaza shop owners across the country, collectively valued at around R197bn in 2023. Recently government has sought to make shop owners register their businesses to ensure better safety, compliance and regulation. The registration is onero,us to say the least. Shop owners need to assemble a mass of supporting documents, and the process is laborious and expensive. Tens of thousands of spaza shops have already been found non-compliant, and hundreds have been closed. Consider the effects on a sector estimated by the 2021 South African Township Marketing Report to employ 2.6 million people and contribute 5.6% to GDP if these closures continue. April's SME environment is anything but a joke. While government departments profess their desire to help SMEs, we must still contend with regulations, red tape and a repo rate that keeps SMEs and citizens from gaining even the slightest financial relief. Add in the depressive effects of a looming VAT hike and turning our sluggish GDP growth around becomes a really tall order. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
